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SALES OF HOT TUB SPAS UNEXPECTEDLY REBOUND, DESPITE THE RECESSION

June 28, 2011
By Betty Carter
Poolandspa.com News
Las Vegas, NV USA

All you see everywhere nowadays is how bad the economy is....how bad Americans are doing...how terrible the housing market is...and how bad most retail sales are.  While most of that is still unfortunately true, a recent survey of hot tub spa manufactories across the USA and Canada reveal some striking new statistics.

The sales of "portable" hot tubs (or "spas") have started an uphill rebound, after posting three years of steep declines as the recession took hold of the world economy.  No one is exactly sure why hot tub sales have shown sharp increases in sales, but some point to the fact that many Americans have drastically cut their vacation budgets and are opting for so called "stay-cations", where they use a portion of their vacation budget and get a hot  tub instead.  Also mentioned by many was the fact that swimming pool sales are still showing very low sales volumes ever since 2007.

Because hot tubs can be moved relatively easily, consumers are not afraid that their home improvement may be lost if their house is sold or foreclosed on.  Swimming Pools, on the other hand (above ground styles and especially inground style pools) are home improvements that typically are left at the house, should the consumer have to move.

Consumers Feel More Comfortable With Hot Tub Purchases

The portable nature of hot tubs plus the overall lower cost, as compared to swimming pools, have made hot tub spas the outdoor home improvement of choice for many recession weary consumers.  "I'm not putting one cent into my house on anything that I cannot take with me" says Marie Voltura of Setauket, NY.  "My home mortgage is about 80% underwater right now, and I do not see that improving in the near future.  So we decided to get a hot tub to enjoy, knowing that we can always take it with us if we have to bail on the house."  We found that her comments and general feelings were repeated time and time again from homeowners all over the country.

"We lost our home to foreclosure a year ago, and now we are renting a much nicer and larger home for half the money" say Gerry Feingold of Los Angeles, California.  "The house we rented did not have a pool, and we certainly are not going to have one installed in a rental house.  That's why the hot tub made sense", he said of his recent spa purchase.  "Plus, there were so many sales going on for hot tubs, that we were able to get a much bigger sized model for the same price as a smaller one we looked at last year."

Brandy Quick of Artesian Spas, a Las Vegas based spa manufacturer, reports that "People are shopping smarter than ever before.  Consumers are thoroughly researching the products to ensure they are purchasing the best spa with the most features, all the while keeping within their budget.  Over the last year, spas that retail $6,000 and under are up significantly.  It’s become a huge piece of the market."  Courtney Salas of Cal Spas also notes that "Our company took the recession as an opportunity to solidify our product lineup and dealers. As a result, many of our products and dealers are flourishing during this difficult economic time."

Media Attention Has Helped

Widespread media coverage of shows like Jersey Shore, The Real World Las Vegas, and Big Brother, all featuring frequent hot tub usage by their cast members, have also given a big boost to the hot tub market.  "If it was not a recession right now, the hot tub market would probably be having its' best sales year ever" reports one Las Vegas hot tub salesman.  "Even with the recession though, I can't tell you how many people come in and say they want one of those "Jersey Shore" hot tubs !"

"Believe it or not, that stupid "Hot Tub Time Machine" movie created a lot of interest in hot tubs from people who were unfamiliar with concept of personal, home hot tubs" said a hot tub dealer in Phoenix, Arizona.  "I saw the movie (Hot Tub Time Machine) and thought that all hot tubs were those old-style wooden ones.  But the movie piqued my interest - they seemed like a lot of fun.  By the end of the following weekend, my wife and I had bought a Sundance Spa and we can't say enough about it" reports Joe Buffa from Destin, Florida.

Price cutting, rebates, coupons and county fair-type sales events held all over the country had also helped to boost 2010 sales.  The sales manager of Vita Spa recently noted that "The retail climate is improving.....with some areas (doing) better than others - (and) the overall feeling of desperation has subsided and companies are again finding ways to get in front of the consumer. Consumers are still conservative with their spending, but they are starting to spend. County Fairs, events and home shows seem to have made a rebound and sales volumes are exceeding the volumes of the previous year. Inventories remain relatively low both at the vendor and dealer level, so there is optimism for a steady and sustainable 2011 season."

Chris Piercy, another hot tub insider, reports that "The good news is that spas are starting to make a sales rebound. We are starting to see more footsteps in our retail stores, and those customers are really in the market to purchase something. (Although) our competition in the spa industry (has) decreased, we are still competing with other major ticket items like big screen TV’s and other recreational products. We know there is still a demand for the relaxation, health, and social benefits that are only found in a spa. (As) consumers start to feel more comfortable with the economy, they will be ready to make the (kind) purchase that will improve their lives forever...a spa."

He continues, saying that "Our current sales trends indicate that there are (more) higher end customers and not as many mid-line sales as we had in the past.  The higher end of our model sales are up.  On the lower end we are also starting to see more sales by people who were previously unable to buy due to the Recession.  We are encouraged by what we are currently seeing."

Some Manufacturers & Dealers Are Posting Best Sales Ever

One hot tub manufacturer, Bullfrog Spas of Utah, is actually on track to have one of their best sales years ever! "2009 was actually our second best year on record in terms of net profit. Sales were down a bit from 3 years ago but we were able to tighten up our belt and focus on what customers really want. Things are looking good for another very profitable year in 2011" says Jaden Kemp, their Director Of Sales & Marketing.

The Director of Sales for Dimension One Spas, John Lear, says that "We are excited. Our dealers are experiencing dramatically better sales this year and tell us that although customer traffic may be lighter than several years ago, the customers that visit their showrooms are more knowledgeable, looking for value, and are ready to purchase. Over the last 18-24 months, the landscape of the industry has changed radically. The dealers that are in business today are the strongest fundamentally, have built strong reputations for customer service, and are using their marketing dollars more effectively than ever. As many in the industry have reduced their marketing budgets, our strongest dealers have become more aggressive in their advertising and are seeing the fruits of their efforts. These dealers are experiencing year-over-year increases of well over 40%."

John continues, saying that "As a manufacturer, some of our best selling units are from our higher-end lines. Although what the newspaper says about the economy may suggest otherwise, customers are willing to pay for value and are steering away from the cheapest option. They demand the best, but have never been more willing to pay for it. One of our strongest dealers has sold 8 of our highest-end units over the last two weeks alone. We are experiencing significant increases in units and are encouraged by what we are seeing and hearing. The pie may have shrunk, but there are fewer aggressively pursuing it."

Product Innovation Is Helping Out Sales As Well

Innovation has also helped fuel the "new" hot tub industry, and many manufacturers are adding options like TV's, stereos, waterfalls and IPOD hookups.  One such manufacturer has even installed refrigerated cooling devices into their tubs in order to lure some of this "new group" of buyers.  Atera Anytemp Spas Director Of Sales & Marketing, Josh Reynolds says that "Most (of our) clients have previously owned a hot tub or pool and know (that) exclusive features and year round fun and health benefits are important to their family."  Atera Spas can be heated up like a regular hot tub, but can also be cooled down, which is very helpful in warmer climates, where hot tub water temperatures can easily match the air temperature - sometimes reaching over 110 degrees in the Southwest or Southeast regions of the USA.  The refrigerated cooling system helps keep the hot tub temperature within the safe range during the real hot summers. Additionally, for folks who do not have room for a swimming pool, these type of spas can actually be cooled to as low as 65 degrees, to give a refreshing pool-type experience, in the summer.

"We have been kept very busy during this tough economic time.  American homeowners are obviously willing to invest in their family's year round fun and health once they've learned about Atera Spas' long term benefits.  They (also) have the opportunity to purchase direct from the factory, saving (them) thousands of dollars", Reynolds reports.

Consumers Are Looking For Energy Efficient Hot Tubs Too

As the cost of energy is rising across the United States and Canada, savvy consumers are also looking for highly insulated hot tubs, but still want all the fancy "bells-and-whistles" that are available today.  Clearwater Spas of Woodinville, Washington, make a line a very high quality hot tub spas PLUS uses all the most energy efficient components and insulations, allowing consumers to have the best of both worlds.

Remember that "Eco-Friendly" does not necessarily have to mean sacrifice of lack of comfort. Ron Clearwater, Founder and CEO for Clearwater Spas reports that "You do not have to sacrifice comfort or fun with your spa, but you can choose an option that is more environmentally conscious from many spa manufacturers, including our brand, Clearwater Spas."

What is so special about eco-friendly options? From manufacturing to power use, they are quite special. When you select the right hot tub, you can, in fact, be helping the environment. Mr. Clearwater adds "When our company designs and creates our hot tubs, they keep two things in mind: your comfort and the environment. From the very beginning, staying green is kept in mind, and the manufacturing location for the spas is also important, as we do not produce environmental pollution with our shell EcoSpray process".  He also continues, saying that "At Clearwater Spas our floors of the spas are created from recycled ABS, and we even go so far as to recycle our own material waste, such as wood and plastic."

Getting an energy efficient hot tub is good for a number of reasons; the hot tubs are energy efficient in a number of different ways, they are environmentally friendly and they will also save you money in electricity. All Clearwater tubs are insulated from floor to cover, and the spas are made to maintain heat, avoid pollution and allows for protection from damaging insects.

The insulation used is made to buffer against cold air in order to maintain heat so that the heater system has to work less and will use less electricity. Getting a high quality spa cover also helps to protect the spa water from heat loss as well.

Mr. Clearwater also reports that "The spas designed and manufactured by Clearwater Spas now include a new technology called E-Smart, which guarantees that the hot tubs are energy efficient in all ways. Designed from recycled materials, including the best in insulation, our hot tubs will not only offer a green alternative, they will also cost you less money since they use much less of your energy resources."

Remember, going green does not have to be difficult. In fact, many people assume that, to protect the environment, they will have to make sacrifices, but this is no longer true. You can still enjoy the comfort, therapy and fun of a hot tub at your home while still helping to produce a better global environment.

Mr. Clearwater continues that "All Clearwater Spas are certified to pass the rules of the California Energy Commission (CEC) energy standards act, which is a strict set of rules about energy efficiency and environmental safety. There is no sense in missing out on the fun of a hot tub because you are worried about the environment. In fact, when your neighbors see your hot tub installation, they may quite possibly be green with envy!”

However, Some Companies ARe Still Having Problems

Although not all the news is so rosy for some hot tub manufacturers.  Many have gone bankrupt, gone out of business, have been bought out by larger companies, or have had to reorganize their business plans.  "There has certainly been a big shakeout over the past 3 years in this industry" reports one Florida spa dealer, George Carolla.  "The best and strongest brands are the one that will survive this economic downturn."

"Some of the (previously) bigger companies, that had undergone tremendous expansions during the first half of the decade, have become financially unstable, and may not make it through the year" says one hot tub industry insider.

"I have seen some of the largest companies make the biggest marketing mistakes over the past year - those that even a first year college student majoring in business wouldn't make" says Ethan Johnson of Poolandspa.com's Marketing Department.  "I mean, if you have a huge company, with huge overhead, and you see all of these smaller companies biting at your feet, moving products and eating up your market share, why would you slash your marketing budgets, and shut down previously high performing dealerships?  It makes absolutely no sense."

"Clearly the companies that had adopted the "hunker down" mentality about a year ago - including cutting back on dealerships, slashing advertising dollars, and laying off key employees - are the ones that did the worst in 2010" reports Janice Beckman, head of the accounting department for Poolandspa.com.  "You pretty much hear the same story again and again - the companies that are forward-thinking in this type of economy are coming out the winners.  Those that have "hunkered-down" are the ones that are suffering, sales wise, and are most likely the ones that will not be around next year" she adds.

Forward-Thinkers Come Out On Top

One of those "forward-thinking" companies is Premium Leisure Spas of Florida.  "Premium Leisure made a concerted effort to double down and invest in key business strategies in 2009," said Premium Leisure President Brian Wiley. "The 2010 results speak volumes. We engineered and launched eight brand new hot tubs that comprise two fresh, patent-pending lineups: Leisure's Edge and Pinnacle Plus. Because these spas boast never-before-seen design elements and more than 30 standard features that consumers want, we are up 63 percent year over year."

"It is no secret that the spa industry is moving again and sales are increasing.  Even though this is true, it would be better (for everyone) if the economy as a whole was recovering at a faster pace" says one industry executive.  "Everyone wants to be at the top of the crest when the economy fully recovers, and all the smart ones know that NOW is the moment to take action."

Dan Jung of Northern Lights Cedar Tubs in Canada echoes those sentiments.  "We have found that diversifying our product line has helped us greatly in this recession, our new Ofuro Hot Tubs are designed for two people which is surprisingly something we have found a good market for. (Also) offering wood fired and solar heating alternatives appeal to those with a green thumb and customers who are afraid of high operating costs associated with gas or electric hot tubs" he says.

Speaking of Canada, many Canadian-based hot tub manufacturers are reporting even more robust sales than those in the USA.  "Business has been good this year, a definite improvement over last year. The USA is still having (some) difficulty. I still think there’s more (good news) to come in our industry over this next year" mentions Lyndon Throness, Beachcomber Hot Tubs' Director Of Marketing. Coast Spas, another popular Canadian-based spa manufacturer reports the same upward trend.  "Our sales are actually up 19 % this year overall. This increase could be due to our long term stable dealers. What we do see are the results of our vanishing edge spa line, which has given all Coast Dealers the ability to sell the ultimate in quality and innovation. Coast Spas continues to be different so that Coast Dealers have continued success" says their spokesman Mike Murphy.

Swim Spa Market Also Expanding

Swim Spas are also seeing an unexpected surge in sales this year.  "We all take our health for granted, until it's gone. Even in an economic downturn this sentiment is not lost on our Customers, making (Swim Spas) more compelling (than ever) for their fitness benefits, versatility, and ease of use, year-round", says Daniel Fraley of Endless Pools.

Dan Ried, from Hawkeye Spas has been having a lot of luck this year with their new line of Swim Spas as well.  "We had increased traffic to our web site when Poolandspa.com included our new Barefoot Bossetti Swim Spa in the Top 10 Swim Spas list (this year)", he said.  "As a manufacturer that sells direct to the consumer, we have a unique opportunity to gauge the market. Over the last several months, we have seen a tremendous improvement in both foot traffic that comes through the door, and traffic to our website. We feel as a whole, consumers are back in buying mode and they are taking advantage of market rebound incentives throughout our industry." 

Ried continues, "We have seen exponential growth, not only in portable spa sales for luxury and relaxation, but also in Fitness Spas and Swim Spas for health, therapy and overall well-being. We are looking forward to a successful year in 2011 and expect that over the next several years, sales will continue to improve."

Hot Tub Survey Helps Gauge Consumer Interest

To see what many consumers were saying about hot tubs, Poolandspa.com commissioned an online survey to find out all aspects of hot tub ownership in today's marketplace called What Americans Really Want In Hot Tubs. The results of the year long survey covering both hot tub ownership and hot tub shopping are now available online.  Although the survey results were originally geared to be shown only to hot tub manufacturers and/or spa dealers, Poolandspa.com is now opening up the complete survey results to consumers and hot tub shoppers.  They also have include a video narrative, explaining some of the results.

"Generally, we were very surprised at the overall positive nature of the survey results" reports Poolandspa.com's Dan Harrison, an industry veteran of over three decades.  "The quality of hot tubs has so drastically improved over the past 10 years, that most hot tub owners have a very positive experience, both during the shopping process and as end-users.  The caliber of the dealerships and the aftermarket support from the manufacturers has absolutely had a lot to do with the recent up-tick in sales.  Everyone in this industry (dealers & manufacturers) are "hungry", so they go out of their way to make sure that the consumer is happy with the tub they purchase.  This certainly was not the case when I first got into this industry 30 years ago !" he notes.

Maybe This Is The "New Beginning"

After the World Trade Center Tragedy in September of 2001, most industries nationwide suffered quite a lock-up in sales.  Travel and vacationing came to a crawl and a lot of consumer spending dipped, as the fear and uncertainty of the future loomed over everyone's heads in America.  But a little known fact to many people is that hot tub sales surged soon thereafter.  Actually, the Fall of 2001 started the tremendous growth trend that fueled the hot tub industry, and launched it from a small facet of the Swimming Pool Industry into an entire industry in its' own right.  2002 through 2007 saw exponential growth in the Hot Tub Industry, producing tens of thousands of jobs and creating a multi-billion dollar industry segment, where before it was hardly a blip on the radar screen.

Who knows ?  Maybe 2011 will be the "New Beginning" for the hot tub industry.  When the final history of this time period is written, this tragic economic recession may actually end up having been a good thing for the hot tub industry.  There was a painful shake-out of the weaker companies, and the strong ones have, and will always, survive.  From a consumer's point of view, this is great news - better hot tub products from stronger companies at better prices.  And for the hot tub dealers and manufacturers who have weathered the storm, this may be the final light at the end of the recessionary tunnel they have endured for almost three long years. Only time will tell.

Related Links:

Go To Back To The Online Newsletter Page

Go To The Hot Tub Spa Buyer's Guide & Manufacturer's Links

Go To The Swim Spas & Swimming Pool Buyers Guide & Manufacturer's Links

"What Americans Really Want In Hot Tubs" - Survey Results

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