Introducing Interior Design’s 2024 Rising Giants

While many overarching industry trends recounted in the previous essay apply to both the top and Rising firms, including full pandemic recovery and generally healthy vital signs, there are some nuances between the two populaces worth highlighting.

First, Rising Giants took a bigger hit during COVID, so have farther to recover. Second, their design fees are less than a tenth the amount of the top 100 firms’ ($576 million compared to $5.9 billion), so small changes in their numbers can result in more significant swings percentagewise. Not to mention that one huge project or a single market performing extremely well or poorly on any given year can make the data look more volatile than it truly is.

All that a prelude to say: The Rising Giants had a good 2023. Fees have grown 11 percent since 2019 (and 8 percent yearover year), while FF&C value rose 15 percent in that same time period. The number of projects firms worked on increased 9 percent from 2022 to 2023 and more than doubled since 2019. (Top 100 Giants’s projects increased only 13 percent in that interval.) Not to mention that 24,956 is a heck of a lot of projects for the Rising firms!

Note: “blank cells” = did not report data

Remember we mentioned the roster of employees shrank 16 percent for the top 100 firms? That’s the exact same percentage that Rising Giants staff grew, which is concrete evidence of how much further they had to build back up after pandemic downsizing. It makes sense we’re seeing positive recovery in greater percentages for Risers than for the top 100 because of the deeper hit they took. To get more specific, the number of principals/partners is up 109 percent since 2019; project managers are up 61 percent; and designers are up 36 percent. (Remember, these figures include new hires and promotions.)

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Interested in learning more about Interior Design’s 2024 Giants of Design? Check out our reports for Top 100 Giants, Sustainability Giants, and more.

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Overall, salaries rose 11 percent but billable rates only grew 2. Translation: Rising Giants are doing more projects and paying their staffers more but not increasing their billable fees to compensate—likely due to the competitive nature of the work they’re trying to win.

Forecasts are another arena where top and Rising Giants diverge, with the latter trending a bit more optimistic. Last year, the top 100 projected a decline (which did not come to pass) while the second 100 firms anticipated an uptick (which did occur—although even more forcefully than anticipated). For 2024, Rising Giants are forecasting less of a slowdown than the top 100 are predicting, their rosier expectations evidence of a very different recovery trajectory.

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*New this year is data centers, a vertical that also encompasses mission critical and advanced facilities.

Note: “blank cells” = did not report data

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Most Admired Firms

Editor’s Note: Take a look at recent coverage of our Rising Giants most admired firms of 2023 below. Gensler tops the list followed by Rockwell Group, AvroKO, Yabu Pushelberg, and Rottet Studio.

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Percentage of Rising Giants Reporting These Challenges As The Biggest They Face

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Methodology

The Interior Design Giants annual business survey comprises the largest firms ranked by interior design fees for the 12-month period ending December 31, 2023. The listings are generated from only those surveyed. To be recognized as a top 100, Rising, Healthcare, Hospitality, or Sustainability Giant, you must meet the following criteria: Have at least one office location in North America, and generate at least 25% of your interior design fee income in North America. Firms that do not meet the criteria are ranked on our International Giants list. Interior design fees include those attributed to:

1. All aspects of a firm’s in­terior design practice, from strategic planning and programming to design and project management.

2. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”

Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by rank from last year. Where applicable, all per­cent­ages are based on responding Giants, not their total number. 

All research conducted by ThinkLab, the research division of SANDOW Design Group.

Interior Design Unveils the 2023 Sustainability Giants

Sustainability matters to design firms. It’s big business because it’s good business. Although we’ve gathered data on green practices in the past, last publishing the results in 2016, this year we’ve given the top 100 environmentally focused studios a list of their own—allowing us to better track trends in this all-important sector. The big news: In 2022, total fees for the Sustainability Giants were $1.8 billion. Gensler accounted for $563 million of that, making the firm easily the largest by fees.

Many firms integrate environmentalism into their plans; indeed, some 60 percent of projects completed by the Sustainability Giants have measurable environmental goals. Specific targets have a lower percentage of follow-through, however, either because clients don’t request it—or they balk at the cost. Indeed, only 37 percent of clients mention environmental, social, and corporate governance reporting as integral to their project goals.

In other cases, firms embrace some but not all sustainability practices. Roughly a third of respondents’ projects include green design elements but don’t go all the way to achieving certification, again because the client doesn’t want to foot the extra expense. Measurable sustainable initiatives include tracking embodied carbon as well as WELL, LEED, and Fitwel certifications, but most firms track these at low percentages. Where these firms do well is in specification. About half of FF&C products are chosen based on environmental factors, plus some 26 percent of designers are LEED AP or WELL AP accredited.

Given these considerations, we’ll continue to refine what we track and how we gather data. As for next year, the Sustainability Giants predict a comparable $1.8 billion in fees for 2023. We’ll enjoy seeing how this new group evolves.

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Number of Projects Tracking Embodied Carbon

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Methodology

The Interior Design Giants annual business survey comprises the largest firms ranked by interior design fees for the 12-month period ending December 31, 2022. The listings are generated from only those surveyed. To be recognized as a top 100, Rising, Healthcare, or Hospitality Giant, you must meet the following criteria: Have at least one office location in North America, and generate at least 25% of your interior design fee income in North America. Firms that do not meet the criteria are ranked on our International Giants list. Interior design fees include those attributed to:

1. All aspects of a firm’s in­terior design practice, from strategic planning and programming to design and project management.

2. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”

Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by rank from last year. Where applicable, all per­cent­ages are based on responding Giants, not their total number. 

All research conducted by ThinkLab, the research division of SANDOW Design Group.

Interior Design Spotlights 2023 Healthcare Giants

What’s most interesting about the Healthcare Giants isn’t the numbers so much as how the business has evolved during the pandemic—and in general. Consider colonoscopies, tonsillectomies, and other minor procedures that were always a little too major to happen outside a hospital setting. The rise of skilled-care facilities and those dedicated to a single function, such as outpatient procedures or diagnostic imaging, have resulted in lots of smaller design projects. In 2019 the Healthcare Giants worked on 3,200; in 2022 that number rose to 5,500—a 73 percent increase partially attributed to smaller COVID-related projects that may not have otherwise happened. But there’s no question that the design of the physical environment is changing.

And yet, hospital design work remains a stalwart: Acute-care hospitals accounted for half of 2022’s $698 million fees—a bit below the COVID-boosted $790 million in 2020, but handily beating the $607 million pre-pandemic dollars. (The most growth, however, is projected for behavioral health and walk-in/urgent-care clinics.) Furniture, fixtures, and construction products also now outstrip 2019 numbers—$17.8 billion versus $14.6 billion.

But there’s a catch: forecasts. The Healthcare Giants predict $562 million fee income and $14.9 billion FF&C income in 2023, both healthy drops. Whether this is something to fear or just the nature of a market over-boiled by a public health emergency and point-of-service changes remains to be seen. This odd combination of instability and prosperity might just stay with us a while longer.

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Project Categories

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Growth Potential Over Next Two Years

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Editor’s Note: Take a look at recent coverage of our Healthcare Giants most admired firms of 2023 below. CannonDesign tops the list followed by Perkins&Will, and ZGF.

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Methodology

The Interior Design Giants annual business survey comprises the largest firms ranked by interior design fees for the 12-month period ending December 31, 2022. The listings are generated from only those surveyed. To be recognized as a top 100, Rising, Healthcare, or Hospitality Giant, you must meet the following criteria: Have at least one office location in North America, and generate at least 25% of your interior design fee income in North America. Firms that do not meet the criteria are ranked on our International Giants list. Interior design fees include those attributed to:

1. All aspects of a firm’s in­terior design practice, from strategic planning and programming to design and project management.

2. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”

Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by rank from last year. Where applicable, all per­cent­ages are based on responding Giants, not their total number. 

All research conducted by ThinkLab, the research division of SANDOW Design Group.

Introducing Interior Design’s 2023 Hospitality Giants

Ever since the pandemic devastated the hospitality industry, we’ve been waiting for the comeback—and 2022 might be it. Interior Design’s Hospitality Giants brought in $576 million total fees, up 36 percent from the previous year. It’s a welcome surge: When 2020 went viral, so to speak, fees dropped by more than half, to $423 million in 2021, after having enjoyed a decade-long ascent from $600 million to a record $1.1 billion in 2019.

Hotels still make up the lion’s share of hospitality fees—about 49 percent—but that figure has been in gradual decline since peaking in 2013 at 59 percent. Everyone likes nice things, which helps explain why luxury properties account for two-thirds of hotel income overall ($212 million) with boutique and mid-economy income declining—though the $93 million they brought in is nothing to scoff at.

Restaurants ($80 million, 13 percent) and resorts ($67 million, 11 percent) are the next biggest seg­ments, with gaming and country clubs providing steady fees ($51 million combined). Multiuse remains a wildcard. That sector’s mix of hospitality, residential, and retail accounted for 5 percent of all fees ($34 million) last year but has spiked as high as 18 percent in 2019, and 14 percent in 2021. Who wants to bet big on 2023? Inside info: These Giants predict growth in the number of projects they’ll do—if not necessarily fees—in the boutique hotel, resort/spa/country club, restaurant/bar, and yes, multiuse categories.

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Another plus is that Hospitality Giants logged a record 5,700 projects overall, 350 more than the previous high in 2018—and they forecast that an additional 2,000 (!) will be delivered in 2023. Furniture, fixtures, and construction products also staged a rebound, after having plummeted from a cool $19 billion in 2019 to $6.2 billion in 2021 (that tremor you felt was the sector hitting rock bottom). Climbing back to $14.7 billion in 2022, we’re firmly on the road to recovery—although this uptick might be attributed to post-COVID right-sizing rather than a sign of exponential growth.

That’s the story: a general trend upward from pandemic lows. How much and how quickly? Well, the group projects $602 million in fees in 2023, a return to where we started in 2013, beginning that long climb back to the billion-dollar mark. Here’s hoping it doesn’t take as long this time.

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Editor’s Note: Take a look at recent coverage of our Hospitality Giants most admired firms of 2023 below. AvroKO tops the list followed by Yabu Pushelberg, and Rockwell Group.

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Growth Potential Over Next 2 Years

Asia

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Methodology

The Interior Design Giants annual business survey comprises the largest firms ranked by interior design fees for the 12-month period ending December 31, 2022. The listings are generated from only those surveyed. To be recognized as a top 100, Rising, Healthcare, or Hospitality Giant, you must meet the following criteria: Have at least one office location in North America, and generate at least 25% of your interior design fee income in North America. Firms that do not meet the criteria are ranked on our International Giants list. Interior design fees include those attributed to:

1. All aspects of a firm’s in­terior design practice, from strategic planning and programming to design and project management.

2. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”

Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by rank from last year. Where applicable, all per­cent­ages are based on responding Giants, not their total number. 

All research conducted by ThinkLab, the research division of SANDOW Design Group.

Interior Design Reveals the 2023 Rising Giants

There’s rising and then there’s Rising. Our list of the second 100 largest firms injected the moniker with helium in 2022. Total fees came in at $532 million, a 50 percent increase from 2021—well above the recent low of $314 million in 2020, and a hair above pre-pandemic numbers.

“-“ did not report data

As for the breakdown of business segments, hospitality is to the Rising Giants what corporate projects are to the top 100: the big money driver. But while that sector remained a solid number one last year, it’s down to 30 percent of overall fees ($162 million) compared to 38 percent two years ago. Corporate is second, at 25 percent ($131 million), followed by residential at 17 percent ($89 million), and healthcare at 9 percent ($46 million). The Rising Giants predict only gentle fluctuations in this breakdown for 2023, forecasting a slight drop in corporate and a rise in residential, with hospitality holding firm.

Meanwhile, furniture, fixtures, and construction products appear to be booming—more than doubling, to $35.8 billion—but that figure is driven by large totals from a single firm. Still, FF&C had already been rebounding well from a pandemic low of $10 billion in 2020, and the Rising Giants forecast $38 billion for next year.

Furnishings & Fixtures vs. Construction

As with the 100 Giants, the relationship between number of projects and total square footage is somewhat imbalanced. Projects truly popped, at almost 23,000—up from 15,000 in 2021 and nearly doubling the pre-pandemic figure of 12,000 in 2019. Square footage, at 188 million, doesn’t track with it, however. That’s a slight bump from 2021 but a pipe dream compared to 301 million in 2019, likely resulting from firms diversifying their services (more consulting and branding projects), plus hybrid work affecting client’s spatial allocations.

Risers, like the 100, have seen an influx of new talent to execute this work. Design staff members, which had hovered around 2,600 for the past three years, jumped 62 percent to nearly 4,200 in 2022. The all-employee total also increased 27 percent.

Recruiting and retaining qualified staff remains the biggest challenge, so salaries have also risen since 2019. Most employees have seen a 14 to 16 percent raise (project managers/directors excepted), and the average designer salary has climbed to $80,000—the highest since we’ve tracked this data.

Will all this good business hold? This group has offered a healthy 2023 forecast of $583 billion in total fees, a 10 percent increase. And while most are confident about this prediction, fewer are saying they’re “very” or “extremely” so. Semantics? Perhaps. But the Rising Giants are rising indeed.

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See the 2023 Top 100 Giants here.

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Most Admired Firms

Editor’s Note: Take a look at recent coverage of our Rising Giants most admired firms of 2023 below. Gensler tops the list followed by Rockwell Group and AvroKO.

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Methodology

The Interior Design Giants annual business survey comprises the largest firms ranked by interior design fees for the 12-month period ending December 31, 2022. The listings are generated from only those surveyed. To be recognized as a top 100, Rising, Healthcare, or Hospitality Giant, you must meet the following criteria: Have at least one office location in North America, and generate at least 25% of your interior design fee income in North America. Firms that do not meet the criteria are ranked on our International Giants list. Interior design fees include those attributed to:

1. All aspects of a firm’s in­terior design practice, from strategic planning and programming to design and project management.

2. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”

Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by rank from last year. Where applicable, all per­cent­ages are based on responding Giants, not their total number. 

All research conducted by ThinkLab, the research division of SANDOW Design Group.

Interior Design Unveils the 2023 Top 100 Giants

It’s easy to get hung up on symbolic numbers. Like, say, $5 billion. Nice and round. What could it represent, besides a comfortable retirement? In our case, a growth threshold for the Interior Design 100 Giants. In 2022, fees for the biggest firms came in just shy of that, at $4.97 billion—pretty good when you consider the turmoil of the past few years. That figure also marks 12 percent growth over 2021, beating the group’s forecast by 16 percent.

And if you want more fuel for the victory lap, as well as some context for the entire industry, a decade ago total fees for the top Giants tallied $2.44 billion, meaning they doubled in the intervening years. As for how the 2022 fees shook out: At the almost-$5 billion level, there are no insignificant slices of the pie when talking dollar amounts. For example, mixed-use projects make up a mere 1.2 percent of total fees, but that amounts to about $61 million. Though corporate office work remains the biggest driver, at 31 percent of fees (or $1.53 billion), it fell below 35 percent for only the second time in the last decade (2017 being the other blip). That’s a $344 million drop from 2019, when it comprised nearly 40 percent of all fees. So, is this a trend? Well, the 100 Giants forecast $1.5 billion for 2023, or 32 percent of total fees. Time will tell if this is a new reality.

What’s risen to replace corporate? Since 2019, government work is up by $89 million, or 31 percent. Education and transportation projects rose some 20 percent, for a combined $72 million. And of course, the pandemic spiked healthcare by 23 percent, or $139 million—bumping down hospitality from second to third for total fees (more on this subject in their respective sections).

However, healthcare may have peaked as we shift from pandemic to endemic. Sector fees rose only 3 percent since 2021, while hospitality rebounded 21 percent, or $89 million, in that same period. The 100 Giants predict healthcare fees will drop 23 percent next year, which may signal a return to previous levels.

Furniture, fixtures, and construction products also showed health at $74 billion in 2022. Pre-pandemic totals occasionally topped $85 billion, so while the industry is not back to that high, we’ve now hovered in this $73-75 billion range for three years. The problem: a projected 12 percent drop to $65 billion next year. Of all the forecasts, that’s the most dire.

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Note: Firms on this list do the majority of their work overseas and/or are headquartered outside the U.S.

“-“ did not report data

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Total number of projects and square footage also tell a curious story, although the data is admittedly a bit skewed because few respondents reported this metric. From 2016 to 2019, the 100 Giants routinely logged 1 billion square feet from 60,000 to 66,000 projects annually. This year, 66,109 projects were built, but only encompassed 519 million square feet (compared to 65,000/589 million in 2021). Possible indications: Square footage is down as firms diversify into consulting and branding projects—and perhaps hybrid/remote work is allowing businesses to reallocate space.

Now for perhaps the most positive business indicator: Firms are hiring. Total design staff jumped from nearly 18,000 in 2021 to more than 23,000 in 2022—by far the most aggressive upward movement of any data we track. The overall number of employees also leaped from 98,000 to more than 155,000, although that’s still well below pre-pandemic head counts.

Billing rates have risen, too. Designers now bill at $156 per hour versus $133, a 17 percent increase since 2019. Average designer salary also jumped from $70,000 to $80,000 in that same time period, but remained flat in 2022. Other staff members have done particularly well, their salary rising 36 percent in three years.

As to when we’ll hit that big $5 billion mark, it’s unclear. The 100 Giants forecast $4.82 billion in fees for 2023, a slight drop. And a vast majority of respondents—90 percent—are confident in that prediction. That, if anything, might sum up what we’re seeing: Good results? Check. Reason to smile? Check. A lot of uncertainty to come? Check—and mate.

Editor’s Note: Take a look at recent coverage of our Top 100 Giants most admired firms of 2023 below. Gensler tops the list followed by Perkins&Will, Rockwell Group, and Yabu Pushelberg.

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Top Ten Giants by Sector

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Project Categories

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Furnishing & Fixtures vs. Construction

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Methodology

The Interior Design Giants annual business survey comprises the largest firms ranked by interior design fees for the 12-month period ending December 31, 2022. The listings are generated from only those surveyed. To be recognized as a top 100, Rising, Healthcare, or Hospitality Giant, you must meet the following criteria: Have at least one office location in North America, and generate at least 25% of your interior design fee income in North America. Firms that do not meet the criteria are ranked on our International Giants list. Interior design fees include those attributed to:

1. All aspects of a firm’s in­terior design practice, from strategic planning and programming to design and project management.

2. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”

Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by rank from last year. Where applicable, all per­cent­ages are based on responding Giants, not their total number. 

All research conducted by ThinkLab, the research division of SANDOW Design Group.

Interior Design Unveils the 2022 Hospitality Giants

The results for the 2022 Interior Design Hospitality Giants, our survey of the top 75 firms working in the sector, are somewhat like taking a construction elevator in an unfinished hotel project: It may be uncomfortable, but it will still get you where you want to go. Predictions say we will, and results are better than expected, but there’s still post-pandemic corporate pain. Business has been down, but data points to a rebound. Let’s have a look.

Hospitality design bounces back

Hospitality Giants Rankings 2022

Overall fees for the group fell from $576 million in 2020 to $423 million in 2021, a 27 percent drop. But the group forecasts a recovery in 2023 to $491 million. The latest Hot Market Growth Report from ThinkLab, the research division of Sandow Design Group, lists the usual pandemic suspects as reasons for the headwinds: lack of corporate travel, supply-chain issues, rising costs, employment challenges. The good news: Like the pandemic, these issues are predicted to gradually resolve soon.

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Editor’s Note: Interior Design’s 2023 Top 100 Giants are in! See what experts are saying about the current state of the industry. Read more.

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Most Admired Design Firms

Where did the hospitality firms take these hits? Right in the moneymaker: hotels. Always bringing in the lion’s share of fees, hotel work fell from 57 percent of fees to 47, coming in at $208 million. Furthermore, luxury hotel work, source of some of the biggest earnings, has been responsible for nearly a third of hotel fees the past two years; now it’s just 25 percent. But nearly every business segment was down in 2021. Hotels are just the most glaring and devastating to the overall bottom line. There are bright spots, however, such as resorts and restaurants now making up more than 22 percent of fees, from 17 percent. Growth is definitely happening.

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Hospitality Firms with Largest Increase in Fees

International projects are down with only 17 percent of firms doing that work, from 24 percent last year (in 2015, it was about a third of firms). But the Caribbean is clocking in with 60 percent of international firms taking projects—that’s up from 52 percent in 2020. This dovetails with what we’re seeing up and down the U.S. Eastern Seaboard, as approximately 20 percent more Hospitality Giants see the Southeast as a growth hotbed, and nearly half are looking toward the Northeast. But biggest growth region is the Southwest, where 73 percent of respondents see an uptick. ThinkLab’s report breaks regions down even further, highlighting Texas, Arkansas, Florida, and New York as states ready to grow.

Projects in the Middle East are picking up as well as those projects that may have gone on hold over the pandemic. Leisure is hot in Latin America and Mexico. Renovation is still strong. Globally, hospitality is driving city building. A hotel tower is often the anchor experience in a new mixed-use development. This has been driven by the need for new cities to market themselves as open and desirable tourism.”

—Tom Ito, Gensler

Global Growth Potential for Next 2 Years

And yes, let’s talk about optimism for a second. Because that’s the word here. Here’s some sunshine:

—When looking at the U.S regions primed for growth, the Hospitality Giants’s overall enthusiasm is much higher this year: Over a quarter are more bullish than a year ago.
—Firms are using their experience and skills to bring hospitality know-how to other segments. Example: “We’ve made a strong and concerted move into residential, parlaying our hospitality experience into shared spaces and amenities,” CHIL Interior Design senior principal Paul Morissette says.
—Hotel work, luxe and boutique in particular, is expected to rebound starting in 2023. Same for multiuse, as well as resorts, spas, and country clubs.
—Meanwhile, a report from Dodge Data & Analytics shows lodging construction to be one of the most robust growth areas not just next year, but through 2026.

In short: A solid business is still there, and it’s very possible the worst is over.

Fees by Project Segment

During the next 2 years, do firms expect to see more or fewer projects in these segments?

“Our firm is growing exponentially—we just hired 14 new people. Year-over-year, we increased our revenue 30 percent and are looking to do four times the amount of business we engaged in pre-pandemic, which is a great sign for the hospitality and travel industry. As people rush back out into the world for personal and business travel, 2023 is projected to be a record-breaking year for us.”

—Kellie Sirna, Studio 11 Design

Hospitality Project Categories

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Methodology

The annual business survey of Interior Design Hospitality Giants ranks the largest design firms by hospitality design fees for the 12-month period from January 1, 2021 through December 31, 2021. 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 and programming to design and 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. Additionally, where applicable, all percentages are based on responding hospitality Giants, not their total number. The data was compiled and analyzed by Interior Design and ThinkLab, the research division of Sandow Design Group.

Interior Design Unveils the 2022 Rising Giants

If you think of the pandemic as a roller­coaster, then the 2022 business trend data for the Interior Design Rising Giants, the second 100 largest firms, would be a popular one. Like any good coaster, the initial drop was a doozy, with total fees heading down from $521 million in 2019 to $314 million in 2020 as COVID-19 hit the economy. Now, however, it looks like the rollercoaster has troughed and is heading up the next ramp. Total fees for 2021 came in at $354 million, a healthy 13 percent bump. And the Rising Giants forecast the coming year at $416 million, continuing the upward surge.

Rankings 2022

What’s more notable than the forecast itself is the Rising Giants’s certainty in it. Just over half of the firms surveyed are “confident” in next year’s numbers, and three out of 10 are “very confident.” As far as those coming in as “not confident,” well, that number dropped from 31 percent to 14.

Let’s dig a little deeper into the 2021 results to see how much confidence is warranted. Hosp­itality remains the largest business sector for the Rising Giants, accounting for 34 percent of total fees ($121 million—about even with 2020). Corporate office work rose 26 percent to $88 million and accounts for a quarter of all work in this group. Residential is the third largest moneymaker and was up 22 percent from 2020 to $60 million. Healthcare now accounts for 10 percent of all fees and rose 19 percent to $36 million.

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Project Categories and Locations

Again, the forecasts for business sectors are all positive, particularly retail (expected to grow 39 percent in 2022), hospitality (23 percent), residential (19 percent) as well as healthcare and corporate (15 percent each). Furniture and fixtures along with construction products also showed robust recovery, rising from 2020’s $10.2 billion to $15.7 billion. That’s not quite 2019’s $18.5 billion, but these Giants are forecasting $17.1 billion for 2022, so mo­men­tum is gaining.

Work volume metrics are up, too. Total square footage rose by 10 million, or 6 percent, to 180 million. The 2022 forecast is just over 200 mil­lion. As for cost per square foot, the roller­coaster rolls again with $109/foot in 2019, down to $77, and now back up to $118. Total number of jobs has also spiked: 12,039 in 2020 to 15,187, with a forecast of 16,653 in 2022.

Client Issues

Practice Issues

Business Issues

The retreat from work outside the U.S.—as seen in our other Giants groups, as well—continues here. In 2019, 16 percent of the Rising Giants did international work. Now that number is just 7 percent. For those who do this work, Canada and Asia/Pacific Rim saw steep declines in the number of firms working there, while the Caribbean warmed up. As a result, it’s no real surprise that these Giants see the most growth potential in the U.S. Southwest, Southeast, and Northwest. Only two firms said they planned on closing an office in 2022, yet a noteworthy 10 percent plan to expand.

Firms with Most Fee Growth

Design staff numbers are the only ones not currently rising, and in fact have declined from 2,739 in 2019 to 2,593. Billing rates have remained steady ($130 an hour), while fees per employee have deflated, down 29 percent since 2019—$200,000 to $143,000 in real numbers. Staff salaries, however, have crept up, with designers going from $70,000 per year to $75,000. Project managers remained unchanged at $105,000 a per year, while principles/partners saw their comp jump from $155,000 pear year to $187,000.

Fees by Project Type

Project Numbers by Type

As far as the main challenges affecting business, the refrains are pretty much what you hear from businesses everywhere: Re­cruiting and retaining qualified staff. Design firms will always be concerned, too, with earning appropriate fees and dealing with demanding clients. But here’s one telling data point in the “business challenges” survey: Last year 87 percent of firms were worried about the uncertain economy; this year it’s only 55 percent.

And maybe that’s the watchword right now: optimism. The 2022 forecasts—and the Rising Giants’s growing confidence in their business prospects—show that while, sure, we may not be able to shake off this pandemic once and for all at the moment, firms are still doing great and in-demand work while we figure out all that other stuff.

Methodology

The second installment of the two-part annual business survey of Interior Design Giants comprises the second largest firms ranked by interior design fees for the 12-month period ending December 31, 2021. The first 100 Giants firm ranking was published in February. Interior design fees include those attributed to:

1. All types of interiors work, including commercial and residential.
2. All aspects of a firm’s interior design practice, from strategic planning and programming to design and project management.
3. Fees paid to a firm for work performed by employees and independent contractors who are “full-time staff equivalent.”
   Interior design fees do not include revenues paid to a firm and remitted to subcontractors who 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. Ties are broken by the dollar value of products installed. Where applicable, all percentages are based on responding Giants, not their total number. The data was compiled and analyzed by Interior Design and ThinkLab, the research division of Sandow Design Group.