One of the primary factors in choosing between a hotel design agency and an in-house team is cost. On the surface, hiring an in-house team may seem more cost-effective, particularly for hotels that require ongoing design work. However, there are several hidden costs to consider, which may tilt the balance in favour of an external agency.

When employing an in-house design team, the hotel must account for not just salaries but also the additional overheads associated with full-time staff. This includes benefits such as pensions, paid holidays, health insurance, and ongoing training. Additionally, there are office and equipment costs, which may include specialised software, design tools, and workspace infrastructure. For smaller hotels or those that do not require continuous design work, maintaining an in-house team can become financially burdensome. In the UK, the annual salary for an experienced designer can start from £35,000, and this figure rises when factoring in overhead costs.

While hiring an agency may involve a more substantial upfront cost for individual projects, the long-term financial commitment is often lower. Agencies typically operate on a per-project or retainer basis, allowing hotels to scale up or down depending on their current needs. For hotels that require intermittent design services, such as during renovations or rebranding efforts, hiring a hotel design agency can be more cost-effective as there are no ongoing salary or overhead costs. Many businesses report saving as much as 20-30% by outsourcing design services compared to maintaining an in-house team, especially when considering training and retention costs.

It’s important to consider the value provided by each option. While an in-house team may offer consistency and a deeper understanding of the hotel’s brand, agencies bring diverse experiences, broader market insights, and fresh creativity that can offer a competitive edge. Therefore, the decision should not be purely cost-driven but based on what kind of value each option delivers in terms of creative output and overall return on investment.

The creative potential of your design team plays a crucial role in shaping your hotel's identity and appeal. Whether you opt for an in-house team or an external hotel design agency, the ability to innovate and adapt is key to staying competitive in a constantly evolving hospitality market.

An in-house design team often brings a deep understanding of the hotel's unique brand identity, culture, and operational needs. This intimate knowledge allows for designs that are highly tailored to the specific vision of the hotel. However, the downside can be a tendency toward creative stagnation. Working exclusively within a single brand or hotel group, an in-house team may fall into familiar design patterns, lacking the fresh perspective that comes from engaging with diverse projects across different clients and sectors. Studies show that internal teams may struggle to innovate due to limited external exposure.

Additionally, in-house teams may not always have access to the latest design tools or expertise in emerging trends. The cost of maintaining updated software and providing continuous training can be significant, further limiting their ability to explore new ideas.

Hotel design agencies, on the other hand, bring a wealth of external experience from working on a variety of projects. This exposure to different brands, hotel types, and even non-hospitality sectors enables them to push creative boundaries and propose bold, innovative ideas that an in-house team may not consider. Agencies can also leverage specialised knowledge and cutting-edge trends, often offering fresh perspectives that can set a hotel apart from competitors. In fact, companies that invest in consistent design improvements can see returns as high as double those of their competitors, according to industry data.

An agency’s broader expertise and industry connections can also foster collaborations with other creative professionals, such as architects or lighting designers. This helps integrate diverse and innovative design elements into your hotel, giving it an edge in markets where guest experience and visual appeal are critical to standing out.

When considering design needs, hotels must also account for long-term management and scalability. Whether you’re planning a single property or managing a growing portfolio, the ability to sustain and scale design efforts is crucial. Here’s how both an in-house design team and an external hotel design agency stack up in terms of managing ongoing design needs and scaling operations as your business grows.

An in-house team offers consistency in design, which can be particularly beneficial for maintaining a cohesive brand identity across multiple projects. However, scaling an in-house design team to accommodate growth can be challenging. As your hotel portfolio expands, you may need to increase the size of your in-house team, which involves recruitment, training, and significant long-term financial commitment. This growth in overhead can slow down the flexibility needed for quick expansions or renovations.

Additionally, a small in-house team may struggle to handle simultaneous large-scale projects, leading to delays or overwork. As design needs grow, so does the pressure on in-house staff, which may result in burnout, reduced creativity, and potential bottlenecks in the design process.

Design agencies, by contrast, offer the ability to scale design efforts quickly and efficiently. Since they are not bound by the limitations of a small team, they can allocate resources based on project size and timeline. This flexibility is particularly advantageous for hotels that are rapidly expanding or undergoing large-scale renovations.

An agency can bring in additional expertise or subcontract specialised tasks as needed, ensuring that deadlines are met without compromising quality. Furthermore, agencies are accustomed to handling multiple projects at once, which means that scaling operations for multiple properties is more streamlined and efficient.

For hotel groups with international or multi-site portfolios, working with a design agency can also facilitate smoother coordination of design projects across locations, ensuring a consistent brand identity while allowing for local customisation where necessary. This scalability allows hotel chains to maintain brand standards while still offering unique design elements in different markets.

Choosing between an in-house design team and a hotel design agency often depends on the specific needs of your hotel. The size, market position, and long-term goals of your property will influence which option is best suited to your business. Below, we provide tailored recommendations based on different hotel types.

For independent and boutique hotels, working with a hotel design agency is often the more practical option. Boutique hotels rely heavily on unique, standout designs to attract niche markets and provide a personalised guest experience. A specialised agency can bring fresh, innovative ideas that align with the hotel’s brand, offering a unique look and feel that differentiates the property from competitors. According to recent industry reports, demand for boutique hotels is growing significantly faster than for traditional branded hotels, with an 8% year-over-year growth compared to just 2% for larger chains. This demonstrates the value of distinct, creative designs in helping boutique hotels stand out in a competitive market.

Since boutique hotels typically have fewer ongoing design needs compared to larger hotel chains, hiring an agency on a project-by-project basis can help control costs while still delivering high-quality, distinctive designs. Furthermore, agencies bring experience from working with various properties, which can inspire more creative solutions than an in-house team might offer.

For large hotel chains with multiple properties, consistency and scalability are key. An in-house team can provide that continuity, ensuring that brand standards are upheld across all properties. Large hotel chains often benefit from having a dedicated in-house design team that understands the brand’s identity and can apply it across numerous locations. This approach helps maintain a uniform look and feel, which is essential for brand recognition.

However, even large chains may choose to supplement their in-house team with external agencies for specific projects, such as major renovations or rebranding efforts. In these cases, the combination of in-house knowledge and external creative input can produce optimal results, balancing consistency with fresh innovation.

Luxury hotels, which cater to discerning guests, typically require bespoke designs that reflect their premium positioning in the market. For these hotels, design is not just about aesthetics but about creating an immersive, luxurious experience that justifies higher room rates. A design agency, with its access to specialised expertise and cutting-edge trends, is often better suited to delivering the bespoke, high-end designs that luxury hotels need.

Working with an agency allows luxury hotels to tap into a wide range of creative talents, from interior designers to architects and artisans, ensuring that every detail is meticulously crafted to enhance the guest experience. For luxury properties, the flexibility and innovation offered by an external agency make it the preferred choice over an in-house team.

Ultimately, the decision between hiring a hotel design agency or maintaining an in-house design team depends on several factors, including budget, the scale of your operations, and the specific goals of your hotel. For smaller, independent, or boutique hotels, working with an external agency often provides a cost-effective way to inject fresh, innovative ideas into the property. Agencies offer flexibility, expertise, and the ability to scale projects up or down, which is ideal for hotels with intermittent design needs. Modern design trends, such as open floor plans that positively impact the retail experience in a variety of ways, have become particularly popular in hospitality spaces as they promote a sense of openness, improve guest flow, and create versatile environments—areas where external agencies excel in providing creative solutions.

Larger hotel chains may benefit from the consistency and deeper brand knowledge that an in-house team can provide, especially when managing multiple properties and maintaining a uniform brand identity. However, supplementing this with the creative input of external agencies for special projects can enhance innovation without sacrificing brand cohesion.

Luxury properties, on the other hand, often find that the bespoke expertise of an external design agency is essential to crafting the unique, high-end experience their guests expect. The external agency's ability to integrate luxury trends and tailored design solutions makes it the best fit for hotels looking to deliver a premium guest experience.

In the end, there is no one-size-fits-all solution. The right choice will depend on the unique needs of your hotel and the kind of experience you want to create for your guests. By carefully evaluating the strengths and limitations of each option, you can make a decision that not only meets your current design needs but also positions your hotel for future success.