In a lot of ways, the spa industry seems to be moving in slow motion.
Demand is still high, experts say, especially with the pandemic continuing to drag on. With lockdowns at least temporarily lifted, showrooms are mostly open, with some offering both walk-in and virtual appointments, or walk-in by appointment only.
Sarah Sperrin, owner of Hot Water LeisureScapes Pools & Spas, Inc., in Canada, says its showrooms are slowly but surely beginning to fill with hot tubs again. Swim spas are still heavily backlogged in manufacturing, she adds, but “it is wonderful to take delivery and unwrap fresh acrylic and rotomold hot tubs again.”
AJ Gallagher, vice president of operations at Viking Spas in Grand Rapids, Michigan, says retailers’ showrooms are busy, but that they’re always waiting on more spas to sell. “The smart retailers are bolting spas to the floor and selling off future orders that may be months down the road,” Gallagher says. “It’s a lot tougher to sell off a brochure something the consumer may not receive for six to eight months.”
In Canada’s retail market, Sperrin says, many dealers are keeping flagship models in their showrooms, not releasing them for sale until a replacement arrives so there are hot tubs customers can see and touch during the selection and ordering process.
For Carl Chrismon, general manager of Unique Pools, Spas, & Billiards in Florida, every month is better than the month before, but he says he has struggled to keep his sales floor from looking too empty. Chrismon says carrying a variety of brands across his three showrooms, including swim spas, has made the supply-chain pain bearable and that he feels fortunate, but that it’s still not easy to keep up. “We’ll get a truck in and replenish our floor,” he says, “and then two weeks later it seems to be bare again. We’re trying to encourage customers not to take things as quick as they can.” He says the swim spas are likewise hard to keep in stock.
At California-based Blackthorne Spas, owned by Malina Breaux, business has never been better. Breaux says the service side of her business has seen a customer increase from 175 to 250 accounts. Her employees work between 50 to 60 hours weekly.
“I’ve never had this much money in the bank and this much growth in a year,” Breaux says. “It’s challenging, but it’s amazing.”
The hardest part, Breaux says, is serving the huge increase in customers and keeping products on the shelf. Like other retailers, she can never promise when products will be in her store for customers to pick up. It’s frustrating, she says, but it’s the state of the industry.
In addition to the hurdles of getting products in stock, hiring quality people is another struggle the spa industry has faced of late.
“Our biggest struggle besides parts is labor,” explains Breaux. “I could hire four more people, if I could hire four more people.” She says service techs have been the hardest to come by, since the service business is incredibly busy at the moment, and “having people who know anything about servicing spas and pools is rare.”
It takes about three weeks for her to train techs and get them ready to tackle routes alone. That’s precious time, and she and her senior staff don’t have enough hours in a day to pull it off, she says.
Chrismon is having a similar experience. Before the pandemic, he hired techs on the fly because he could easily interview them on the spot. Now, with mandatory appointments for guaranteed showroom access, it’s not as easy. The applications aren’t flooding in, but orders are.
“We transitioned to appointment only to minimize the chaos of the crowds in the store,” he says. “We’re fortunate enough we didn’t have to shut our doors, [but] some months were scarce.”
Aside from a massive increase in profits, the pandemic has also highlighted the importance of what spa professionals do, Breaux says, meaning it made the industry realize they could charge more for the products and specialized services they offer.
And in another unexpected twist, the physical lack of large hot tubs in showrooms has led retailers to add ancillary items customers may be interested in purchasing.
“We’ve filled [our showroom] with stuff,” Breaux says. She has increased her supply of spa steps, saunas, cover lifters and massage chairs “to take up space,” she says, and has rows and rows of chemicals.
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In previous years, Breaux never had more than two massage chairs on display. Now she’s brought a few more in hopes customers will discover a new luxury self-care item they never would have thought to try.
Patience, Patience, Patience
While retailers understand that manufacturers are struggling with sourcing raw materials due to lockdowns, the pressure of excessive orders and unforeseen delays continues to bare down on hot tub retailers.
Gallagher from Viking Spas says business is booming and that new business is there for the taking, but recognizes delays can be trying. He says operations challenges are constant and mainly twofold: staffing and sourcing raw materials from vendors.
But, he adds, vendors are remedying it as best they can in a high-demand operations field.
“We see progress from our vendors as they take steps to be able to handle the increased demand for their products,” Gallagher says. “They are buying new machines, sourcing components from new vendors and increasing manufacturing space prepping to capitalize on the industry boom.”
There’s only so much they can do, Chrismon says of the manufacturers. And while it frustrates many customers to no end, Chrismon encourages his customers to be less picky and take what’s available if they really desire a spa ASAP.
“If they find something they’re happy with and they like it, and it’s in the price range they need, I would definitely tell them to jump on it,” he says. “There’s no guarantee when the model they want will be here and at the price they see now.”
Cost of Business
Like the retail side of the industry, hiring committed workers has also been tough for the manufacturing side, Gallagher says. It’s hard to estimate lead times these days, he adds, but Gallagher thinks the industry will continue to thrive at least through 2022.
“When demand started picking up, we placed our customers on an allocation,” he says. “I can say with confidence that all of our customers are wanting an increase for their allocation in 2022.”
Between the rising costs of freight and raw materials, costs are going through the roof, and retailers are passing those increases onto consumers. Gallagher says overseas containers are six times the cost as before the pandemic, for example. Even so, he predicts the remainder of this year will be exciting for his company and his retailers.
“This will be another strong year for growth, and position us well as we make the necessary expenditures in infrastructure and technology to keep up with demand,” he says.
Spa industry veteran and Clearwater Spas consultant James Luciano points to China as an indicator of how expensive it has become to operate a retail location on this side of the pond.
“The prices have gone crazy,” Luciano says, since many spa parts are imported from China. Shipping spas and parts in from China used to cost manufacturers around $4,000 per container, he says. Now it’s around $24,000 to ship a container to the United States.
The Challenge Moving Forward
Luciano agrees the industry will be strong through this year, owing to the travel and tourism sectors. Manufacturers, however, are having a tougher time making predictions for how retailers should order beyond next year. As it has been through the pandemic, many retailers are taking their best guess with each order they place — especially as they place orders further into 2022. It also means guessing at which spa brands may actually be available for retailers carrying more than one line.
“Some spa brands I haven’t seen in a year,” Chrismon says.
Parts not coming in on time continues to be a struggle right alongside placing spa orders.
Breaux says she has customers waiting upward of four months for one part for a repair. That can be especially frustrating when the part finally comes in and the price is higher than originally quoted, which is what many retailers have had to do as manufacturers pass along higher markups, too.
But business goes on. And it must, retailers say, even in a global pandemic because spas are an essential business. Relaxing is essential, especially in these times, and customers need it. Despite the pandemic wearing on and the threat of more lockdowns looming, retailers continue to plan for the future. “We’re taking things a day at a time and a week at a time,” Chrismon says. “We can only take things as they come.”