Spa Market

[Summitman]

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!

 

[Vanguard]

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.

[Steve]

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...

[Jacuzzi Jim]

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.  

 Any other dealers care to share your thoughts?

[Summitman]

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!  

[clover]

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

[Vinny]

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.

[Bonibelle]

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.  :-/

[D.P. Roberts]

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?

[Vanguard]

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.

[Brookenstein]

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.

[Jacuzzi Jim]

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!    

[GREEKgirl000]

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

[Jacuzzi Jim]

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.  

[Spatech_tuo]

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.