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Coffee Talk
+ Irish company
opens center
Graham Peakin, chief executive officer of 1800Hotels.com, a hotel reservations company, started the company six years ago with no money, faxing Irish businesses a list of hotels from his tiny apartment in Dublin, Ireland each morning, waiting for replies.
At first, there were a trickle. Then an avalanche. A Web site soon followed.
Recently, Peakin, who attended St. Petersburg College, opened a call center north of downtown Tampa with eight employees and will likely expand it as his $40 million company grows globally.
Among the keys for Peakin: Persistence, patience, cost controls and realizing early on that the key for his business was the conversion rate - getting a high percent of the people he called to book hotels. That meant targeting the decision-makers at companies.
After bringing in an estimated $40 million in revenue 2008, 1-800 Hotels hopes to reach $80 million in 2009.
His other growth strategy: Use local people to speak to customers, not robots or recordings.
"They can advise a customer in a better way than a computer can," Peakin, 35, told Coffee Talk. "And the word of mouth spreads. There's someone to help them."
The biggest lesson he's learned as CEO? That 100% growth is the best you can do.
"If it's faster, your infrastructure can't support the growth," he says. "Fast but careful growth is what you want."
Coffee Talk asked if 1800 has done business with its fellow countrymen in U2. It would love to, but hasn't heard from the entourage for the Irish rock band. But it has likely done business with its fans, Peakin says.
+ Restaurant owner
rides zigzagging economy
When Sean Murphy, owner of one of the Gulf Coast's highest of high-end waterfront restaurants, won his first Zagat award more than 10 years ago, he had no idea what a Zagat was.
As many now know, it turns out Zagat's is the Academy Awards of restaurant reviews, a guidebook to where the best restaurants are in just about any town. And just last month, Murphy was told that his Anna Maria Island restaurant, Beach Bistro, earned the highest ranking in Florida for food excellence in 2008, scoring 28 out of 30 points.
The ranking earned Murphy congratulatory phone calls, lots of pats on the backs and even an interview with a USA Today reporter for a future story in the paper's travel section. The latest Zagat's guidebook says the restaurant has some of the best food on the Gulf Coast, cuisine that's as good as any in New York or Paris.
But there's one thing the award, or the food that produced it, hasn't been able to deliver: more sales. Indeed, Murphy, says revenues "were way off" in September and October, months that are normally slow to begin with. November, however, was up just a little bit for the restaurant, which generates about $2 million a year in revenues, Murphy says.
Making things trickier, says Murphy, is the trend he's been seeing in smaller checks per customer - something he thinks he will keep seeing into 2009.
Like several other Gulf Coast executives and small business owners, Murphy is unsure how long the economic doldrums will last.
"I think people will be spending less money than they did in the past," Murphy tells Coffee Talk. "I don't know how that will impact us."
+ Luxury realty firm
makes its mark quickly
When Judy Green took over the Sotheby's luxury realty franchise for the Greater Sarasota market Nov. 1, she said it wouldn't take long for her to make some significant changes.
Turns out Green, a onetime senior executive for the national office of Coldwell Banker, wasn't just talking hype. Her company, Signature Sotheby's International Realty, has bought the Sarasota office of Premier Properties, one of its main competitors in the local market. Terms of the deal, announced Dec. 10, weren't disclosed.
"Independently, our companies share many of the same ideals." Green says in a statement. "By joining forces, we now have the opportunity to build on this foundation and write a new chapter in Sarasota's real estate history."
Premier Properties' parent company is the Naples-based Lutgert Cos., a conglomerate of high-end development and luxury home projects. Premier opened its Sarasota office in 2006, hoping to capitalize on the then still-hot luxury and waterfront homes market. Steve Bailey, a local real estate veteran who once was a top executive for Sarasota-based Michael Saunders & Co., had run the office. Bailey couldn't be reached for comment.
Signature Sotheby's will be picking up Premier's 34 agents, who bring about 175 listings to the company. Signature plans to maintain Premier's downtown Sarasota office.
+ Trust services
are hot again for banks
It wasn't long ago that a bank's trust department was considered the twilight zone at many financial institutions. They didn't bring in much money and they were complicated and costly to run.
In fact, many banks gave up on trust departments and the larger institutions consolidated those functions in call centers.
But as the lending business runs into trouble, the slow-but-steady trust department has been regaining respect. Banks are searching for any income that's not related to loans, such as money management and trust administration.
The most recent example of the trust revival was Naples-based TIB Financial, the parent company of TIB Bank, The Bank of Venice and Naples Capital Advisors Inc., which received state approval for managing trusts.
Look for more Gulf Coast banks to start offering trust services. It's a reliable source of non-interest income that will help weather the lending downturn.
+ Corporate tax debacle
averted by Florida Cabinet
Thousands of businesses across the state will be spared harsh tax penalties next year, courtesy of a special rule passed by the Florida Cabinet Dec 9.
The rule change fixes a glitch that arose from a corporate income tax law passed by the Legislature earlier this year, something a few legislators belatedly referred to as the infamous "unintended consequences."
Essentially, the law was designed to avoid a loss of state tax revenue by decoupling Florida's corporate income tax from the federal economic stimulus package, according to Kurt Wenner, director of tax research at Florida TaxWatch, a private state budget watchdog group. That would mean that corporations based in the state wouldn't be able to apply the federal tax breaks to their state taxes.
But the state law, as it was written and ultimately approved, would even eliminate the possibility that a Florida-based corporation could apply for a depreciation deduction on its state taxes. Enter the unintended consequences.
"The bill didn't allow for any adjustment," Wenner tells Coffee Talk, a situation that could have cost companies hundreds of millions of dollars, not to mention lost jobs and taxes for the state, according to a TaxWatch analysis. "The bill just wasn't thought out by all sides. The business community didn't catch it either."
The situation also begun to take on a sense of urgency, Wenner says, as Dec. 15 is normally a deadline day for many companies in preparing preliminary tax reports for 2009. That's why Wenner's group and some other lobbyists pressed for the special Cabinet Emergency Rule, as even if the Legislature meets for a special session early next year, it would be too late to fix this problem. Lisa Echeverri, the executive director of the state revenue department, endorsed the change as well.
The pleas worked. The emergency rule lasts 90 days, which takes it to March 9, a few weeks before the full 2009 session begins. Wenner says that gives the Legislators enough time to craft a new bill, without the language that caused the problems in the first place. It might also be rectified in the special session, if in fact there is one in January.
+ Online buying
creates more buzz
While Christmas sales have been modest so far this year, online shopping is generating a little more interest in 2008, if the experience of a Tampa chief executive is any barometer.
Whether it is consumers looking for electronic coupons, wanting to save time and gas, or just finding good deals, Kevin Hourigan, CEO of Tampa Web creator Bayshore Solutions, says business is way up this year in online marketing for the holidays. Bayshore creates or improves Web sites for companies.
"There's a lot of buzz in our market and in the world," Hourigan says.
Hourigan recently dropped off his wife on a Saturday at a Tampa mall to find most of the parking lot empty, with parking spaces open near the mall doors. The online market is more active, he says.
"In the online world, we do have clients investing in online advertising more than ever before," he says. "They are more aggressive."
Besides developing the Web promotions, more clients are coming to Bayshore for advice on marketing budgeting this year.
"They don't know where to spend the money," Hourigan says. "They are looking for us to help them, to get the best return on investment."
Although the Web-development industry is growing, Hourigan is concerned with some of his industry's clients.
"I wake up every morning with the fear that a lot of clients aren't growing," he says. "If you're clients are some banks, or furniture stores, or some retailers, they may be hurting."
+ Newspaper zoning change makes for more office space
Sarasota city commissioners have approved a controversial zoning change for the owners of the Sarasota Herald-Tribune building in downtown Sarasota, in a request Coffee Talk reported on in October.
The situation revolved around the dangers of a government entity providing taxpayer-based incentives to a private company in return for building something the government wants. In the case of the Herald-Tribune, which is owned by the New York Times Co., the city handed out $768,131 to the newspaper for it to build a multimillion dollar building in an underdeveloped block of Main Street in downtown Sarasota.
The newspaper had agreed to be the only tenant in the building, a stipulation for taking the money. But since the company now has 15,000 square feet of empty office space as a result of laying off almost 100 employees, it sought permission to lease the space to other tenants.
In a 3-2 decision, city commissioners sided with the newspaper earlier this month, granting the request. The newspaper will now forfeit a portion of the tax subsidy if it can lease out the space.
Of course, that's a big "if". Like most Gulf Coast downtowns, the downtown Sarasota office lease market is bleak. That's why a few downtown landlords spoke at a recent city commission meeting, asking the commissioners to deny the newspaper's request.
"We're paying real estate taxes to subsidize a publicly traded company based in New York," said George Spector, one of those landlords. "My vacancies are as high as they've ever been."
+ Commissioner Judah:
More than just the Red Sox
Ray Judah, chairman of the Lee County Commission, defended the commission's decision to build a new spring-training stadium for the Red Sox to a group of real estate executives recently.
In addition to the Red Sox, Judah envisions a sports complex that could include a new stadium for Florida Gulf Coast University when it develops a football program, as well swimming and cycling centers.
Don't worry about financing for the $80 million "mini-Fenway" stadium, Judah says. It turns out the county has that sum in one of its accounts, so it won't have to turn to the bond markets and pay an exorbitant interest rate.
Before you ask why the county has that kind of money laying around without a purpose, the tourism folks have agreed to turn over money from the bed-tax collections to finance the Sox project.
Judah says the location of the new stadium likely will be in Estero, near Florida Gulf Coast University. He said he expects landowners to donate the site to the county, who he says will benefit from the eventual development that will appear around it.
Pulte Homes in Tampa
offers English classes
The Tampa division of Pulte Homes, partnering with the National Association of Homebuilders, recently helped a framing subcontractor, G-Sus Construction in Plant City, by paying for instructions so 10 of its workers could learn better English skills.
It is considering extending the test program as a way to improve communication and help the careers of working people, says Scott Campbell, Pulte Homes' Tampa Division President.
"We went into it with our eyes wide open and we were generally pleased with our outcome," Campbell told Coffee Talk.
Tampa was a test market for Pulte nationally. Pulte's motivations for the English program include giving back to its trade partners, strengthening its relationships with them, becoming more efficient and building better quality homes.
"And they can better themselves from society's standpoint," Campbell says.
Like all homebuilders in Florida, Pulte has scaled back construction in Florida and trimmed its staff in the Tampa division from 225 to 50. It does not anticipate a big change in the local housing market in 2009. So it plans to work through its existing inventory. Pulte has about 70 homes in some stage of construction.
+ HMA Chairman
forgoes cash payment
Health Management Associates Chairman William Schoen says in a company filing he will forego all cash compensation in 2009.
There was no explanation for the move in the Naples-based hospital company's filing with the Securities and Exchange Commission and a company spokesman couldn't be reached. HMA's stock has fallen more than 65% this year to under $2 a share. HMA is the fifth largest company on the Gulf Coast with $4.4 billion in revenues in 2007.
According to HMA's most recent proxy filing, Schoen is paid $300,000 a year. However, it's not clear if he will continue to receive benefits such as $1 million a year from his pension, though he will continue to receive other perks. In 2007, these perks included: $19,950 for a car, $4,196 for health insurance and $9,600 for club membership, and $93,002 for the use of HMA's corporate airplane.
BY THE NUMBERS
Gulf Coast Airport Traffic for October
October October YTD YTD
Total Passengers 2007 2008 change 2007 2008 change
Tampa International 1,474,738 1,387,513 -5.91% 16,034,517 15,472,231 -3.51%
Southwest Florida Int. 537,606 492,258 -8.44% 6,709,267 6,309,441 -5.96%
Sarasota Bradenton Int. 106,365 93,986 -11.64% 1,302,735 1,285,285 -1.34%
St. Pete-Clearwater Int. 49,457 17,407 -64.80% 608,860 641,163 5.31%
TOTAL 2,168,166 1,991,164 -8.16% 24,655,379 23,708,120 -3.84%
October October YTD YTD
Cargo/Freight 2007 2008 change 2007 2008 change
Tampa International 17,988,969 18,003,122 0.08% 167,752,971 177,391,181 5.75%
Southwest Florida Int. 3,259,604 3,190,157 -2.13% 32,857,242 27,618,886 -15.94%
Sarasota Bradenton Int. 38,553 38,218 -0.87% 433,425 402,141 -7.22%
St. Pete-Clearwater Int. 5,569,752 3,496,253 -37.23% 50,191,404 36,144,432 -27.99%
TOTAL 26,856,878 24,727,750 -7.93% 251,235,042 241,556,640 -3.85%
Area job markets remain soft
No surprise here: The job market on the Gulf Coast will remain soft in the first quarter, according to the Manpower Employment Outlook Survey.
Two areas of the Gulf Coast are among the worst in the nation for their net employment outlook early in 2009. The Cape Coral-Fort Myers area is the sixth worst in the country and the Tampa-St. Petersburg-Clearwater area is the tenth worst in the country, the survey of companies says.
Throughout the Gulf Coast, declines in construction, manufacturing and business services will continue in the first quarter of 2009, the survey reports.
However, the Naples-Marco Island area is showing some signs of employment recovery, with 23% of employers interviewed in the survey indicating they plan to hire more people in the first quarter. Job prospects appear best in wholesale and retail trade and leisure and hospitality, indicating confidence that tourists and temporary residents will return this winter in healthy numbers.
Here are the results of the Manpower survey of companies and their hiring plans for the first quarter of 2009:
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