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Video: "Undercutting by design firms ruins the market for everyone," Kristina Zanic

Video: "Undercutting by design firms ruins the market for everyone," Kristina Zanic

The designer discusses the challenges of working in a fee- and client-driven market

Kristina Zanic; Photo: Rajesh Raghav
ITP Images
Kristina Zanic; Photo: Rajesh Raghav

Commercial Interior Design speaks to Kristina Zanic, winner of the Interior Design of the Year: Hotel category at the 2018 Commercial Interior Design Awards for her refurbishment project, Ritz Carlton, Al Wadi in Fujairah, UAE. 

Working on numerous hospitality projects with repeat clients, surely she doesn’t have to pitch for business? Surprisingly, her answer is “no”. “We still pitch for projects against other firms,” she says as a matter-of-factly. “It is very competitive and fee-driven now than it was four years ago. Clients are looking for more cost-effective lower fees from designers.”

When asked if firms drop their fees drastically to bag projects, she says that some are dropping their fees to levels much lower than what they would normally do, “just to survive”. Implying that this isn’t Darwin’s “survival of the fittest” evolution, Zanic is convinced that in the long run, it doesn’t pay off. “You have to re-strategise. It’s complicated because you still have the same business costs. You just have to rethink more creative ways of working on projects. It’s challenging to provide a service and not compromise on the standard and quality.”
Zanic observes that the undercutting tendency to win projects ruins the market for everyone, and this can be attributed to the lack of an unofficial “code of practice”. “Sometimes, I fancy getting all the firms together, and say that we should really stick to our guns together, and not go under our standards.”

Predatory pricing is an unfortunate practice in the industry as Zanic points out that companies like hers spend time and money on setting up quality guidelines and standard operating procedures to ensure that they have the ISO ratings, indemnity insurance, and just being above board in every step of the way. “Then you get smaller firms that don’t have such structured practices challenging you. It’s a client’s market at the moment, which is unusual for Dubai. There are still things happening but not on the scale that it used to. Thankfully, we haven’t relied on a single market, as we’re simultaneously working on overseas projects also.”

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