Suite Success - 10/1/ Interior Design

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1 Page 1 of 8 Editorial Content Wed 27 Dec 2006 Welcome, Guest. Register/Log in for extra features. Home > Library > Article bookmark this printer friendly this page reprints suggestions Suite Success Hotel work leads a surge in business at 75 top firms BY JUDITH DAVIDSEN, LAURA GIRMSCHEID, AND CANDICE LEE INTERIOR DESIGN OCTOBER 1, 2006 Hospitality designers won't leave well enough alone. In 2005, after years of complacently reporting 50 hospitality firms worthy of the name Interior Design Giant, we were forced by a surge in work and fees to increase the ranks of leaders from 50 to 65. Now, all of a sudden, there are 75 of them it's been more than a decade since anything like this has happened. As we pointed out last year, clients are becoming more aware that profitable hospitality is no longer a simple matter of glamour. More important are service, convenience, efficiency, technology, and an appreciation of guests' needs (and fantasies) all the things to which interior designers have dedicated themselves since the profession began. This year's 75 hospitality Giants earned a total of $379,984,481, which is not merely 38.3 percent more than last year's earnings. (You would, after all, expect an increase in the number of firms to result in an increase in reported earnings.) The statistic of consequence here is the average 20 percent more that those 75 firms earned over the average for last year's 65. These Giants are experiencing a serious upswing. Eight, in fact, reported hospitality fee increases that range from 108 to 199 percent. All the expansion has created volatility among the hospitality Giants, with 23 firms newly inducted into the ranks and nine zooming straight into the top 50. Only eight of the newcomers can be found among the top 100 or 200 Giants, but we noted our suspicions last July that some of the second 100 Giants were preparing to muscle in on the hospitality Giants. Sure enough, five of the second 100 did with three moving straight into the top 50 for hospitality. Hotels were the greatest moneymakers, accounting for 49.2 percent of design fees, and luxury hotels were responsible for almost three quarters of that. Resorts came in second, with 12.1 percent of income, restaurants third at a round 10 percent, down from last year's 14. For 21 hospitality Giants, or almost a third, hospitality is their only work. For another 11, the sector accounts for 95 percent or more of income, with office, retail, and residential taking up most of the slack. Half the hospitality Giants expect increasing opportunities to arise from an intensifying crossover between hospitality and health care. The hospitality Giants installed work valued at a total of $13,413,768,251 for an average of $222,357,360, up 64 percent from last year's average. Area installed totaled 128,960,302 square feet or an average of 2,049,979 square feet, up 10.8 percent. These figures seem to indicate quite a bit more spending per square foot than during the

2 Page 2 of 8 previous study period. The average hospitality fee earned per design employee was $126,118, up 16.7 percent. Sustainability is becoming integral to the design philosophy of 85 percent of the hospitality Giants, but only 69 percent report that clients are signing on. A wag of the finger to some of those companies but a tip of the hat to our Giants. Hospitality Giants 2006 Rank Firms Headquarters, Web Site Hospitality Fees (millions) Work Installed Design Staff Value (millions) Sq. Ft. (millions) 01 Hirsch Bedner Associates Los Angeles hbadesign.com , Wilson & Associates Dallas wilsonassoc.com , NR Gensler San Francisco gensler.com HOK Saint Louis hok.com , Brennan Beer Gorman Monk New York bbg-bbgm.com HFS Group/Concepts 4 Las Vegas thehfsgroup.com NR NR DiLeonardo International Warwick, Rhode Island dileonardo.com NR NR Leo A Daly Omaha leodaly.com Daroff Design + DDI Architects Philadelphia daroffdesign.com Skidmore, Owings & Merrill New York som.com Rockwell Group New York rockwellgroup.com Wimberly Allison Tong & Goo Honolulu watg.com NR NR NR NR NR Bilkey Llinas Design Palm Beach Gardens, Florida bilkeyllinas.com NR NR Jerde Partnership Los Angeles jerde.com NR NR NR 15 Chambers Baltimore chambersusa.com Gettys Group Chicago gettys.com NR VOA Associates Chicago voa.com Callison Seattle callison.com FRCH Design Worldwide Cincinnati frch.com ARAMARK Innovative Dining Solutions Philadelphia aramark.com Forrest Perkins Washington, D.C. forrestperkins.com NR NR Duncan & Miller Design Dallas duncanmillerdesign.com RTKL Associates Baltimore rtkl.com Looney & Associates Dallas looneyassociates.com Resort Interiors Myrtle Beach, South Carolina resortinteriors.net NR 16

3 Page 3 of Babey Moulton Jue & Booth San Francisco bamo.com Alexandra Champalimaud & Associates New York alexchamp.com Arquitectura De Interiores Guadalajara, Mexico ai-interiores.com.mx Gwathmey Siegel & Associates Architects New York gwathmey-siegel.com NR NR NR NR NR NR Avery Brooks & Associates Las Vegas abalv.com NR NR Baskervill Richmond, Virginia baskervill.com Thalden-Boyd-Emery Architects Henderson, Nevada thaldenboyd.com Elias Design Group New York eliasdesigngroup.com Design Forum Dayton, Ohio designforum.com Westar Architectural Group Las Vegas wagnarchitects.com Heitz Parsons Sadek West Palm Beach, Florida heitz-parsons-sadek.com Culpepper, McAuliffe and Meaders Atlanta cmmi-redlines.com Cheryl Rowley Design Los Angeles cherylrowley.com Stonehill & Taylor Architects New York stonehilltaylor.com NR NR NR NR Haverson Architecture and Design Greenwich, Connecticut haversonarchitecture.com 41 Ai Group Atlanta aigroupdesign.com NR J. Banks Design Group Hilton Head, South Carolina jbanksdesign.com NR J/Brice Design International Boston jbricedesign.com EDG San Rafael, California edgdesign.com Graham Downes Architecture San Diego grahamdownes.com Adache Group Architects Fort Lauderdale, Florida adache.com Puccini Group San Francisco puccinigroup.com Designplan Indianapolis designplaninc.com Perkins Eastman New York perkinseastman.com Carrier Johnson San Diego carrierjohnson.com RDH & Associates West Addison, Texas rdhassociates.net NR Cleo Design Las Vegas cleo-design.com Zeff Design New York zeffdesign.com Rowland Design Indianapolis rowlanddesign.com NR NR 28

4 Page 4 of Design Directions Marietta, Georgia designdirectionsinc.com Morris Nathanson Design Pawtucket, Rhode Island morrisnathansondesign.com SFA Design Santa Barbara, California sfadesign.com Ricca Newmark Design Centennial, Colorado riccanewmark.com Dawson Design Associates Seattle dawsondesignassociates.com NR NR NR McKee & Carman Design Group Dallas mckee-carman.com NR 7 61 Shea Minneapolis shealink.com Ferrari Interiors Fort Lauderdale, Florida garciaarchitect.com Judd Brown Designs Pawtucket, Rhode Island jbd.com TAG Studio Lewisburg, West Virginia tagstudio.com Cole Martinez Curtis and Associates Marina del Rey, California cmcadesign.com Morrison Seifert Murphy Dallas msmgroup.com NR NR Indesign Studio City, California Joi-Design Hamburg, Germany joidesign.com Smallwood, Reynolds, Stewart, Stewart Atlanta srssa.com Carl Ross Design El Segundo, California carlrossdesign.com NR NR NR NR R.D. Jones & Associates Baltimore rdjones.com NR OZ Architecture Denver ozarch.com NR NR Mojo Stumer Associates Greenvale, New York mojostumer.com Montgomery Roth Architecture & Interior Design Houston montgomeryroth.com Group One Partners Boston grouponeinc.com NR NR 17 Top 4 Most Admired Hospitality Firms in 2006 (poll of the 2006 Hospitality Giants) 1. Hirsch Bedner Associates 2. Wilson & Associates 3. Yabu Pushelberg 4. Rockwell Group Top 15 firms in hospitality outside the U.S.. Firm % abroad 2006 rank

5 Page 5 of 8 Bilkey Llinas Design Heitz Parsons Sadek HOK 90 4 Hirsch Bedner Associates 85 1 Jerde Partnership Wilson & Associates 65 2 DiLeonardo International 65 7 Skidmore, Owings & Merrill Wimberly Allison Tong & Goo Duncan & Miller Design Babey Moulton Jue & Booth Smallwood, Reynolds, Stewart, Stewart Brennan Beer Gorman Monk 35 5 FRCH Design Worldwide Callison Fee scales Job Title Salary (median) Hourly rate Principal/partner 135, Project manager 83, Designer 60, CAD Operator 45, Other billable 40, Hospitality fees and percentage of work by category Actual (7/05-6/06) Forecast (7/06-6/07) Total hotel projects 49.2% $186,952,365 Total hotel projects 51.0% $223,570,643 Hotel (luxury) 35.4% $134,514,506 Hotel (luxury) 38.4% $168,335,543 Hotel (boutique) 6.2% $23,559,038 Hotel (boutique) 6.4% $28,055,924 Hotel (mid/economy) 7.6% $28,878,821 Hotel (mid/economy) 6.2% $27,179,176 Condo hotel/timeshare 9.7% $36,858,495 Condo hotel/timeshare 9.9% $43,399,007 Resort 12.1% $45,978,122 Resort 13.0% $56,988,595 Spa 3.7% $14,059,426 Spa 3.6% $15,781,457 Country club 3.9% $14,819,395 Country club 3.1% $13,589,588 Gaming 8.2% $31,158,727 Gaming 8.1% $35,508,279 Restaurant 10.0% $37,998,448 Restaurant 8.6% $37,700,148 Bar/lounge/nightclub 2.5% $9,499,612 Bar/lounge/nightclub 2.1% $9,205,850 Cruise ship 0.3% $1,139,953 Cruise ship 0.3% $1,315,121 Other 0.4% $1,519,938 Other 0.3% $1,315,121 Total 100% $379,984,481 Total 100% $438,373,810 Percentage of fees by project type Actual (7/05-6/06) Forecast (7/06-6/07) Hospitality 44.5% $379,984,481 Hospitality 48.7%

6 Page 6 of 8 $438,373,810 Office 21.5% $183,588,008 Office 22% $198,033,343 Retail 15.4% $131,500,247 Retail 13.4% $120,620,309 Government 2.8% $23,909,136 Government 2.6% $23,403,941 Health care/assisted living 3.6% $30,740,318 Health care/assisted living 3.2% $28,804,850 Educational 2.9% $24,763,034 Educational 2.2% $19,803,334 Residential 4.2% $35,863,704 Residential 4.1% $36,906,214 Transportation 2.1% $17,931,852 Transportation 1.7% $15,302,577 Museum/cultural 1.3% $11,100,670 Museum/cultural 0.6% $5,400,909 Technology 1.2% $10,246,773 Technology 1.1% $9,901,667 Other 0.5% $4,269,489 Other 0.4% $3,600,606 Total 100% $853,897,710 Total 100% $900,151,561 New to the hospitality listing in 2006 Firm Fees Rank HOK 14,251,670 4 Jerde Partnership 5,950, Callison 5,200, Avery Brooks & Associates 3,402, Westar Architectural Group 3,200, Heitz Parsons Sadek 3,117, Ai Group 2,950, J. Banks Design Group 2,738, J/Brice Design International 2,700, RDH & Associates 2,036, Cleo Design 2,008, Zeff Design 2,000, Morris Nathanson Design 1,767, Ricca Newmark Design 1,631, McKee & Carman Design Group 1,500, Ferrari Interiors 1,500, Tag Studio 1,400, Morrison Seifert Murphy 1,324, Smallwood, Reynolds, Stewart, Stewart 1,268,194 69

7 Page 7 of 8 R.D. Jones & Associates 1,236, Oz Architecture 1,208, Montgomery Roth Architecture & Interior Design 1,200, Group One Partners 1,170, Methodology The annual business survey of the Interior Design hospitality Giants ranks the largest design firms by hospitalitydesign fees for the 12-month period from July 2005 to June Hospitality design fees include those attributed to: 1. All hospitality interiors work. 2. All aspects of a firm's hospitality design practice, from strategic planning/programming to design/project management. 3. Fees paid to a firm for work performed by employees and independent contractors who are "full-time-staff equivalent." Hospitality design fees do not include revenues paid to a firm and remitted to subcontractors that are not considered full-time-staff equivalent. For example, certain firms attract work that is subcontracted to a local firm. The originating firm may collect all the fees and retain a management or generation fee, paying the remainder to the performing firm. The amounts paid to the latter are not included in fees of the collecting firm when determining its ranking. The data were compiled and analyzed by the Interior Design market research staff in New York: Laura Girmscheid, research manager, and Candice Lee, consultant. Judith Davidsen is a frequent contributor to Interior Design. 2006, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved. Interior Design Firm Colorado's Award-Winning Luxury Interior Design Firm Ads By Google Trio Display Offering Retail Store Design Svc. For Over 15 Years. Contact Us Today Residential Consulting Warm, inviting, classic interiors Comprehensive Dallas-based firm

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