February 1, 2016

Giants Research: Looking Back at 10 Years of Hospitality Design Fees

The spa at the Grand Hyatt Shenyang, designed by Hirsch Bedner Associates (ranked #1).

If there is such a thing as business interruptus, we may have seen an example of it with our Top 75 Hospitality Giants when you look at their total revenue growth over the past decade. 2006 may seem like 100 years ago rather than 10, but traveling back in time to look at some numbers shows how a business that was experiencing explosive year-over-year growth was thrown into an involuntary hiatus by the Great Recession, but once the sky cleared, the growth resumed almost as if nothing had happened.

In 2006, the Hospitality Giants pulled in $380 million in fees. A year later, that number jumped to $473 million, a 24 percent rise. The next year, revenue leaped to $589 million, another 25 percent. It’s easy to say that that kind of growth in any business isn’t sustainable long-term even when the sun shines on the overall economy, but we’ll never know how true that is for the Giants—because 2009 happened. And 2010. Within two years, revenue plunged to $403 million. Interruptus, indeed.

And yet! In 2011, annual revenue began climbing again, kept climbing, raced beyond $600 million, and in 2014 threatened $700 million—a 73 percent rocket ride in three years. Exciting, but…sustainable? That’s the 693-million-dollar question (which happened to be the total revenue in 2015, off a tick from 2014). Has the growth topped out, or merely paused for a breather? Well, the Giants forecast another 10 percent rise to $762 million in 2016. For our money, (and theirs!), we can’t wait to see what happens…

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