The decade started out quietly enough. After all, Jan.
1, 2000, wasn’t perceptibly different than Dec. 31,
The industry was still honing its skills in pool and spa design,
with the increasing use of vanishing-edge and perimeter-overflow
vessels and various types of waterfeatures, even on vinyl-liner and
Retailers and builders alike were broadening their products and
services to include virtually all backyard amenities.
Meanwhile, service technicians were familiarizing themselves with
increasingly sophisticated technologies.
On a less positive note, the National Spa & Pool Institute was
still trying to find its way after being forced into bankruptcy by
the landmark Meneely diving case. And a relatively obscure
phenomenon called entrapment was gaining public attention.
Yet business owners of all stripes continued to enjoy an economic
growth spurt that had started in the late 1990s. And the World Wide
Web was graduating from a novelty into a legitimate business
Strangely, the years from 2000 to 2010 were almost like two decades
— the one before and after the fall of 2008. During the first
part, the pool market expanded into a builder-dominated gargantuan
barely able to keep up with demand. In the second chapter, not only
did the industry shrink like the rest of the construction segment,
but it favored service companies, retail and renovation. Like it or
not, this industry would be changed forever.
Ups and downs
At the turn of the century, the economy was chugging along, and
carrying the industry with it. Builders were king, and home-owners
were opening their minds and wallets to more and more products
— not only elaborate waterfeatures and vanishing edges, but
outdoor kitchens, fireplaces and other amenities.
The market dipped briefly after the dot-com bubble burst, followed
directly by the events of 9/11. But by the end of 2003, the
industry was in fine form. In fact, the country had entered a new
era where home values seemed to endlessly skyrocket, offering
previously unknown equity to consumers.
On top of this, financial institutions became increasingly
freewheeling, valuing homes at 100 percent of inflated prices and
offering mortgages with little to no down payments. New-home
construction remained at historically high levels, and with it,
pool digs. So steady were housing starts that some pool contractors
began to work exclusively with home builders.
Because of the easy credit and high equity, everybody moved up a
notch in their pool and spa purchases. Those who a few years
earlier would have bought aboveground pools now purchased entry- to
mid-level ingrounds. Middle-class families were signing on to
$50,000 projects, with some exceeding $100,000.
Meanwhile, high-end installations reached new realms of
extravagance, with some wealthy homeowners even purchasing lots
next door to their houses just to accommodate large, elaborate
waterscapes. Others hired contractors to raze relatively new pools
and replace them with something to their exact
But in later in the decade, many builders began to see sales drop
and realized they couldn’t count on their companies to
continue growing by double digits each year from sheer
Business owners tried to put the situation in perspective.
“The problem is, do we compare [now] to the absolutely bonker
days of 2005 and early 2006, when the market was just hyper? Or do
you compare it to 2001 and 2002, before the housing boom?”
one builder asked in 2007.
While some younger professionals struggled to find their compasses,
veteran builders who had been through previous recessions took the
situation in stride ... at first. “We’ve been through
this before; we’ll go through it again,” they
“Maybe a return to these numbers isn’t such a bad
thing,” another builder commented. “It’s funny.
The one thing that time will do is get people to stop remembering 3
percent loans, 4 percent money. That was Fantasy Land. It was fun
to do, but it wasn’t our real world. Today’s 6½ to
8 percent money — it was only a few short years ago that we
used to think that was pretty good.”
Florida, Phoenix and a few other previously red-hot markets became
a barometer of things to come, when companies reported declines of
60- to 80 percent, with foreclosures going through the roof and
financing grinding to a complete halt.
“[Even] if you’re Zig Ziglar trying to sell pools, this
market is tough,” said Ron Ostlund, president of now-defunct
Riviera Pools in Phoenix.
In September 2008, any remaining denial was laid to rest when the
stock market crashed and many financial institutions were forced to
shut their doors. The following year brought a blur of company
closures, restructuring, redefining, paring down of expenses and
Though many companies went under, the industry’s shrinkage
was not nearly commensurate with the reduction in pool
Resilience and innovation played a large role in the survival rate,
with firms shifting gears by focusing more on renovation work and
expanding their service departments. In addition, commercial
construction saw one more year of activity, becoming an important
income stream for some companies.
Those who acted quickly fared better. Previous business practices
also affected a company’s outcome with those who had remained
conservative about accumulating debt during the boom having better
Industry changes occurred not only in the size of the market, but
in the philosophies of many professionals as well. Companies became
lean and mean, with owners vowing never again to allow overhead to
reach the levels it had. Today’s business owners are checking
their financials much more often to constantly monitor costs and
remain nimble in the present environment.
Other side effects of the economy have been more controversial.
Most notably, many say that price competition has been fierce to
the point of damaging. In some cases, builders report losing jobs
to competitors who bid projects at 20- and 30 percent less, and
many worried that this pricing mentality was going to set the
industry’s image back 30 years.
With 2010 and 2011 bringing modest increases, the siege has
loosened a bit, but the next few years will tell how the industry
wears its new size.
As energy costs continue to rise and fall capriciously, and power
grids become more and more overloaded, utilities and government
agencies have looked for any way they can to promote
In 2005, the California Energy Commission released the
state’s Title 20 and 24, meant to require manufacturing and
construction practices, respectively, to make various products,
including pools and spas, more energy-efficient.
The old saying, that “As California goes, so goes the rest of
the country,” has applied here. So far, a number of states,
including Florida and New Jersey, have instituted similar
The industry responded with products and programs that cut energy
use. Variable-speed pumps entered the market, making it possible to
run a circulation system as slowly as possible and, when needed,
boost the output for features such as automatic cleaners, vanishing
edges and waterfalls.
On the construction and service end, not only have some
professionals become active advocates for variable-speed pumps, but
others have created sideline businesses installing solar and
geothermal heating systems.
Industry associations have also taken part in the effort. The
Foundation for Pool and Spa Industry Education has begun a program
in Sacramento County teaching professionals how to work with local
utilities to audit pools and spas for energy efficiency. The
classes are expected to go nationwide.
As public utilities look for more ways to entice homeowners to
control energy use, such as charging higher rates during peak
hours, these technologies become even more relevant.
It was clear in the 1990s that the Internet would become a forcethat the industry would have to define and negotiate. But toward
the end of last decade, as companies did everything they could to
survive the recession, some began to see Web-based firms as a more
“There’s not going to be a pool industry left, because
now we’re not allowed to make money on anything,” said
Randy Budd, president of Budd’s Pool Co. in Deppford, N.J.,
It was bad enough losing business to other companies willing to
sell products for less money, but many professionals came to
believe that the Internet has an unfair advantage — namely a
perceived lack of overhead and ability to “drop-ship”
directly from manufacturers to consumers. Retailers had always felt
the heat from Websites, but now the pressure was extending to
builders and service technicians, who were increasingly being asked
to install equipment purchased off the Internet.
Today, some brick-and-mortar outfits would like to see checks and
balances put in place to even the playing field. The most
talked-about solution is large-scale minimum advertised pricing
(MAP), a program whereby manufacturers set a limit as to how low
prices can be publicized. Some manufacturers have tried this
strategy with desired results, while others say it requires too
much policing, and that there are ways to get around the
Meanwhile, service and construction companies have grappled with
what to do when customers ask them to install equipment they
purchased online. At first, many flat-out refused. But as the
economy stumbled and Web purchases became increasingly common, some
have found ways to work with these products and still profit.
“For the longest time our mindset was, ‘You bought it
on the Web? Good luck. Have a nice life,’” said Bruce
Bagin, a partner at B and B Pool and Spa Center in Chestnut Ridge,
N.Y., in 2010. “But … I changed my attitude. I stepped
back and am not taking it personally.”