I’m going to stay positive in 2010 and say that our industry is on the upswing. But I think it’s also instructive to look back a little and see how the financial difficulties have been transformative for the design industry.
Todd Lundgren, VP at RTKL Associates, says the economic downturn generally has led to a greater level of economy and efficiency—people want to get more and pay for less. As a result, the challenge for designers is providing that ‘more’ in creative, flexible and efficient ways.
“Increasingly, we’re seeing ‘design’ become commodity-driven. Rather than being about design value, it’s about how much, how many, and how I can cut costs,” Lundgren says.
Brent Lynch, principal and EVP of HFS Concepts 4, says that due to the significant decrease in projects and the resulting staff reductions, the remaining staff members at a firm are required to do more than ever. And the crunch affects everything.
“Budget constraints are pushing us to develop new resources … at lower costs,” he says.
Don Harrier, business development/project manager and associate principal, HKS Hill Glazier Studio, says he’s seen numerous top-flagged hotels and resorts taken back into receivership by lending institutions, due to unmet occupancies and lagging ADR.
“The lenders are not in the business of managing a portfolio of hotel assets and are often approaching any reasonable offer as a way out of holding onto a distressed property. Developers are finding that the cost of purchasing existing properties is well below the cost of new, ground-up developments—and they often have established flags to support a new repositioning of the asset,” he says.
Ilija Karlusic, design director and principal of HBA-Hong Kong, says hospitality design is always the part of construction that gets hit first—but he is staying positive.
Karlusic says: “It definitely has affected us in the sense that we don’t have as many projects on hand … we were experiencing a super boom, and we have now come down to more sane levels, where designers can take a little breather and totally immerse themselves in their designs and projects again. We are now in the early, early beginnings of a new upturn.”
Looking ahead
2010 doesn’t look to be a year of many new-builds or redesigns—in the U.S., at least. Some designers are shifting their focus overseas.
“Our focus will be on the demand generated from the renovation market,” Lynch says. “In China, we continue to see new build projects and expect to experience continued success there.”
Andrew Chiu, principal for DiLeonardo International, agrees that Asia definitely is going to be the hot market for designers, and China in particular.
“The Chinese government’s stimulus plan took effect earlier this year and many projects have started back up again with new deals being signed every day,” he says. “There will be more limited-service brands and economy brands opening throughout the country, while luxury brands continue to open up at prime sites in secondary and tertiary cities.”
Budgets will continue to be strained as owners take a conservative approach to renovations. But better days are ahead. The multitude of distressed hotel properties on the market likely means that many hotels will change hands. New owners will plan repositionings. And that will mean more work for the firms that are the most innovative, flexible and efficient.
Enjoy the issue.
