The one word that could neatly sum up what Gulf Coast business owners and entrepreneurs would like to see in the economy in 2017 is a soothing one: balance.
travel and tourism
Founder and CEO | Twenty/Twenty Worldwide Hospitality, Naples
Company: Hirschovits will likely add a few properties to his hospitality management and consulting firm's portfolio in 2017. He closed out 2016 discussing potential management opportunities and new-build possibilities in Florida and North Carolina.
He predicts nominal growth for his Naples-based firm, based on the stability of the Research Triangle market where he manages North Carolina hotels and the improved hotel sector in Southwest Florida after several tough post-recession years. “I think 2017 is going to be very minor growth,” he says. “Some places are going to see that in occupancy, and for some places it might be in the average daily room rate.”
Industry: Hirschovits has seen rental services like Airbnb creeping into the smaller markets he works in and expects that to continue, putting more pressure on hoteliers to fill rooms. He saw that in the Naples area last March, when high airline passenger numbers in the region didn't translate to more hotel rooms sold. “Occupancy didn't go up, but private rentals in Naples went crazy,” he says.
He's also starting to get cold calls from brokers about his hotels. “I did not get calls from brokers asking me about selling hotels for several years,” he says. “That means they're running out of product to turn.”
Region: Hirschovits has his eye on Sarasota, where a lot of new hotel rooms will be coming online, to see how occupancy rates fare. He predicts slight growth in Southwest Florida, especially once the dust settles from the presidential election.
He hopes that things like hurricanes or water-quality concerns don't get overblown in the media and impact tourism numbers. Travelers from outside the state and country can easily perceive smaller, regional issues as being problems for the entire state. “It can cancel trips, how the press presents the information,” he says. “It needs to be more specific.”
— Beth Luberecki
Chairwoman and CEO | Preferred Community Bank, Fort Myers
Company: O'Neil has a positive outlook for 2017. Preferred Community Bank, with branches in Fort Myers, Lehigh Acres and Cape Coral, works primarily with consumer and small-business customers. It's already benefited from the robust local residential real estate market, and O'Neil expects to see more small-business growth next year. The bank had $111 million in assets through June 30, according to Federal Deposit Insurance Corp. data.
“Election years seem to put hesitancy in growth, and we've seen people be more conservative since coming out of the recession, which is probably a good thing,” she says. “We're very optimistic for next year and are adding staff to accommodate growth. There are just a few community banks left in our region, and I think we've got some very good prospects going into next year.”
Industry: O'Neil is hopeful that 2017 brings regulatory relief from the burden she says the Dodd-Frank Act has put on community banks. “It's actually hampered growth in community banks, because a small community bank can have the same reporting requirements as a multibillion-dollar bank,” she says. “The size of the bank should dictate what's required. One size fits all is not a good thing. I'm very optimistic that next year we might see some changes.”
O'Neil says the compression community banking has undergone in recent years, with the number of community banks in the country dwindling, has restricted small-business growth. “Small banks provide 50% of the loans to small business, even though there are only about 5,600 of us nationally,” she says.
Region: “For our region, I would say we're doing better than nationally,” says O'Neil. “The housing and construction trade has come roaring back, which is good to see as long as we're cautious about it. We're seeing a lot of folks coming down and buying second homes. That's very rewarding, since we didn't see that for about a three-year span.”
She expects to see more small-business growth locally in 2017. “In this area, residential real estate growth leads small business growth and expansion by about two to three years,” she says. “So now it's time to move forward again in a normalized way. I don't want to see huge growth. I want to see slow, steady growth. That works for everyone.”
— Beth Luberecki
Chief administrative officer | Lee Physician Group, Fort Myers
Company: A key to success in seeing more patients and generating better outcomes within the medical group, says Fay, lies in having more personnel. That's why the group, a unit of Lee Health and already one of the largest multidiscipline medical practices in the region, with 1,500 employees, is in an ambitious three-year recruiting mission.
About 550 people from the employee base are doctors or nurse practitioners, including 100 hired this year. The group plans to add up to 40 physicians in 2017, targeting such specialties as neurology and gastroenterology. “In our community, historically you've had to wait very long to see a physician,” says Fay. “We've spent considerable time, energy and resources to cut down that time.”
The organization also plans to invest more resources in its state-of-the-art electronic medical records system, in addition to new practice areas.
Industry: The uncertainty of what will happen to the Affordable Health Care Act lingers for Lee Physician Group and virtually every other medical practice. But even before that became an issue with Donald Trump's election, many large medical groups already were working hard on staying ahead of future trends, says Fay. That includes new uses for telemedicine and new ways to use software and mobile health apps to connect medical personnel with patients. “The challenge is to design medical care of the future while working with the patient of today,” Fay says.
Another trend to watch for in 2017, says Fay: More patients, fueled by higher deductibles, will demand better value and more transparency in pricing.
Region: It seems like the roads of Southwest Florida get more congested earlier in the fall and later into spring every tourist season, says Fay. That means more snowbirds spending more money, which she considers a positive development — if infrastructure can meet the increase. “People used to say it was season or not season, really busy or not too busy,” says Fay. “That seems to be changing.”
— Mark Gordon
Retail, athletic apparel
Co-owner | The Foot Landing
Company: The increased interest in health and wellness and an active lifestyle has been a boost for the Foot Landing, which Lennon opened with her husband, Ralph Lennon, in 2012. Sales were up in 2016, and Lennon projects sales will rise again next year. One key is she has promoted and invested resources into marketing the store's recent add-ons, which include a juice bar, nutrition center and sneaker informational clinic. “I'm excited about next year,” says Sherri Lennon, who worked in radiology for 17 years before going into independent retail.
Industry: The biggest and constant threat to independent retailers, says Lennon, is Amazon. Online tax rules, for one, gave the giant Internet retailer a competitive advantage for years, says Lennon. But even worse, she says, is the growing trend of people who use stores such as the Foot Landing to gather information, then go home and shop online. “Amazon is the worst thing to happen to us,” says Lennon. “(Customers) want to use our specialty as a dressing room.” Lennon says some non-customers not only come in and try on multiple pairs of shoes without making a purchase, but they also snap smartphone pictures and do research right there in the showroom. “It's a really big problem,” she says.
Region: The Punta Gorda area — both to the good and bad, says Lennon — is losing its “best kept secret” status. The Charlotte County waterfront town, says Lennon, “has become a really desirable” place to live that's close but not too close to either Sarasota or Fort Myers. So more development, she says, means more and better businesses, which is a good thing. But she also realizes this is Florida, where growth plans often outpace infrastructure and other needs. So many people Lennon knows are cautious about growing too much, too fast. Says Lennon: “We want to remain a quaint little town.”
Commercial real estate
Principal | Steelbridge Capital Corp.
Company: Caplan, whose firm has owned office buildings from Clearwater to Naples, believes Steelbridge could embark on significant acquisition activity in the coming year. Like many firms, Steelbridge took a bit of a “pause” in 2016 to reflect on market conditions and digest and stabilize previous purchases, prompted by a recognition that the Gulf Coast's economic rebound was in the sixth of what is typically a seven-year cycle. The recently concluded presidential election and concerns about the future of interest rates also caused many real estate investors to wait on the sidelines. “There's been de minimis new construction of suburban office buildings during this cycle, which is what we buy,” he says. “We see that as favorable for us.”
Industry: Florida continues to have job and population growth and maintain its low tax status, which Caplan believes bodes well for commercial real estate in the coming year. And because there's been a general lack of new construction of suburban office product, business growth has pushed demand to existing properties. “We think the sector looks good, and we think the industry is poised to continue to grow,” he says. “It may not grow as much as it has the past three-to-five years, but there will be growth. I think the horizon is overall very solid.”
Region: Because the region is likely to grow from both a population and jobs standpoint, Caplan foresees a “domino effect” that will boost retail offerings, industrial properties, the apartment sector and self-storage facilities — as well as office space. “It sounds cliche, but the Florida story is one of low taxes, a good quality of life and relatively affordable housing opportunities as compared with some parts of the country,” he says. Infrastructure issues will be a challenge going forward, Caplan contends, especially in areas such as Tampa, Orlando, the Interstate 4 corridor, and to a lesser degree in Naples and Sarasota. Says Caplan: “It's the side effect of growth that one can't avoid.”
— Kevin McQuaid