A down economy doesn’t often evoke images of a children’s party game.
But in some harder-hit areas of the country, the situation is a lot like musical chairs.
As new-pool prospects become increasingly scarce, renovation and service continue to thrive. “Today, over 85 percent of the industry is composed of maintenance, repair and refurbishment jobs,” says Manuel J. Perez de la Mesa, president/CEO of PoolCorp, based in Covington, La. “Those segments have continued to grow because there are more pools every year.”
Those segments also have become a prime target for besieged pool builders trying to save their businesses during the worst downturn in industry history. The result? Everyone is going after a chair that used to belong to someone else.
While some suggest that service and renovation can support everyone, others think their prospects are being squeezed. And all agree that the current situation has invited even more unlicensed and unqualified companies to join the fray.
Race to renovation
Though the renovation market has softened, it remains far stronger than new pool construction. As a result, builders who previously targeted new pools are entering renovation in droves. Smaller-scale contractors and service firms are joining in as well.
But each segment faces its own strengths and limitations when trying to enter this market.
Builders and service technicians have the benefit of existing customer bases. In some cases, the homeowners won’t even place their renovation work up for bid, but instead stick with familiar companies.
“We’re not competing with five or six or even 10 competitors,” says Ron Robertson, president of Robertson Pools, aPool & Spa News Top Builder in Coppell, Texas. “We’re probably only in there with two people, and maybe nobody because you built the pool for them.”
However, even with this advantage, service companies often are not in the running for more complex jobs. Renovation work generally falls outside their realm of proficiency, so they usually need to hire subcontractors, which in turn prices them out of this particularly competitive market.
Conversely, plastering firms and other subs have the skills and knowledge to do the work, but unlike service firms, often are not top-of-mind for many consumers.
Subs also may be tethered by relationships with builders. If a plasterer, for instance, competes head-on with a local builder, they probably won’t be hired by that general contractor anytime soon.
Many service companies are faring quite well today.
“[In my IPSSA chapter], most of the guys are swamped,” says Carlos Majano, owner of Majano Pools in Palmdale, Calif., and president of IPSSA’s Antelope Valley Chapter. “They’re working six, sometimes even seven days a week, maybe 12 to 14 hours a day,” Majano says. “Right now, the service industry is holding the pool industry up.”
Several pool builders recently have launched or expanded service departments, in part to make better use of their start-up crews. And some have stopped referring service and repair work to other companies, as they did in the past.
Many service technicians say this reality hasn’t hurt them much. But one Southern California pool builder paints a more dire picture.
“I’m aware of some pool companies calling up 100 previous customers and telling them, ‘We’re so desperate to stay in business that we want to start servicing your pool, and we need you to fire your guy that you have servicing your pool,’” says the builder, who requested anonymity.
Homeowners often will acquiesce, he adds. “They figure, ‘If anything goes wrong with my pool, the building company still needs to be around. What if they go out of business and my pool cracks in half?’”
As a result, he says, service companies are losing work.
The real problem
Most service and plastering professionals understand this invasion into their territories. Some even wish their competitors well.
“Even though they might be our competition, I hope most of them can hang in through this,” says Kathie Hendrickson, vice president of Mr. Marcite Inc., a Venice, Fla.-based plastering and renovation firm. “There’s no animosity.”
But that sentiment is reserved for those with proper licenses and qualifications. Too much work, many say, is going to people without credentials.
It’s not just illegal contractors with lone pickup trucks that cause worry. In this market, you may find a landscaping or masonry contractor trying to tackle a complete renovation. Even some builders cause problems when they step outside their expertise.
“Builders who used to subcontract out to plasterers … are trying to plaster pools when they don’t have the experience and knowledge to do so,” notes Mitch Brooks, executive director of the National Plasterers Council in Port Charlotte, Fla.
The trend extends beyond remodels. A number of contractors are performing service work without the right licensing, says the California builder.
For Ken McKenna, it feels as if the industry is taking a giant step backward.
“The pool business was starting to evolve into more organized and larger companies,” says the president of Tampa Bay Pools, aPool & Spa News Top Builder in Brandon, Fla. “It wasn’t going to be your guy who works out of the back of a pickup truck. [But] there are more people like that again.”
To combat this development, legitimate firms must clearly state their own qualifications, while encouraging prospective clients to verify competitors’ licenses and insurance. McKenna takes it a step further, collecting references from vendors and lenders to prove his company’s stability.
And he isn’t shy about policing. Florida statute dictates that all contractors display their licenses in ads. When he advertises in a magazine, he’ll warn that publication if competitors don’t follow the law, and threaten to send the ad to the state if it doesn’t stop. “I’m tired of competing against people who don’t have licenses,” he says.
More worrisome still is the potential impact on the industry’s image.
“Every time a company goes out of business, somebody calls up a TV station,” McKenna says. “The TV crew goes out there and takes a picture of an empty shell with the kids looking at the pool.”
Still, some are determined to find the silver lining.
Recently, Brooks heard a plasterer remark that a local builder now was plastering his own pools, but not well. “His comment was, ‘That’s not a bad thing because I’ll get the job to redo it,’” Brooks says.