Panelists share what they think business will look like going forward
New normal has been replaced by normal. Our lead times now are months instead of weeks, and managing expectations is the biggest challenge we face. Instead of dream fulfillment, we are working toward dream adjustment.
New spa sales will keep rising, even as things open up. The world is really different than before. We will live the rest of our days close to home, making our homes the safe and enriching places we used to just fantasize about.
Living though a pandemic will permanently change our plans and behaviors. My grandparents lived through the Depression, so they still stockpile toilet paper. This generation will never be without an oasis out our backdoors.
With this global mindset change comes learning that things will simply cost more. Increases of 15% to 30% on all items, from food to fuel to hot tubs, are not going back down. With these increases, lifestyle is still key for families, and we will all be re-evaluating our leisure dollars. The competition for these dollars is still there, but we have seen folks be more understanding than ever before.
A year ago, we all believed by now we’d be back to normal. That obviously has not happened. My guess is that next year will be a continuation of this year, with some improvements in getting raw materials to manufacturers so suppliers don’t limit their production. Many manufacturers have already sold a good portion of their production for 2022 as well. I hope by then, industry suppliers will have been able to increase production.
I have heard the shipping crisis with containers internationally should be better in the first quarter of 2022. This will be a big help.
All in all, if we all had twice as many spas available, we could probably sell twice as many spas. I am surprised customer patience has lasted this long, but people are used to it. Once that starts to change, our industry better be ready. Otherwise, the customer will end up purchasing other products.
Christian Staples owner Arctic Spas Utah Salt Lake City
Back in the good ol’ days, someone would walk into our showroom, look at the various floor model displays we had, maybe wet test our filled hot tub, choose a model that best fit their needs, and we would order it in with a 4- to 6-week lead time. If we order one-off hot tubs, the way we used to do it, customers are waiting nearly a year for delivery. The kicker of this whole situation is that people are okay with it!
Our industry is growing infinitely, but there is not enough supply to go around. In a time when we could all completely sell out multiple truckloads of spas, we are unable to. We simply cannot get the supply necessary to fulfill every request we receive. As a company, we have had to adapt accordingly, and we’ve been thrown curveballs around every bend.
Our new normal for hot tubs is a reservation off pre-ordered spa trucks. We have been lucky enough to be able to order full truckloads of hot tubs that are still customizable prior to production. Essentially, we get in line for 12 to 14 hot tubs, customers make customized reservations for a truck that will be to us around a certain timeframe, and once our turn comes up, we place the fully customized order for the hot tubs we have pre-sold. It’s the wildest way of selling I have ever witnessed, and I would have said you were crazy if you ever proposed this method previously; but it’s working better than any of us ever thought possible! As of September 2021, our company sold out for the year, and we have started reservations for spring of 2022. I still find this unbelievable.
Along with the busiest year we’ve ever had, we also saw more mid-season price increases than ever before; anywhere from 5% to upwards of 25%. Many of these increases came after a sale but before receipt of the item, leaving us with the tricky situation of eating the additional cost or having a hard conversation with our customer. We ended up having to adjust our future conversations with customers and approach each sale with complete transparency as to the state of our industry and the uncertainty of pricing. Miraculously, most customers understood why we could not provide them pricing that would last longer than a month.
We all planned for this overabundance of new customers to begin lulling after 2021, but it does not seem to be slowing down. While we are uncertain of what the future looks like in the world of hot tub and pool sales, we must anticipate a slow-down of some sort eventually. We cannot know if this is going to be a gradual taper or sudden drop-off, but we, of course, hope for the more gradual lull.
While a slow-down of sorts is inevitable, we do believe that our normal pre-COVID monthly sales numbers will see a permanent increase going forward. We look forward to the day when our supply matches the demand we are receiving.
Pricing is an entirely different conversation to be had. We have no doubts that we will see continued price increases across all products, but we again hold out hope that these increases will slow down and level out. We have no expectations for pricing to fall back down in any way, only that we will start to see annual price increases, rather than quarterly increases.
The only potential we see for pricing decreases, would be to shipping costs. These have steadily increased since March of 2020, and these increases combined with those of supply costs have rocketed our customer’s expenses to unprecedented highs. Material price increases are inevitable and expected, but we’ve never seen shipping prices do what they have over the past year plus.
With all that the past couple years have thrown our way, we remain resilient and have seen more business growth that we ever could have expected. We are hopeful that some of our standard business practices will come back into play as our industry settles down, but we are thankful that we, as a business and industry in whole, have been able to adapt and overcome adversity.
Breanna Frink manager Blue Lagoon Pool and Spa Cedar Rapids and Coralville, Iowa