Custom builder Mike Giovanone isn’t worried.
Despite the fact that his volume has slipped approximately 20 percent from last year, 18 percent of those lost sales came from deals with home builders.
“That’s a relief to me because I can identify it as a [response to the housing market],” says the president of Concord Pools in Latham, N.Y., a Pool & Spa News Top Builder. “If it were across the board, I would be concerned.”
Even in a down year, Giovanone has found customers willing to pay an average of $30,000 to $40,000 for a package pool.
But high-end work remains the lifeblood of many builders.
On a recent $60,000 vinyl-liner project, Giovanone added a $200,000 waterfeature with 400 tons of natural stone and boulders. The project includes three waterfalls, a swim-in grotto, a 40-foot water slide and a diving rock. Though it came from a kit, the project is almost indistinguishable from a gunite pool.
This trend is sweeping the category, as homeowners aim to maximize their discretionary dollars. But it’s also just one of several factors — including regional differences, new competition and technology — that are driving the category into new directions.
More than 85 percent of all pools sold in the Northeast each year are vinyl-liners, according to industry experts.
In the Southeast and Midwest, those numbers dip slightly, to about 75 percent. In Canada, vinyl-liner pools comprise approximately 90 percent of new residential installations.
“People think a package pool is a great investment,” says Mike Gibson, national sales and marketing director at ALPS Manufacturing Inc. in Norcross, Ga. “They’re not buying a vinyl-liner pool because they can’t afford a gunite or concrete pool. They’d just rather put that $40,000 or $50,000 they saved on the pool itself into the rest of the backyard.”
Customization has grown by leaps and bounds in recent years as requests for free-form or radius pools mushroom.
“A greater number of pools are being sold as a result of our ability to design anything [for a package pool] you can find in gunite: wedding-cake steps, benches, swim-outs, free-form shapes and in-pool slides,” says Mark Laven, president/CEO of Latham International in Latham, N.Y.
Advances in computer aided design (CAD) and computer numeric controls (CNC), which are used to fabricate steel components in the kits, mean more freedom and versatility of design for package pools. Production, as a result, has become more efficient and cost-effective.
Elsewhere, newly developed construction techniques allow for the placement of real tile around the edge of vinyl-liner pools.
“We tell manufacturers what we want, and they get it back to us exactly the same, which makes for a more exact project and gives our product longevity and endurance,” says Tom Murr, president of Mermaid Pool, Spa & Patio in Anderson, Ind.
And several manufacturers now offer online ordering, which also helps cut the turnaround time of projects because dealers can place orders around the clock. A liner, for example, can be turned around in as little as three days; in the past, a builder might wait a week or longer.
Murr uses an online system from Latham International called iPool, which eliminates errors as soon as orders are placed. The system contains a built-in monitor that automatically notifies Murr if the specs don’t add up. He can track the order from the cutting and seaming table to package and shipping, all in real-time.
It’s slashed his turnaround time in half, Murr reports, enabling him to more accurately forecast, plan ahead and schedule projects long-term.
Package pools are traditionally tagged as the affordable alternative to gunite.
However, today’s builders are offering a growing array of features, including spillover spas, automated controls, salt-chlorine generators, in-floor cleaning systems and heaters.
In fact, 30 percent to 35 percent of the vinyl pools Giovanone installs include waterfeatures, which on average add $20,000 to $25,000 to the project cost.
In addition, he says, 30 percent include spillover spas, 70 percent automated controls, 40 percent in-floor cleaning systems and 60 percent sun shelves.
And virtually all of Giovanone’s pools are installed with salt chlorine generators and heating systems.
“A builder can put in a $25,000 pool and turn it into a $150,000 to $200,000 job, depending on how they landscape the backyard,” Bradley says of projects that make use of plants, lights or waterfeatures.
Higher-end decking is another fashionable choice, as is stylish, bendable aluminum coping for free-form pools.
Though the current trend is toward more elaborate package pools, Laven predicts the category gradually will return to its roots: lower price-points and simpler designs.
“There is a lot of real estate development of tract homes with smaller backyards,” he says. “I think the vinyl-liner pool has a lot of opportunity there.”
In fact, despite tighter profit margins, Giovanone will devote 2 percent to 5 percent of this year’s gross sales to marketing efforts.
He is currently developing a large, all-inclusive advertising campaign — a departure from his mostly upscale clientele — with the message, “A pool for every budget.”
In today’s economy, even a custom high-end builder must aggressively pursue new avenues, Giovanone says. So he is now targeting the budget-conscious, middle-of-the-road consumer with entry-level packages around $30,000 vs. the mostly $50,000-and-above projects he marketed in the past.
“People have money, but they are being frugal and cautious,” Giovanone says. “We need to shake them off the fence. But they’re worried about falling too far. So we can shake them off a lower fence [with a lower price point].”
It’s been a tough year for builders and manufacturers. An early cold snap in the Northeast combined with persistent rains in the Midwest only exacerbated the situation.
What’s more, these days it helps if your customers don’t follow the news.
The faltering housing market, credit crunch, debacle on Wall Street, and high commodity and fuel costs directly impact consumer confidence — and their willingness to buy. Even those with money are playing it close to the vest, Giovanone says.
This year more than any, he’s competing with anyone and everyone pulling discretionary dollars from potential customers.
He’s diversifying into other industries, such as landscaping and masonry, to make the most out of every job. He’s even begun building storage units for boats and RVs.
But most pool professionals agree that the nation’s economic woes are temporary. Markets should rebound when home-building ramps back up and credit markets loosen.
When that might happen, however, is anyone’s guess.