A new analysis of data for the United States heritage compliance industry presented at the Society for American Archaeology annual meeting in April 2014 shows that the industry grew at a mean annual rate of 1.6 percent since 1990. Despite decades of nominal growth, real growth has remained relatively flat for the last 25 years (Figure 1). Real growth is non-inflationary growth. The U.S. heritage compliance industry is currently estimated to be just over $928 million in size and expected to reach $1 billion in 2015.
During the 1970s and particularly during the 1980s, real industry growth hovered around 15 percent annually with the exception of 1979 and 1980 which had low, but still positive, growth (Figure 2). There have been only four years since 1971 with real negative growth: 1995, 1996, 1997, and 2009. An abrupt, but currently unknown, change took place in 1990 and marked the end of two decades of aggressive industry growth. Since this time, growth has remained in the low single digits.
There are many ramifications of this new information, not least of which is the ability of the industry to attract investors as an entire generation of founding owners are divesting for retirement. New investors seeking a competitive return on their investment are likely to be reluctant to take equity stakes in firms in an industry without significant growth.
This new analysis was presented in a paper by Dr. Christopher D. Dore, a heritage business consultant and Adjunct Professor in the School of Anthropology at the University of Arizona, entitled “The Two Greatest Business Challenges Heritage Consulting Firms must Solve for Future Success.” Dr. Dore’s paper was in a symposium entitled “40 Years of CRM (1974-2014): Accomplishments, Challenges, and Opportunities”. Dr. Dore stated that “while I’ve been tracking industry metrics for nearly a decade, this new analysis caught me by surprise.” He continued “we have known that some individual firms have been struggling to add value over this period as heritage services have been increasingly commoditized. To see this expressed at the scale of the entire industry, though, was unexpected.”
Consolidation of heritage compliance firms in the United States continues as more and more owner/operators seek retirement and firms struggle to gain market share. Today, the largest heritage-only firms only hold approximately 1-1.5 percent of market share of the compliance sector, now at $928 million annually and forecast to grow to $1.25 billion by 2020. Yesterday, Heritage Business Journal (HBJ) received this press release from ASM Affiliates and Rechtman Consulting announcing a new merger. Company news can be submitted to HBJ from the “Submit Press Release” page.
HILO, HAWAII – DECEMBER 3, 2013 – Rechtman Consulting has been acquired by ASM Affiliates (ASM). Going forward the company will operate as ASM Hawaii. Bob Rechtman will be leading ASM Hawaii as Managing Director for its Hawaii and Pacific operations. The transaction involved the assets of Rechtman Consulting including its existing contracts and proposals. All the current employees have joined ASM Hawaii. Henberger served as the exclusive advisor to ASM. Financial terms were not disclosed.
“Rechtman Consulting’s reputation, its book of business and Bob Rechtman’s desire to join a larger entity, thereby allowing him to focus on his work and his clients, attracted us to this opportunity,” says ASM’s COO Bill Graham, who spearheaded the initiative. “To better serve our existing clients we had been looking for a while to expand our geographic footprint to Hawaii and the Pacific. The addition of Bob Rechtman and his team will allow us to accelerate our ability to meet the needs of our clients,” added John Cook, CEO of ASM.
“I am excited about the opportunities this acquisition provides to me and my employees,” says Bob Rechtman, Managing Director ASM Hawaii. “The cultural resource management industry today requires marketing and financial resources that, as a small operator, Rechtman Consulting was no longer able to afford on its own. I believe that ASM’s values and mine are closely aligned. Together we will be able to better serve our existing clients and expand into new markets that we were previously not able to enter.”
Many of you who read Heritage Business Journal (HBJ) know that this blog has taken a bit of a hiatus. This is due to my appointment as Editor of the Society for American Archaeology’s new journal entitled Advances in Archaeological Practice: A Journal of the Society for American Archaeology. This volunteer position is quite time consuming and has superseded, at least for a while, other professional activities to which I volunteer my time, such as coordinating HBJ. That said, Heritage Business Journal is always looking for new contributors from around the world and I’ll always find the time to see that the work of HBJ contributors, current or new, gets published.
Please note, though, that Advances in Archaeological Practice is one of the few places where you can publish peer-reviewed work on the business of heritage. Not only am I encouraging you to read this new journal, I’m encouraging you to contribute manuscripts on business topics! At least through 2016, when my term ends, you know that the journal has an editor that is passionate about heritage business topics. The first two issues (August and November 2013) are free and can be read here. Beginning in 2014, the journal will be for paid subscribers or included as a part of membership in the Society for American Archaeology.
If you are interested in contributing a business article to this exciting new journal, please refer to the Instructions for Authors. If you have questions or want to discuss an idea, please feel free to contact me at firstname.lastname@example.org.
A new, 11 October 2012, blog post by Jenna Goudreau of Forbes staff using data from the Center on Education and the Workforce at Georgetown University reports that anthropology and archaeology top the list of the worse college majors in economic terms.
Topping the list at No. 1, anthropology and archeology represent the worst choice of college major in economic terms. Recent college graduates of the major, those ages 22 to 26, can expect an unemployment rate of 10.5%, well above the national average. When they do land a job, the median salary is just $28,000, compared to a mechanical engineer’s initial earnings of $58,000.
The annual conference of the American Cultural Resources Association (ACRA) was held a few days ago in Seattle, Washington. ACRA is the trade association for the heritage compliance sector in the United States. While the ACRA program is filled with valuable business topics, the real benefit of attending is gained from talking with company owners and senior employees in the hallways and at the many social events. People often say things about their businesses that they probably shouldn’t and one always comes away from the meeting with a wealth of information about competitors and the compliance sector as a whole.
My back hallway sample, probably representative although not statistical, indicated that the compliance sector in the United States is strong. Most companies reported that 2012 has been a good year for business, with more than a few companies reporting that this year will be their strongest year since the recession of 2008/2009–some reporting their best year ever. Strength is primarily coming from activity in the mining, electrical transmission, alternative energy, and oil/gas client sectors. This pattern of strong performance appears to be geographically uniform, although there are some areas of the country doing better than others due to geographical factors (e.g. locations of oil fields and mineral resources). There are, however, a few gaps in the compliance sector’s overall strong business performance. A few firms reported that they are still having difficult times and have yet to really rebound from the recession four years ago. What is interesting about this is that a few of these firms are well known firms that have been market-share leaders in the past.
Engineering News-Record recently released its list of The Top 200 Environmental Firms. Published annually, this year’s list is based on 2011 revenue.
|Rank||Company||Heritage Services||Revenue (million)|
|1||CH2M HILL Ltd.||Yes||$3,835|
|3||Veolia Environnement SA||No||$3,294|
|5||Tetra Tech Inc.||Yes||$2,050|
|6||AECOM Technology Corp||Yes||$1,768|
|8||The Shaw Group Inc.||Yes||$1,559|
Half of the top ten firms on the list provide in-house compliance services for heritage resources. On a similar list of design firms, seven of the top ten firms were in-house providers of heritage services.
Unfortunately, what most people want to know about these firms isn’t available: how much of their overall revenue comes from their heritage consulting activities. While most of these companies are publically-traded companies and report their financials, the filings are not fine enough to go down to the level of heritage services. Read more…
Heritage tourism is on the increase, states a Native American Times article (3 April 2012) by Susan Montoya Bryan. Based on a report commissioned by the Navajo Nation from Northern Arizona University, data show that some 600,000 visitors made nearly $113 million in direct purchases on the reservation in 2011. That represents a 32 percent increase in tourism spending since 2002.
Surprisingly, this increase occured over the same period when U.S. gasoline prices rose from approximately $1.80 to $3.90 a gallon. The Navajo Nation, a soverign nation since 1868, is the largest Native American reservation in the United States. It covers 27,000 square miles in Arizona, New Mexico, and Utah. Traveling to the Nation by automobile, and there are few other options for visitors, is a significant trip from almost anywhere. However, the article states that U.S. visitors to the Nation were actually down in the period since 2002. It was non-U.S. visitors, primarily from Germany and France, that were up more than 11 percent and responsible for the increase.