Market Forecast: Expect a Good Year

Alfie Treleven, president of Sprague Pest Solutions in Tacoma, Wash., is planning for “organic growth in double digits.” Ravi Sachdeva, CEO of American Pest Management in Manhattan, Kan., anticipates 20 percent growth in existing markets. Even in the “rustiest of the rust belt,” David Hersh, president of Hersh Exterminating Service in Hermitage, Pa., is feeling positive. “If we can get 5 percent, 6 percent we’re going to be tickled; anything above inflation is growth,” he said.

In fact, 68 percent of PMPs have a positive or very positive outlook for the industry in 2017 with 83 percent expecting revenue to exceed that of 2016, according to the PCT-NPMA 2016 Business Outlook survey. Last year was nothing to sneeze at: More than three-fourths of survey respondents said 2016 revenue was up year-to-date from 2015.

Pests played a role — 84 percent characterized pest pressure in 2016 as average to above average — and services to control bed bugs (31 percent), ants (18 percent), rodents (13 percent), termites (11 percent) and cockroaches (8 percent) were cited by PMPs as the five biggest growth markets.

These same services will fuel growth in 2017, with bed bugs (28 percent) topping the list. Although technically not recurring revenue, bed bug work is not going away, said Bill Horgan, president of Debug Pest Control in Chepachet, R.I. “You pretty much can bank on the phone ringing for bed bugs now every year,” he explained.

Mosquito control also is a bright spot. Fourteen percent of PMPs said this service will drive company growth in 2017, bumping cockroach control (6.5 percent) out of the top five.

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Horgan doubled his mosquito and tick control service revenue in 2016 by cross-selling existing customers. It has become a “whole new category” of service; clients are “jumping on board,” especially with vector-borne illnesses getting a lot of news coverage, he said.

A focus on food protection and health care markets should deliver “one of our best years ever,” said Dale Bauerkemper, who oversees Wil-Kil Pest Control in Menomonee Falls, Wis., and Holder’s Pest Solutions in Houston, Texas, for Copesan Services.

A strong U.S. economy also should help the industry. Treleven expects “all market segments that our industry supports” to improve, although rising interest rates may give the housing market pause.

About one-third of PMPs (37 percent) feel positive or very positive about the U.S. economy in 2017, 68 percent are positive or very positive about the pest management industry, found the survey.

“There’s a massive amount of potential clients who have not yet chosen professional pest management services,” said Treleven, crediting efforts of the Professional Pest Management Alliance to expand the market. Building the pool of potential customers, not fighting for the same ones, is “our biggest opportunity” for growth, he said.