TERMITE MARKET REPORT - 2023 State of
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SPONSORED CONTENT
2023 State of the
TERMITE
MARKET REPORT
>> Average Swarms, Call Volumes
>> Warranties + Renewals = Retention
>> More Treatment Approaches Were Better
>> Revenue Solid But Slowing?
Sponsored by >> Higher Revenue, Recession Worries
>> Exclusive Research!
2023 State of the SPONSORED CONTENT
TERMITE
MARKET REPORT
Termite Control:
CRITICAL TO THE INDUSTRY’S SUCCESS
W
ow! What a ride it’s been. When we take some time to reflect on the past few years, it’s easy
to see all that we as an industry have overcome. Being declared an essential service? Check.
Growing through the pandemic? Check. Becoming more flexible and nimble pest management
providers as our customers required new types of services? Check. Figuring out new ways to
address our supply chain issues on both the PMP and supplier side? Check. But what’s next? No one
knows for sure but inflation, a tentative economy and continued issues with employee recruitment and
retention seem to be at the top of the list.
No matter what comes our way, the pest management industry and its
owner/operators are known for their resourcefulness and resiliency, able to
power through the most challenging of times. PMPs (and suppliers) need
to continue to think about how to best solve their customers’ problems,
ensuring the right mix of products is always at the ready, but always with
an eye on the future.
And speaking of the future, it looks bright for the termite control market.
According to the data in this 2023 State of the Termite Market report, 56
percent of PMPs said they anticipate the percentage of their location’s revenue
generated from its termite control services in 2023 to increase. That’s great
news for the marketplace!
The crucial information on the following pages is important for PMPs to
compare their businesses to, and to understand what others in the market
are doing to respond to industry changes, challenges and opportunities. This
report, which BASF is proud to have sponsored since 2017, shares insights
from the people who matter the most — your peers.
At BASF, we’re always trying to learn more about the market overall, but it’s also so important for
us to understand your individual business needs as well. By digging more deeply into the details of
the termite industry, it helps your sales representatives understand the subtleties of the market and the
opportunities and challenges our customers — like you — are experiencing.
Our goal is to help you solve termite control problems for your customers through our industry-leading
termiticides that include technologically advanced injection, monitoring and baiting systems. No matter
what type of termite control product you prefer, BASF has the product for your toolbox.
From our baits — Trelona® ATBS Annual Bait Stations and Advance® Termite Bait Stations for
monitoring — to our liquids, including Termidor® HE High-Efficiency Termiticide and Termidor
SC Termiticide/Insecticide, our products are backed by a dedicated team of experts who can answer
your questions, provide resources or training — whatever you need to be successful and to ensure your
customers’ satisfaction.
Thank you for the work you do each day to move our industry forward by protecting properties from
termites. Remember that BASF is here to assist you and your company in any way we can!
Joe Schuh, Ph.D.
Head of Technical Service
BASF Professional & Specialty Solutions
2 State of the Termite Market Sponsored by
2023 State of the
TERMITE
Average MARKET REPORT
Swarms,
Call EVEN STEVEN
Volumes
How would you characterize the
2022 termite swarm season in
the area in which your location
provides services?
A
7%
nearly equal number of PMPs said years ago and a lot of those trees that
the volume of termite-related ser- were heavily infested with termites blew above
vice calls last year either increased over and that material was then hauled 39% average
average
53%
(36 percent) or remained the same off, burned or whatever,” said Blaine Ce-
(37 percent) from 2021, found the 2023 lestaine, owner, Abatol Al’s Pest Control, below
average
PCT State of Termite Market survey, Lake Charles, La.
which was sponsored by BASF and con- “We haven’t had the big banner For-
Source: Readex Research; Respondents: 243
ducted by Readex Research. mosan termite swarms because of that,”
Termite swarms, alone, did not make said Celestaine, who expected it to take
the phone ring or text ding. Most PMPs several years for termite populations to re- Does your service location offer
(53 percent) said the 2022 termite swarm bound to pre-storm levels. He experienced termite control services?
season was average; 39 percent said it was a similar cycle after Hurricanes Katrina
below average, up 10 percent from 2021. and Rita hit the area in 2005.
“Termite swarms, you hear this While termites remain a major problem
throughout the industry, aren’t what they in his market, sales are driven by the For-
used to be,” said Henry B. Fernandez Jr., mosan termite swarms that occur in May. 76% 24%
president and manager of Asash Termite “If the swarm is not bad, it’s not going to Source: Readex Research; Respondents: 321
& Pest Control, Laredo, Texas. motivate nearly as many calls,” he said.
Termite activity — and demand for In addition to Formosan termites, Ce-
termite service — relied in part on warm
temperatures, adequate moisture and calm
winds. Only 26 percent said conducive
weather in their markets last year increased
lestaine controls native subterranean ter-
mites and, on occasion, drywood termites.
Nineteen percent said it is common in
their markets to find more than one ter-
1.8%
average callback rate for termite
demand for their termite control services. mite species infesting a structure; 14 per- control services
Severe weather events took a toll. “We cent said they were encountering/treating
26%
had two hurricanes back-to-back two more Formosan termite infestations.
SLOW BUT STEADY PMPs who agreed that conducive
Compared with one year ago, have termite-related service calls at your weather in their markets increased
location increased, decreased or remained the same? demand for their termite control
increased significantly 7% services.
increased somewhat 29%
remained the same
decreased somewhat
decreased significantly 9%
17%
37%
19%
PMPs who agreed it is common in
their markets to find more than one
cannot compare; not involved one year ago 1% termite species infesting a structure.
Source: Readex Research; Respondents: 243 Source: Readex Research; Respondents: 243
Sponsored by State of the Termite Market 3
2023 State of the
TERMITE
MARKET REPORT
Warranties + Renewals = Retention
I
n follow-up interviews, PMPs said major damage occurs. In 2022, termite 10 years. It’s a lower annual payment.
Andrey Popov | AdobeStock
their companies sought ways to boost renewal fees on average accounted for So far, it seems to be working for us,”
recurring termite revenue and retain 17.3 percent of termite control revenue said Hill.
termite customers. per company location, found the PCT Drake’s warranty covers damage from
One way they did this was by offering survey. Eastern, Formosan and Asian subterra-
a termite damage warranty, reported 31 As part of its warranty program, nean termite species. The company also
percent of PMPs in the 2023 State of the Drake Lawn & Pest Control retreats offers an add-on protection program for
Termite Market survey. homes with liquid termiticide every drywood termites for about $400. This
In Orlando, Fla., Drake Lawn & Pest 10 years at no extra cost. The annual has helped boost termite revenue and
Control offered to cover up to $1 mil- renewal fees make this possible. make customers “stickier.”
lion in termite damage for the life of the “We’re taking some of the money over “I would say the majority of our sub-
home, including transfer of ownership. the course of 10 years and applying it terranean sales have included drywood
Damage warranties typically require to our cost of doing the treatment every sales on top of it,” said Hill.
customers to pay an annual renewal fee; 10 years,” explained Brandon Hill, the The average customer retention rate
this allows PMPs to inspect the home company’s president. for termite control customers over the
yearly for termite activity and conducive Customers have embraced the pro- past five years was 75.9 percent, found
conditions, so fixes can be made before gram. “They don’t have a large bill every the PCT survey.
ONE-THIRD OFFER WARRANTIES
Does your location offer a termite damage warranty?
$ 17.3%
Average percentage of termite
control revenue derived from
31% termite renewal fees per location
in 2022
75.9%
yes
69%
no Average customer retention rate
for termite control services
over the past five years
Source: Readex Research; Respondents: 243
4 State of the Termite Market Sponsored by
2023 State of the
TERMITE
More Treatment MARKET REPORT
Approaches were Better
B
ecause every job
was different, LOTS OF SERVICES
PMPs said they What types of termite control services does your
needed an array location offer?
of products, equipment,
services and treatments to
post-construction termite treatments 91%
inspections/reports for real estate
successfully control termites. transactions 86%
Arizona Termite Specialists in termite renewals (re-inspection for
Glendale, Ariz., only does termite control, so having the right tools an annual fee)
81%
and training is essential. “That’s all we focus on, so you’ve got to pre-construction termite treatments 72%
do things right,” said Owner Jeremy Youngquist.
Post-construction termite treatments were the most offered
borate wood treatments 64%
inspection or “monitoring only”
service, reported 91 percent of PMPs in the 2023 PCT State of the services 46%
Termite Market survey. Second most common was inspections/
reports for real estate transactions (86 percent).
termite exclusion services 16%
Due to the demanding nature of real estate work, Brad Dutoit fumigation services 13%
tries to avoid it. “I’ll do some real estate work. I used to do a lot, but I
got tired of dealing with Realtors. They want you to drop everything
other 7%
and do what they need done and I don’t cut my other customers Source: Readex Research; Respondents: 243; Respondents could
for that,” said the owner of Jones Pest Control, Billings, Mo. select multiple answers
Termite renewals/re-inspections for an annual fee were per-
formed by 81 percent of pest control companies; pre-construction
termite treatments by 72 percent. ‘BOTH’ USED FREQUENTLY
Healthy Home Termite & Pest Control, Acworth, Ga., does Does your location offer baits, liquids or both as
not perform pre-treat work. “Builders really don’t want to pay part of its termite control service?
2%
what needs to be paid so we’ve just never fooled with them,” said
liquids only
President Patrick Carter.
baits only
Borate wood treatments were offered by 64 percent of pest con- 33%
both baits and liquids
trol companies, including Abatol Al’s Pest Control, Lake Charles,
other
La. “Massive damage” from termites could be prevented if new-
construction homes in termite-prone areas were treated with bo-
62% Source: Readex Research;
4% Respondents: 243
rates, said Owner Blaine Celestaine. He added that the he thinks bo-
rates are a more environmentally friendly treatment option as well.
Most pest management professionals (62 percent) said their
locations used both liquid termiticide and termite bait systems GAME-TIME DECISION
to control the pests, but liquid termiticide (50 percent) was the When conducting a termite inspection, if
primary product used. Some PMPs in follow-up interviews said technicians encounter a home with spray foam
their companies used high-precision machines to inject liquid insulation do they provide service or walk away?
4%
termiticide into the soil.
When spray polyurethane foam (SPF) insulation was present in
structures, termite control providers faced additional challenges. 28% provide service
Over the past five years, 54 percent of PMPs said they encountered walk away
SPF with some frequency while doing termite inspections, found depends on the
the survey. Most (62 percent) said technicians evaluated these
situations on a case-by-case basis whether to perform service or
62% 8% situation
no answer
walk away from the job.
Training related to SPF remains essential for effective termite
control, said PMPs. Source: Readex Research; Respondents: 243
Sponsored by State of the Termite Market 5
2023 State of the
TERMITE
MARKET REPORT
Revenue Solid
but Slowing?
25%
T
Average percentage of 2022 revenue
ermite control had a respectable and control services, reported 50 percent derived from termite control services
year in 2022. On average, it gen- of PMPs. per location.
erated 25 percent of revenue — or As the year progressed, however,
$344,000 — per company service interest rates skyrocketed, bringing the
$344,000
location, according to the 2023 PCT housing market to a standstill. In fact, 30
State of the Termite Market survey. percent of PMPs said high interest rates
The termite business at Asash Termite and a tighter housing market decreased
& Pest Control in Laredo, Texas, was demand for their termite control services. Average revenue generated in 2022
doing “superbly,” said President Henry Bowman Termite & Pest Manage- from termite-related services per
B. Fernandez Jr., in late October. “My ment — among the 86 percent of pest location.
termite sales are roughly 18 to 20 percent control companies that performed
of my gross volume sales. I’m always very termite inspections and reports for real
positive as far as growth is concerned,”
he said.
The percentage of revenue generated
estate transactions — felt the impact.
The Wailuku, Hawaii-based company
performed 1,000 fewer inspections in
50%
PMPs who agreed the hot real
from termite control services increased 2022 than the year prior.
estate/refinancing market increased
somewhat or significantly in the past “The market has really slowed to halt demand for termite inspection and
three years, reported 53 percent of pest here as far as home sales and condomini- control services.
management professionals in the survey. um sales and land sales. The numbers
Nearly one-third (32 percent) said ter- show that,” said President Wakon
mite control in 2022 was more significant
to the company’s bottom line than five
years ago.
Revenue growth was helped by a
Childers.
According to the PCT survey, 18 per-
cent of pest management professionals
said termite revenue decreased last year,
30%
PMPs who agreed the tight
hot housing and re-fi market, which up from 10 percent who reported a de- housing market/high interest rates
decreased demand for termite
increased demand for termite inspection crease in 2021.
control services.
Source: Readex Research;
Respondents: 243
SLIGHT INCREASE
In the past three years, how has the percentage of your location’s
revenue generated from its termite control services changed?
2%
4% 3%
increased significantly
11%
increased somewhat
14% remained the same
decreased somewhat
decreased significantly
24% 42% cannot compare; not involved three years ago
no answer
Source: Readex Research; Respondents: 243
6 State of the Termite Market Sponsored by
2023 State of the
TERMITE
MARKET REPORT
Higher Revenue,
Recession Worries
A
ccording to the 2023 PCT State work is big-ticket items; they’re $4,000,
of the Termite Market survey, $5,000 fumigations. Big-ticket items tend
most PMPs (56 percent) expected to get hit during a recession,” he said.
termite revenue to increase some- In fact, fewer PMPs were forecasting
what or significantly in 2023. termite revenue to increase this year
This was especially true for those in compared to last year (56 percent vs.
fast-growing markets. “Fortunately, in 64 percent).
Florida, we’ve been going pretty good Pest management professionals were
economically. There’s been tons of peo-
ple moving into the state and tons of new
less worried about getting the materials
they needed to perform termite work.
21%
ronniechua | AdobeStock
homes being built,” said Brandon Hill, Only 21 percent said supply chain issues
PMPs who agreed supply chain
president, Drake Lawn & Pest Control, affected the availability of some termite
issues affected the availability of
Orlando. control products and services. And only
some termite control products
Rising economic uncertainty, howev- 16 percent said the COVID-19 pan- and services.
er, was having an impact. Patrick Carter, demic continued to impact demand for Source: Readex Research;
president of Healthy Home Termite & termite control services. Respondents: 243
Pest Control, Acworth, Ga., said high The biggest challenge was the labor
inflation, interest rates and fuel prices shortage.
had customers bracing for recession and
adjusting their spending patterns. His
“I have a very difficult time getting
manpower for termite fumigation and 16% PMPs who agreed the COVID-19
pandemic continues to impact
demand for termite control services.
termite sales were down slightly in 2022. pest control. Manpower is what’s really
“People aren’t spending money on impeding our growth. I can’t sell more Source: Readex Research; Respondents: 243
the big-ticket items right now. I think than I can do. I can’t even advertise
consumers need to be more at ease for more than I can do,” said Childers, About the Survey
about what’s going to happen” with the who had a four-month backlog for tent The 2023 PCT State of the Termite
economy before making large purchase fumigation work. Market survey was sponsored by
decisions, he said. He worried a worsening economy BASF and compiled by Readex
Wakon Childers, president, Bowman might cause customers to back out of Research, an independent research
Termite & Pest Management, Wailuku, contracts before he could get service firm in Stillwater, Minn. A sample of
Hawaii, agreed. “Most of our termite completed. 8,528 pest control company owners,
executives and technical directors
was systematically selected from
LESS OPTIMISTIC ON GROWTH the PCT database. Data was col-
How do you anticipate the percentage of your location’s revenue generated lected from 321 respondents — a 4
from its termite control services to change from... percent response rate — via online
survey from Nov. 8-23, 2022. To best
2022 to 2023? 2021 to 2022? represent the audience of interest, a
increase significantly 9% 12% majority of results are based on the
increase somewhat 47% 52% 243 respondents whose location
remain the same 33% 27% offers such services. The margin of
error based on the 243 respondents
decrease somewhat 8% 6%
is plus or minus 6.2 percentage
decrease significantly 1% 2% points at the 95 percent confidence
no answer 1% 2% level. Charts may not add up to 100
percent due to rounding.
Source: Readex Research; Respondents in 2022: 243
Sponsored by State of the Termite Market 7
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