Hot Tub Forum
Original => Hot Tub Forum => Topic started by: Summitman on January 24, 2008, 08:25:00 pm
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On a fresh note, how was everyones 2007 in the spa business. Was it a good, bad year? I noticed a small drop in the amount of leads we received, but then again we spent less on advertising. We sold more spas than previous years but on a whole we are still a young business and should be growing. Just wondering how everyone else did or has been doing!
:)
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The industry as a whole is estimated to be down another 15% this year.
I read in Pool & Spa News that in 2004 or 2005 the total industry estimate was 450,000 units. For 2007, the estimate was put at 350,000. Huge drop in business over the past few years. Regardless of which year was the high, that is still a major decline.
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Obviously reflecting my leaving the spa biz and the impact of my sales figures! ;)
Seems I got out at the right time and I've been told that by more than a few people. The economic forcast for the US in 2008 does not sound promising and there will be a trickle effect in parts of Canada also (Ontario mainly).
You'll find that people aren't going to be spending as much money this year on big ticket items. I'm hoping I'm wrong as I have a lot of friends in the spa industry.
I heard a 5-10% decrease in overall sales in Canada for '07. I don't know how accurate that is though...
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Since no other dealer/salesman are chiming in I will. I was down 80,000 in sales for my self last year, not a huge drop as thats only 10 to 15 spas depending on models.
Whats strange is our projection to Jacuzzi last year was almost right on for spas ordered in by the end of this year. I think what has happened is, while our numbers sold stayed close to the same the dollar amount of the spas sold were down, while I did sell quite a few in the 9 to 12,000 range most of my sales were in the 5 to 8000.00 range. I would rather sell more expensive ones like any salesman, but I will take those lower numbers as opposed to nothing.
I think this year will be interesting, the media shouting recession doesn't help any either. >:(
So far this year is proving to be slow so we will see. The housing crunch is finally catching up to us here in the Pac NW, I am sure that will have an impact on everyone. Since we are a large company that sells more than just spa's we are doing ok.
The local HS dealer is moving into a new building soon, we will be building a new 15,000 sqft showroom this spring about a 5 iron distance from the HS dealer ;) So things are moving ahead for us. With the Olympics in Vancouver BC in 2010, most traveling there have to drive right past our store on the freeway. Rumor is after any Olympic's there is a boost in growth in that area so could be some very good years after that?
Anyway time will tell and its still early in the year for sure! Here's to a good year for all spa dealers, except Costco. ;D
Any other dealers care to share your thoughts?
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Very interesting Jim and thanks for the response. Im not sure if we are starting to see the effects here of a market slowdown or if its just the ridiculous weather we have experienced here in the midwest. I really believe its the weather more than anything. Its so dang cold here that I need to sweep up all the leftover sand and salt from the last snowstorm but I have no ambition whatsoever to do so! I will know more about the market after the upcoming shows, we will get a much better grasp there.
Also, I wonder if the tax rebate that Bush signed off on yesterday will help us a bit. Cant hurt, just need to find ways to get that money to be spent on spas and not tv's!
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Once you own and enjoy a Hot Tub you will always want to have one available. On the other hand, considering our economic times and maket conditions that differ accross the country, buying a Hot Tub will always remain to be on the "wish" list, BUT, not necessarily on the priority list. Today we are seeing the focus on such basics as food, shelter, clothing, keeping up with the bills, and oh yes, do I still have a job.
We have been hit pretty hard in the midwest with major company failures, manufacturing industry declines, 30,000 lost manufacturing jobs, 70,000 forclosures in our area of SE Michigan. Other Hot Tub stores have felt the pain deeply, as more than 10 Hot Tub stores have closed their retail showrooms in our area due to the lack of shoppers much less sales. With few shoppers shopping, they are being treated like dog meat that has everyone fighting over them to get the sale, that's not good.
Although we have closed both of our showrooms for now to weather the storm, we have continued to service and supply over 3,500 customers that we have served and sold over the past 27 years. Better times will return in time, but this is the worst any of us have ever seen it. Stand by for the ripple affect.
How about it Spa Guru
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I heard this morning on CNBC that 1 in 7 homes will go into forclosure. That's an aweful lot of people losing their homes. I have a niece in Ann Arbor and she tells me its terrible there as far as the economy. I know people who worked at the Ford plant in NJ and had to move a few years ago due to the plant closing ... can you imagine having to move now, lose $50,000 or more on your house and hope that it won't close.
Times are really tough. They are talking recession but even the experts don't seem to know. It's a shame that dirt bag mortgage lenders preyed on unknoweldgeable people. But I can't believe that all these people were so gullible.
I was thinking about opening up a spa business and just couldn't bring myself to sell something that is not a neccessity. People do need to eat but they may not need to soak.
I imagine all non essential buying will almost dry up in the near future. Heck I hope to have a job in the near future. If I lose my job - there aren't too many around for what I do. I'll have to keep my tub water drinkable!
But the good news is it will all go back into the positive cycle once the panic is over. People that couldn't afford houses will buy them, prosperity will be around us and people will be in the spending mode.
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I have to say, today at the Philadelphia Home Show, there was no indication that folks didn't want to spend money on hot tubs. I would love to see sales figures from that show for any of the three vendors.
Personally, I have two friends that just purchased within the last few months also. :-/
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I heard this morning on CNBC that 1 in 7 homes will go into forclosure. That's an aweful lot of people losing their homes.
Wow, that can't be right. The last numbers I heard were that 20% of loans in 2006 (the highest year on record) were subprime, and of those about 7% are in default nationwide. That's about 1.5% of all mortgages - or 1 in 100 houses.
But the good news is it will all go back into the positive cycle once the panic is over. People that couldn't afford houses will buy them, prosperity will be around us and people will be in the spending mode.
The other interesting note is that people have been talking about recession for months now. Many of the news articles mention that we seem to be talking ourselves into a recession - companies aren't hiring because they think we're heading into a recession. When they're not hiring, people don't have income, and can't spend, which leads to companies losing money, so they can't hire people. So we may be actually talking ourselves into a recession.
My question to all you spa dealers out there - do you think your customers (those who can spend $6,000-$10,000 on a hot tub) are likely to have subprime mortgages?
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I have learned to not trust CNBC for anything. They are very political. If they can do anything to cause Pres. Bush problems, they will.
If they did say 1 out of 7, they probably just didn't mention they meant 1 0f 7 subprime mortages.
I, for one, have chosen to not participate in any kind of recession.
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I would say in my neighborhood that 1 in 7 number could be very true. A year ago I had about $80 grand in equity now I'm in the hole about $80 grand (before realtor fees, taxes, etc.). I'd say about every 7 or 8 houses is up for sale and at least 1/2 right on the sign say lender owned or bank repoed.
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My question to all you spa dealers out there - do you think your customers (those who can spend $6,000-$10,000 on a hot tub) are likely to have subprime mortgages?
My answer would be, no!
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My family owned 5 stores in the northeast (spa stores) and i say owned now we are down to 1 store. Please dont believe what you read on this fourm. I have been reading this fourm and had to post my thoughts the market stinks, you really dont have to be a rocket scientist to see what is happening! Look around, anytown USA and notice all the homes for sale? The stock market , oil prices, food prices , gas. Our goverment is offering a stimulus package.Why? not because our state of our economy is strong. Its in the dumps and face it guys the last thing people buy are luxury items. Lets hope and pray for a turn around sometime soon or it may be your business next. Godspeed to you all.....Adare
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My family owned 5 stores in the northeast (spa stores) and i say owned now we are down to 1 store. Please dont believe what you read on this fourm. I have been reading this fourm and had to post my thoughts the market stinks, you really dont have to be a rocket scientist to see what is happening! Look around, anytown USA and notice all the homes for sale? The stock market , oil prices, food prices , gas. Our goverment is offering a stimulus package.Why? not because our state of our economy is strong. Its in the dumps and face it guys the last thing people buy are luxury items. Lets hope and pray for a turn around sometime soon or it may be your business next. Godspeed to you all.....Adare
Bit gloomy there, I think it depends on the area, some will really feel the crunch others will not.
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My family owned 5 stores in the northeast (spa stores) and i say owned now we are down to 1 store. Please dont believe what you read on this fourm. I have been reading this fourm and had to post my thoughts the market stinks,
I believe what the forum is saying because its a mixed bag. Most say the market stinks but there appear to be pockets where things aren't nearly so glum. Someone from Michigan may tell you things are terrible which is probably true for that area. Someone else may be in a city where things are in much better shape.
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I wonder if a lot of it is a function of where you live. If you're in a neighborhood that was particularly susceptible to the subprime lenders, then you're probably going to see more of these problems. If you're in an area of the country - like southern Michigan - that was already doing poorly, you're going to be more susceptible to a downturn. If you're in an area of the country that had a big housing "boom", you're more likely to have a "bust".
I know that several board members like me are from central Ohio, so feel free to chime in if I'm wrong, but personally I don't see it here. I don't see massive home forclosures, and I drive through a variety of middle-income to wealthy neighborhoods on my way to work. I don't see retail places closing - in fact, retail developments are opening all over the place.
I can't really say if home builders have scaled back their plans or prices. I do know that house prices around here didn't go through the "boom" after the 2001 recession, so I really don't think they've dropped much.
I have a lot of relatives in Southern California. I used to be quite envious about the rapid increase in the prices of their homes. Now I'm glad I live somewhere more stable.
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I think there is no doubt the economy is a in a major down turn. It is a tough go for many many segments and spas are one of those. I recently heard that in just about every major recession only about 20% of people are truly effected. I am not belittling those who are feeling it ( I am one) but that leaves 80% who are not. I think much of what the news reports and how it is reported causes more fear and anxiety than is really needed. I think the leadership in this country from all political parties is lacking any real depth and substance and the simple fact is there really are no strong leaders who have a clear vision that inspires others. The new aid plan to boost the economy is so short sighted and will amount to next to nothing. The money should go into long term projects that will employ many of those effected by the housing market down turn. Build new public projects, parks, roads, bridges etc and keep things moving for the long haul is what I would like to see.
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The truth is nobody knows where the sub prime or overextended exsist. I look around and see expensive houses with expensive cars sitting in the driveway. People may have excellent credit but may be overextended as well. $10,000 on a credit card is $300 a month - no big deal unless there is a $1000/month car payment (2 cars), $2000/month mortgage, $300/month utilities and keep adding it up. I am 48 YO and I don't know how all these people have that type of money. My wife and I make decent money when we combine the 2 salaries together and we certainly don't have the debt that a lot of people have yet we would never be able to live that life style.
People do not save and until this problem hits them they don't believe anything will happen to them. Remember that people who can walk away from a home and may declare bankruptcy may just spend everything they can for when the bottom drops.
Are we in a recession - I don't know but things are getting harder to afford. As far as CNBC being political - they all are. We are far past the days that news was reported to report the news. Every news organization now slants things to how they want you to perceive it.
Is it all doom and gloom - I hope not and I know this cycle has been around before. I bought my first house in 1986 and 2 years later the bottom dropped out of the market in the NY area. We had a town house that was worth less than the mortgage amount and I had an adjustable rate mortgage. I knew nothing about any of that stuff and I thought it's going to be great. Well as the bottom hit my mortgage was going up 1% every 6 months - it went from 6 1/4% to 10 1/4% OUCH!!! We survived and it took 13 years to be able to afford to sell the town house to move where we are today - we lost $9,000. Had we waited a few months we would have made money and before this sub prime problem hit I hear the were selling for $260,000 more than we sold it for 7 years before. It will be OK again soon.
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I have been in the advertising business for 19 years. I deal with local mom & pops, car dealers and national accounts. Except for right after 9/11, this is the most cut-backs I have seen in the advertising business. Usually advertising is mistakenly the first thing to go when times are tough.
Also, I agree with one of the posts above. It is usually the people you least suspect to have subprime mortgages. The houses I know in my neighborhood that were foreclosed on were the ones that had the best lots and the nicest cars....the people we assumed were the most successful were really just living beyond their means.
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Back here in Maryland, it now looks like even property owners who did not participate in the refi debacle are gonna get smacked. 1/3 of our state just got our new 3 year property assessments. My place "doubled" in value over the last three years. My brother's business property TRIPLED according to the State.
The assessments are based on sales figures for the last three years. In certain areas (Prince George's County and Baltimore City) there were ridiculous sales transactions going on which are now factored into the new assessments. So our real estate taxes are set to double or triple back here. This should be the final push for a lot of people who are just able to make their mortgage payments.
Our real estate market got very overheated. There were properties which sold a shocking prices which are now empty (and I assume) are going into foreclosure. Its gonna be nasty. Last week the owners of a commercial property on the main street of town tried to sell it by auction. Last year they paid $750,000. The highest bid at a well attended auction was $450,000. (They didn't accept the bid)
In the mean time, we will be paying taxes on these ridiculous assessments for the next three years. Woo-Woo. I'm gonna appeal the assessments, but I'm not sure there is much we can argue about until the foreclosures get factored in later.
I realize some might say we are crying crocodile tears, but when no one actually paid you what the state now says your house is worth, it is hard to pay the new doubled or tripled tax bill (along with the new oil bill, electric bill etc....)
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The property tax thing is kinda funny... for the first time in the 3 years we've owned our home here (SoCal) they raised our value of our house... yet we dropped probably $80k from our assessed value in the last year.
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we think alike vinny. when everyone around us was singing the virtues of their adjustable rate mortgages i just felt safer with a fair fixed rate. another victory for the tortoise over the hare. when the market bottoms in a couple years i plan to snatch up that hare's house and rent it back to him.
from the business angle the landscape sure seems to favor long established dealers with large, loyal customer bases. it would be hard to have to rely on spa sales to comprise 80% of income. i like the approach of the michigan dealers closing the doors but maintaining parts, chems, and service. a bunker mentality may be the best suited to survive whatever is to come.
p.s. sorry w i'm not blowing my stimulus check. its going right in the bank.
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Living in Canada we haven't seen the disaster you guys have with the sub-prime mess. It just didn't happen to the extent it did in the U.S., banking laws are very different here. Makes me glad we locked in our mortgage for a 15 year term, with accelerated payment the house will be payed for in 12 years. WaHoo!!! I smell a mortgage burning party! Investments are still doing well, in fact I recently converted most of mine to U.S. monetary funds, there is just no way the Canadian dollar will stay at par or above the greenback. So I am rooting for the U.S. economy big time.
Living in a border town that is very automotive based we have seen the same slow down as our friends in Michigan. There has been a number of plant closures and bankruptcies. Ford Motor Company employed almost 7,000 people directly at one point, a couple of years ago, two plants have closed and one has been "mothballed" they now employ about 1,500. Times are getting tough!
However, this is cyclical and we have seen it before, it will turn around and prosperity will return
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Living in Canada we haven't seen the disaster you guys have with the sub-prime mess. It just didn't happen to the extent it did in the U.S., banking laws are very different here. Makes me glad we locked in our mortgage for a 15 year term, with accelerated payment the house will be payed for in 12 years. WaHoo!!! I smell a mortgage burning party!
In Canada:
I will always be thankful to my father who pushed both my brother and me to always take a 15 rather than 30 year mortgage. Its nice that I can see the light of day on my payoff.
I think Americans may have learned over the last 10 years that government regulation may not always be a bad thing. The present condition of our airlines, mortgage companies, local utility companies and even our now departed local Banks and S&L's demonstrate that while capitalism is a great economic system, it has a tendency to run amok if not regulated to protect the consumer.
I recently flew "First Class" to Hawaii on United Air Lines. What a joke. I think my parents may have flew on this plane on their honeymoon! Truthfully, the level of comfort and service was just slightly above what used to be the standard in Coach. I asked for a new set of earphones for the community movie screen (with commercials, btw). The Attendant searched around and them came back to me and said "Sorry, honey. Since we're going broke, we don't have any." I'm sure glad I used points rather than cash for the upgrade!
Rich
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15 year mortgages are a great thing IF you can afford them. Adding another $300 month or more to a family that is just getting by (mortgage wise) can be a little dangerous. It starts out that much higher but as taxes and insurance gets higher so does the payments as well. I have a 30 year mortgage, have refinanced 2x and am lucky as my rate is 5 7/8%. My bank informed me that they need another $75/month to pay for the shortage that will be in my esrow account. Luckily for me it is not a big deal. I'm actually hoping as the fed cuts the rates that the interest rates dip below 5% ... I'll refi again!
Paying down the mortgage is a great thing. I have been doing that for a few years now, thlrowing extra money towards the principal.
But some of the issues I think are: American consumers lease cars - they never are without car payments , need every channel on cable - I have a friend that has a $140/month cable bill; mine is $64, must have the "best" of everything - from big screen TVs to GPS's. And as I said before - in debt too far. I talk to too many people who don't have a clue about managing their money - I work with a guy who on Friday had a call from his wife that his dryer broke (she's a stay at home mom). He needs to fix it because he has no money, I could appreciate that but 6 months ago they HAD TO have their basement finished and used their last $4000 - I tried to tell him not to in case something happens but they absolutely needed their basement done - this is the problem with a lot of people - wrong priority.
It was said on here about established dealers and I would have to agree. Someone who has a client base may be able to weather the storm, a new store I don't think so. There will always be people who aren't affected by these things and they will continue to purchase. There are also a lot of people who like myself don't overextend themselves and may purchase something expensive but may wait until the storm is over.
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People have to have it now, for sure. They also don't see the money they spend on collections of DVD's, books, music CD's, when there are libraries and rentals for all those things. Leasing a new car every couple of years is a real money eater. Needing to remodel is often seen as a real requirement that people will often times think, 'oh, it will raise the value of our house when we go to sell it too!' More than likely it really won't and it won't raise it enough to make up what you have spent. Redoing a basement when the kids are in their teens seems like a good investment, but only if your house is usually the gathering place to begin with. We always would be thinking, well, let's see they will be in college in a few years and then what use will the basement get? People that need homes with more rooms than they can ever use is a real puzzle to me. People will put on a year round sun room and yet everyone works and goes to school and has zip time to even clean this new addition, LOL, more/less spend quality time there. I have friends that have had cleaning crews come once every week or two saying they deserve it 'cause they work full time...oh, but if you aren't too fussy dust bunny-wise, you can save a lot of money doing it yourself and it really doesn't take that much time! And then there are the new computers, digital cameras, video cameras, cell phones, IPODS, that must be replaced as quickly as technology opens a new door. As well as cable/satalite discs that give us hundreds of channels and there is still nothing on!! It is true that the real millionairs are the ones living in the more modest sections of towns in the smaller model of homes. They quietly enjoy their lives on a different level and aren't looking to improve, improve, change, update, vacation in exotic places... ;)
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We have been very fortunate in East Texas over the last few years. Our business is located right in the middle of the Great East Texas Oil Field which at one time was the largest in the world. During the 80's, the region was hit hard as the field started to dry up. With the new technologies available now and the need for oil, business is booming. I've got tons of customers that work in the petroleum industry and they are living high on the hog for now. One of my customer's is bringing in a million $ per month! :o
Nothing lasts forever, so we are trying to run as lean and mean as we can whilst squirreling away our nuts for a rainy day.
Term
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We just got our 3 year assessment last week - the price on our house is almost exactly what we paid for it 2 years ago. There's an average amount of houses for sale in my small neighborhood, & they seem to be asking the same prices they asked 2 years ago. No great gains, but no huge losses either.
BTW, as I drove by my local Hot Spring dealer yesterday afternoon they had 20 cars in the parking lot. I'm sure that includes employees, but that's a lot of people looking at spas & other fun stuff.
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We just got our 3 year assessment last week - the price on our house is almost exactly what we paid for it 2 years ago. There's an average amount of houses for sale in my small neighborhood, & they seem to be asking the same prices they asked 2 years ago. No great gains, but no huge losses either.
BTW, as I drove by my local Hot Spring dealer yesterday afternoon they had 20 cars in the parking lot. I'm sure that includes employees, but that's a lot of people looking at spas & other fun stuff.
DP...What part of the country are you in ?....What you are speaking of seems to support what I shared earlier that most recessions effect about 20% of the people but that leaves 80% who really feel little to no direct effect. By no means am I belittling those effected I am being hit dead square from housing to business.
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DP...What part of the country are you in ?....What you are speaking of seems to support what I shared earlier that most recessions effect about 20% of the people but that leaves 80% who really feel little to no direct effect. By no means am I belittling those effected I am being hit dead square from housing to business.
Central Ohio (along with Lt Dan, wmccall, & others). I know that Ohio is one of the worst-hit states for the mortgage crisis, so more of my neighbors may be affected by this than I'm aware of. However, the malls are packed, the store I work at (we sell books) is doing better than ever. I think in many ways we're going to make the recession worse - or force ourselves into it- by all the "doom and gloom" talk. Not that bad things aren't happening- because they are- but perhaps we're making it sound worse than it is, at least for everyone.
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I found this today.... we live in Riverside County...
Riverside County recorded 57,241 foreclosure actions in 2007, including notices of default, foreclosure and trustee sales, and bank repossession, said RealtyTrac Inc., an online foreclosure service based in Irvine. That was up 228 percent from the previous year and 827 percent from 2005.
San Bernardino County recorded 45,265 foreclosure-related filings last year, up 246 percent in a year and 680 percent in two years.
In rate of foreclosure activity, Riverside County ranked fourth among counties in the state last year and eighth in the nation, with 29,826 homes, or 4.3 percent of all households, in some stage of foreclosure.
San Bernardino County ranked seventh in the state and 18th nationwide, with 21,988 homes, or 3.4 percent of households, in the foreclosure process. The national average was about 1 percent and California's was 1.9 percent.
California ranked fourth among the states in percent of households entering some stage of foreclosure, trailing Nevada, with 3.38 percent; Florida, at 2 percent; and Michigan, with 1.95 percent.
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Dont know if its a promising sign or not, but after a really slow week last week things picked up a lot the past two days. We picked up three new leads and sold four spas. The weather was nice this past weekend so that must have been the reason. I personally think that we have been in a recession for the past six months anyways and we are in the process of working our way out.
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I would say that spa sales are slower here in the upper Midwest for sure. I've been selling either hig end or low end and less in the middle. People seem more conscience about there money in the last several years, but that can also be from more research and more information available to consumers.
Fortunately, we sell pools and patios as well to diversify our revenue. Spas tend to be more for the parents than the children, so many will buy a pool before a spa. Parents tend to sacrifice their wants before their childrens.
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Lots of foreclosures in my area also. I found this article tonight on foreclosures:
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=6119868>1=10833