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 !"

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%."

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.

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.