Interior Design Unveils the 2021 Rising Giants


We’ve been following our Interior Design Giants since the pandemic began, tracking their business trend data for signs of economic impact brought on by COVID-19. Our previous reports this year on the Top 100 Giants and Healthcare Giants did show some cracks, but the damage was far less than expected. In some areas, those Giants even flourished. But the third in the group, the Rising Giants, the 93 largest firms behind the top 100, have had a harder time mid- and post-pandemic, but there are still a few bright spots to note.

A Closer Look at Interior Design’s Rising Giants

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Revel Architecture & Design

Project: Alternative Technology Company

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Dawson Design Associates

Project: The Hotel Zena

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Project: First Gulf Office

Interior Design’s Rising Giants Ranking

Rising Giants Design Fees

Business has been strong for these Rising Giants—in 2019 and the years leading up to it. Total fees for the year came in at $604 million, a sizeable 21 percent jump from the previous year’s $500 million take. That’s stellar, The initial stats: The Rising Giants logged $521 million in 2019 and forecast $547 million in 2020. But that, naturally, was pre-pandemic thinking. The actual 2020 number was $314 million. Fees fell particularly short in their usually robust corporate office segment, as well as in hospitality, retail, and government. A lot of these losses stand to reason: Remote workplaces and the decrease in travel changed every­thing. A tough blow, but 69 percent of these firms predict a 10 percent gain, to $340 million, for 2021 fees. Vaccination rates are increasing, states are removing restrictions, and on-site work is resuming.

So, what will 2021 look like? The Rising Giants still expect corporate offices to make up more than 20 percent of business, expecting some growth in the technology space. About half the firms surveyed expect no change or a drop-off in jobs surrounding coworking spaces, a possible signal that many still expect to stay home in 2021. But a significant gain, to the tune of 20 percent, is forecasted for healthcare-sector work. Furniture & fixtures/construction products were also hit hard in 2020, with totals falling from $18.5 billion in 2019 to $10.2 billion in 2020. The dollar split between F&F and construction generally remains consistent year to year, but even that shift­ed, with F&F spending rising 18 percent and accounting for a third of this pie. But the Rising Giants are optimistic going forward, with a forecast of $13.2 billion for 2021.

The next set of data shows just how mad the scramble for work turned out to be in 2020. Total square footage of all jobs fell from 301 million to 170 million, the lowest total in five years. But total jobs for 2020 came in at 12,039, an almost identical total from 2019’s 12,068. Firms were able to lock up whatever work they could. Four out of 10 of those jobs were new construction, 49 percent renovation, and 10 percent refreshes of completed projects. For 2021, firms are predicting an uptick to 13,400 jobs. The Rising Giants got gritty and took on more smaller projects to keep their favorite staf­fers intact. This loyalty to talent—key to a service industry—is likely to pay dividends for years to come.

Median Annual Salary

Median Hourly Rate

Fees by Project Type

(*in millions of dollars)

A Closer Look at Design Market Sectors

In terms of where the work was, it was mostly domestic; nine out of 10 projects were in the U.S. The firms seeing growth potential here drop­ped slightly from 94 to 87 percent, but most agree that the Southwest has the best prospects. Internationally, work decreased from 16 percent to 9 in 2020, and only a third of firms expect growth there, compared to 40 percent last year. This signals that these business trends are less about domestic vs. international and more about challenging conditions everywhere (restrictions on international travel, supply line stresses).

If you’re a designer, you probably had no issues finding work, since design staff numbers only fell from 2,739 in 2019 to 2,600; in fact, recruiting qualified staff has become much less of a challenge for the Rising Giants. Firms pulled in $177,000 in fees per design staffer, down 11 percent. But hourly billing rates didn’t change much: principal/partner was $250, project manager/director $173, designers $130, and other staff $100. More good news is that if you worked at a firm in 2020, you probably made the same amount you did in 2019, as annual salaries stayed largely unchanged year to year.

Project Numbers by Type

Breakdown of Projects

Business Growth and Design Value

Another highlight is that although the Rising Giants continue to struggle with clients’ willingness to pay what a project is worth, they’re far more likely than last year to understand design value. But 2020 did show a rise in difficulty finding new clients, with closer to half of firms agreeing this is impacting the bottom line. Creating new business/diversifying has surged to the forefront of practice issues (44 percent last year, 58 this year). But the downturn has allowed firms space to rethink strategies. “I’m looking forward to internally examining the way we work,” Hayley Morgan Heider, associate at Looney & Associates, says.

“After 15 years, I’m seeing a big shift in how work gets done.” Design Republic principal Barry Ludlow concurs: “The willingness of people, be they real estate brokers, owner’s reps, clients, to say, ‘This is all new. There are no experts. How can we do this better together?’ The sharing of information and creation of thought leadership has been amazing to watch. Hopefully, this collaboration makes us all better going forward.” While the numbers aren’t necessarily bright spots as we look backward, there are key learnings they tell us about the future of our Rising Giants. More than any other group, they skillfully adapted, they reframed, and they are preparing to thrive.

Unsurprisingly, 87 percent of the Rising Giants reported that the uncertain economy has become a business issue, compared to 36 percent last year, a trend also seen in our Top 100 Giants. It’s the questions everyone’s asking. How much did the world change in 2020 and how many of those changes will be permanent, and how many will serve as roadblocks to recovering A&D businesses? No one knows. So we’re in a similar spot to a year ago: Lots of questions, wait and see, hope for the best. As the country continues to open up, with any luck, so will business prospects.

Firms With Most Fee Growth

(*in millions of dollars)