With the shortage of available data, it’s difficult to know precisely how hot tubs have been selling. However, based on their own performance and anecdotal information, manufacturers estimate that sales rose industry-wide in 2018, seeing an increase in the high single digits. Those who reported double-digit growth last year attributed it to company initiatives and believed they exceeded industry performance overall.
The good news: They’re looking forward to similar growth for 2019. The bad news: The weather needs to let up first.
“All manufacturers I’ve talked to, including [acrylic makers and OEMs], everybody is down 35% so far in the first quarter,” says Wade Spicer, president and owner of Strong Spas in Northumberland, Pa.
The dealers he has consulted, including big-box outlets, also report slower-than-normal sales.
Concerns also spring from expected delays in tax returns, as government agencies adjust and adapt to new tax reforms from the White House.
But these are very temporary roadblocks. When Spicer shared his observations, it was early March, so the first quarter still had a few weeks left.
“We’re just now starting to see an increase in sales, so hopefully that trend holds,” Spicer says. “I think when the weather breaks and the tax returns get back, we’re going to see a push forward. All signs that I can see say it’s going to be a strong year overall.”
On a more macro level, the news is even better. Mike Dunn, executive vice president of Watkins Wellness in Vista, Calif., says the industry is approaching pre-housing-bubble performance.
“2018 might have gotten us close to where we were in 2004, which was the peak,” he says. “So if we’re not at it, we’re close to or approaching it.”
As hot tub manufacturers look forward to another positive year, they discuss some of the trends, opportunities and challenges facing this product category.
Manufacturers aren’t seeing substantial changes in the sizes or price levels of portable spas that sell.
No one category is outpacing the other, however there have been some micro-trends. With the economy continuing its gradual incline, some manufacturers see a slight trend toward mid-range and luxury models. This follows several years when buyers were more prone to purchasing value hot tubs than they were before the Great Recession. Additionally, the industry is seeing a small uptick in sales of smaller models, as more couples and individuals join the ranks of empty nesters.
Perhaps more pronounced are the growth curves experienced in two sub-categories other than the mainstay acrylic spa. First, swim spas continue on their rise, manufacturers say. “I see that growing at double-digit growth, continuing this year,” says Lynda Livingston, vice president of PDC Spas in Williamsport, Pa.
Cal Spas reported a drastic increase in swim spa sales, which nearly doubled in 2018 over the year before, says Shiva Noble, executive vice president of the Pomona, Calif.-based manufacturer. “And it doesn’t look like it’s going to stop this year,” she says.
Consumers understand swims spas better, and more have become sufficiently familiar and comfortable with them to purchase, these professionals say. Smaller families and senior citizens have become more likely to view this product as a practical alternative to an inground pool/spa combination, Livingston adds, while athletes see them as a training option.
But swim-spa manufacturing does not integrate seamlessly into existing production lines. They’re made differently, with the inclusion of fiberglass backing, different vacuum-forming systems and significantly larger machines. So they won’t come off the production lines as quickly, either, Spicer says.
So manufacturers are looking for ways to more easily fit this product category into their operations. Strong Spas doesn’t make them, but if it were to enter that market, it would probably come by acquiring an existing operation, Spicer says.
Cal Spas has been moving a different direction, Noble says: “We run the swim spas on the same [production] line that we run our regular hot tubs,” she says. “We don’t have to have a specific line or specific people, so it removes that extra cost.”
Sales of rotationally molded spas also are on the rise, Spicer reports. His company has experienced much higher demand. Part of that comes from the fact that competition is limited, he suspects, but familiarity with the lower-priced category also accounts for the growth.
As with many pool and spa products, the hot tub category is riding the wave of the Internet of Things (IoT).
The ability to connect a portable spa fits well in line with a primary manufacturer objective — making the product as easy to manage as possible.
But to a certain extent, makers and users are still figuring out exactly how this connectivity fits in the scheme of hot tub use. Many consumers associate IoT with the ability to heat their spa using an app, so it’s ready for use on demand.
“But the reality of a portable spa is it’s hot and ready all the time,” Dunn says. “So ... there’s a myth in terms of what consumers think they want it for against the category and how it actually works.”
So far, the biggest success and most utility have come from using IoT to monitor the condition of hot tubs, says Dan Sjoblom, vice president of marketing for Salt Lake City-based Bullfrog Spas. But he expects to see more advancement in the ability to care for spas through automation.
“We’ve done a good job getting connected,” he says. “Now it’s time to really start being more creative about what we can do with that connection to the internet. I think a lot of that has to do with water monitoring and water care.”
Producers also may need to find ways to make the technology more affordable, he says, so it falls in line with the lower cost of a hot tub relative to a swimming pool. While it’s possible to automate a portable spa as much as a pool, the cost can seem too high for a product that costs less, he says.
Designs have progressed significantly in the last couple decades, with cleaner lines to fit with modern architecture, and more modest profiles to fit in more seamlessly.
Still, Sjoblom believes the industry has more work to do to help the products blend into the backyard. With the industry being relatively small and young, it doesn’t have the finances of some others. Additionally, some developments in materials haven’t reached the industry yet. And the sheer size and profile of hot tubs presents a challenge. In this respect, the thing that makes a portable spa attractive — its freestanding configuration — can serve as a weakness.
The industry is doing well with those consumers who either like the appearance of hot tubs or who see the benefits outweighing any aesthetic reservations, Sjoblom says. “But there is, we believe, a large segment of the market that is qualified to own portable spas and interested in the idea of hot tub ownership, but are struggling with the way that it fits into their backyard,” he says.
But Sjoblom sees advancements working in the industry’s favor on this front. Man-made materials are evolving rapidly, he says, with products such as ever-more-convincing synthetic woods and stone being developed. Companies that make these materials also now take more of an interest in working with the hot tub industry as it grows and evolves.
“So I expect over the next few years that we’ll see a lot of really nice advancements in the look and design of these products,” Sjoblom says.
Manufacturers report that the Baby Boom generation continues to account for a majority of hot tub sales, as this group ranges in age from 74 to 55. Generation X is becoming more significant to the market, as more than half has reached middle age, ranging from 38 to 54 years old.
Portable spa manufacturers continue to monitor the millennial generation to see how these products will fit into their lives.
The key question: Will millennials purchase homes? This has had the entire pool/spa industry on watch, as the generation has been slower to purchase than their parents or grandparents. But the last couple years have proven encouraging, with reports that those born between 1981 and 1996 are buying more houses, even if mostly entry-level.
“We expect them to accept the product like previous generations have,” Sjoblom says. “Had you asked us that even two or three years ago, we may have waivered a little bit. But our confidence in the millennial generation and future hot tub ownership among millennials is getting stronger all the time.”
While the homeownership question has had many industry professionals on edge, the generation has shown certain preferences and priorities with which the category should fit nicely, says Kevin Richards, vice president of sales and marketing for Master Spas in Fort Wayne, Ind.
First, this group takes health and wellness very seriously. “And millennials are looking for experiences,” he says. “A hot tub can provide a great experience — it can make them feel better, it can add value to their life as they spend time with friends and family. So it’s the message that we want to put out there to the public: If we’re selling a hot tub as wellness, therapy, stress release and a great experience, I think we can do okay.”
Overall, Dunn is banking on millennials experiencing the same life phases as their parents, with hot tubs becoming part of the equation in later years.
“I certainly think that millennials will be our customers,” Dunn says. “This product tends to sell demographically through life stages and age. Over all these years, I still think we see that the numbers tell us that the 45-54 [age group] and the 55+ is where the bulk of the market is.
“The big question is: What are they going to want and how are they going to want it to be delivered to them?”
While we know this group likely will require the most advanced technology and automation, and that they probably will be more conscious of energy conservation, Dunn suggests the industry needs to take a wait-and-see approach to determine whether they will want all the bells and whistles that appealed to their predecessors. “They may not want all the frills that we put on products,” he says.