The economic recovery is nicely timed for the vinyl liner and package pool business. One reason: Many pools are old enough to need maintenance and new liners. Another: Homeowners are ready and able to invest in enhancements that make their pools into great backyard recreation destinations, while manufacturers oblige with products designed to meet their expectations.
Overall, vinyl liner and package pool manufacturers anticipate a stable, possibly up-trending market for 2016. Many are projecting 5 percent to as much as 7 or 10 percent growth.
This results from a combination of economic and usage trends.
Since vinyl liners typically require replacement every seven to 10 years, pools installed between 2005 and 2007 are on tap for new liners.
“The opportunity is in the renovation market,” says Will Cappiello, product director with Latham Pool Products in Latham, N.Y. “There are a large number of pools built prior to 2008 that are now just entering the renovation market. These pools can provide anything from a new liner install to a full-blown renovation including decking or hardscapes, steps, benches and tanning ledges.”
This reality merges well with the rise in consumer confidence. After all, large purchases aren’t made unless prospects are comfortable spending and can place a priority on protecting their investments. Given the current environment, homeowners are in the market for major upgrades, looking to transform their pools into showcases and stay-cation sites.
Demand for new pools is up as well, due largely to the rebound of the U.S. housing market and increase in equity.
The economic recovery is particularly relevant to the vinyl-liner market. During the recession, typical purchasers of this product did not have capital to put toward luxury items, says Frank Wall, president of Frank Wall Enterprises, a Columbus, Miss., manufacturer of aluminum concrete pool forms.
“Since the recession, that market is recovering, and funding is becoming available again,” he says. “Our builders have noticed a steady growth in their sales over the last three to four years.”
As for this year, manufacturers say their dealers reported early orders, beginning last fall, and many have healthy backlogs going into the 2016 season.
“We talked with many of our builders, and most are booked through August and [they say] the phones are ringing,” says Jim Bagent, national sales manager at package pool maker Family Fun Corp., in Louisville, Ohio.
Homeowners of all financial stripes are generating business. On the luxury side, builders continue to push the limits of design. But customers of other income levels are showing specific patterns as well.
“At the lower end of the market, we are seeing a resurgence of the rectangle pool for maximum water area in smaller backyards and economical pricing,” says David Rice, operations manager at Megna Pools in Pickering, Ontario, Canada.
Raising the bar
Having seen the new selection of add-ons available for vinyl-liner pools, homeowners are choosing all kinds of luxury extras for their installations.
“Almost every one of the pool liners we make today has a special treatment like a sun ledge, benches for in-pool lounging, large steps covered with vinyl — including textured vinyl on the steps — and even stools for sitting within the pool,” says Brian Naumann, operations manager for Pen Fabricators, a vinyl liner and cover maker in Emigsville, Pa.
In steel-wall pools, sun ledges and custom benches are especially on the rise, says Lynn Gano, creative brand manager with Cardinal Systems, Inc. in Schuylkill Haven, Pa. “Customers want to recreate the experience they have had while on vacation in luxury resorts,” she says.
This in part is made possible by manufacturers looking to satisfy the needs of their dealers and homeowners for special features and custom shapes.
“The sophistication of manufacturing has risen to a level that allows advanced entry systems and tanning and sun ledges that give the homeowner the freedom to design a pool that fits their lifestyle,” says Daniel Epple, vice president of sales and marketing at pool structural components maker Only Alpha, in Fort Wayne, Ind.
While package-pool producers have the ability to offer special features such as waterfeatures and sun ledges, the desire to introduce customization and wow factor hasn’t escaped makers of the liners themselves. Their product, they argue, is part of the luxury equation, too.
“The liner now has to be looked at as a major part of the design element,” says LeeAnn Donaton-Pesta, president and CEO of liner and pool cover maker Loop-Loc in Hauppauge, N.Y.
For certain, consumers now view their vinyl liners as something more than a functional item. This especially benefits the renovation/replacement part of business.
“Many consumers are changing their pool liners more out of a desire to update the look of their pool than to change out a failing liner,” says Dennis Chamberlain, director of pool sales for i2M, a liner manufacturer in Mountain Top, Pa.
These days, manufacturers can fabricate liners featuring a variety of visual effects, including metallic tones; luminescent and iridescent vinyl impregnated with shimmering ink; vinyl with embedded specks that sparkle in the light; and vinyl formulated to reflect sunlight for a more radiant look. Liners that appear seamless also offer high-end appeal.
This and other technologically advanced products — such as vinyl engineered to resist fading from UV and chlorine exposure, and wall board that shields the liner from rough pool walls or rusty metal — appeal to pool owners who place a high priority on protecting their investment.
In addition to the joy of adding to their backyard experience, buyers want to protect the environment. Website analytics for Radiant Pools has shown steady traffic on its pages that address energy efficiency and environmental issues, says Tony Sirco, president of Radiant Pools, a structural pool maker in Albany, N.Y.
“Consumers are looking to make investments in high quality, value added products that offer a real return, through energy savings and the good feelings that come from making a responsible/green purchase,” he says.
Challenges and competition
It is true that opportunities presented by such phenomena as pent-up demand spell an overall positive. However, the liner industry still must face certain challenges.
On the economic front, the possibility of an interest-rate increase causes uncertainty and reluctance by some consumers to take out home equity loans. Likewise, economic uncertainty is inherent in an election year.
Manufacturers face other challenges as well, most notably an influx of vinyl-liner makers into the market. This competition has especially heated up within the past five years, with safety-cover manufacturers fabricating vinyl liners and smaller companies entering the field, says Thomas Kennedy, marketing director for vinyl liner maker Tara Manufacturing, in Owens Cross Roads, Ala.
The increased competition, plus pressure from the use of less expensive off-shore vinyl, has lowered prices while raising the pressure on manufacturers, he says.
Adding to the challenge are rising installation costs, which some believe make the product less attractive, especially given tightening competition from the concrete and fiberglass segments. As vinyl and steel costs rise, the price advantage of package pools shrinks, causing some to opt for concrete or fiberglass, some say.
Subcontracting installation also puts vinyl pools at a competitive disadvantage, Kennedy says. Concrete and fiberglass pool dealers reduce overhead by hiring skilled subcontractors, helping them charge less. But fewer subcontractors are expert at vinyl liner pool construction, which means vinyl liner pool builders have fewer options to contract out the installation. “The Midwest and Southwest are beginning to show a decreased interest in vinyl liners due to the subcontractor network,” Kennedy says. As consumers lean toward buying concrete pools, more vinyl builders are diversifying into concrete construction to capture these sales, some say.
Manufacturers also see sales hampered by a problem dogging pool builders of all types — delays in the permitting process.
“Certain Northeast states can take up to six weeks or more to get a permit to install a pool,” says Eric Gohn, vice president of sales for Fox Pool Group, a vinyl-liner pool manufacturer in York, Pa. “This makes the mid-summer buyer consider waiting until spring because they will miss their swimming season.”
With increased information and engineering required, and certification and permit costs on the rise, the price of construction goes up. Some sales are postponed or even halted altogether.
“In a market where competition for discretionary dollars includes vacations, boats, RVs and such, it can be detrimental to the pool sale when another form of recreation is more easily obtained,” says T.J. Moreland, director of marketing and business development at Merlin Industries, in Trenton, N.J.
A growing challenge — and opportunity — for the vinyl pool industry is the Internet.
“Through online [research] and social media, consumers have seen all sorts of possibilities they can have in their backyards,” Sirco says. Often their wish lists are long and ambitious.
With an active and interactive presence on such sites as Facebook and Houzz, pool professionals are able to enhance their image as trusted experts and go-to businesses as well.
With several such tools at its disposal, producers say, the vinyl segment is positioned for a successful year.