High gasoline prices continue to impact the pool and spa industry.
Last month, the U.S. Department of Energy raised its forecast for
2011 gas prices to a national average of $3.56 a gallon — a
whopping 77-cent increase over 2010’s nationwide average. The
DOE has also said that gasoline prices may average $4 per gallon by
That estimate was revised upward in light of the political upheaval
in oil-exporting countries, such as Libya. A number of other
factors — including rising demand for oil in developing
countries like China and India, and more aggressive speculation in
oil futures on the commodities market — have also played
roles in the recent price increase.
So far, some companies in the construction and service sectors have
been trying to absorb higher gas costs — but industry
insiders say that if prices keep rising, even those niches will
soon have to adapt. “We may see the return of the fuel
surcharge,” said Greg Howard, executive director of Carecraft Inc. in San Juan Capistrano, Calif.
“You’re also likely to see a jump in the cost of a
In fact, service companies that have held off on raising their
rates are finding it harder to ignore the effects of rising gas
prices. “So far, what we’ve done is just bite the
bullet and hang in for it,” said Curt Johnson, general
manager of North Bay Water Service in Benecia, Calif. “But
I’m starting to see increases in product prices.”
Farther up the supply chain, manufacturers have found themselves in
a similar situation. While fighting to keep prices as low as
possible, they’ve begun to feel the pinch in terms of freight
costs. “If we hit $5 a gallon, [companies will] ultimately
have to pass that on to the end user,” said Aaron Fick,
corporate transportation manager at BioLab in Lawrenceville, Ga.
“The industry can’t just continue to absorb
Still, some business owners say absorption is the best strategy for
the time being. Johnson said his company has held off on rate
increases during previous oil price spikes, and reaped the benefit
of customer loyalty in return. He’s been addressing the
current situation by working closer than ever with one particular
supplier. “That’s working out really well,” he
said, “because we’re getting decent-sized deliveries.
So now’s the time to build a better relationship with your
In the long term, though, some think suppliers may find that the
root of the problem lies much deeper than gasoline prices.
“Gas is probably not quite as big a deal as what will happen
over time to petroleum-based products,” Howard said.
“High petroleum prices affect corrugated plastics in a huge
way, and that will affect almost everything the industry makes,
from covers to liners.”
Others, however, say high gas prices may ultimately have a mixed
outcome for the industry. “If it takes $300 in gasoline just
to take the family on a four-day vacation,” Fick said,
“people are more likely to stay at some and use their pool
Johnson has already noticed some of his customers taking an
increased interest in their backyards. “I’m getting
lots of calls that I normally don’t get this time of
year,” he said. “A pool is a lot of money invested in
the ground — and if you want to keep that investment secure,
you have to spend money on it.”