Pool & Spa News: Raising the stakes: legalized gambling, affordable housing and an increased dem

In Des Moines, Iowa, where the cornfields outnumber the days in a typical pool season, John Mosher recently discovered an unusual trend in home ownership.

"I have friends who are Realtors," says Mosher, chairman of NSPI's Retailers Council and owner of Central Iowa Pool & Spa. "They tell me, 'We've got people looking for a home with a pool. Do you know anyone who wants to sell their home?'

"It never used to be that way here," Mosher adds. "If you had a pool in your backyard, you could forget about selling your house. As short a season as we have, a pool was not an asset to a home."

With low finance rates and many families fleeing to the Midwest to find more affordable housing, the times are a-changin' in the heartland of America. Although some areas of the region have been hit hard by a sluggish economy, many builders and retailers still see increasing demand for pools and related products.

"Our inground business is head and shoulders above what it used to be," Mosher says. "People go to their friends' houses with pools, and they decide they want to get one so they can entertain in their backyard.

"We've also had a lot of people move here from other regions of the country who have owned pools, and they want to get another one because they miss the one they had," he notes.

A sure bet

In other areas of the Midwest, the local economy has stabilized due to an influx of tourist dollars. For instance, Wisconsin recently legalized gambling. "It's affected us positively as pool builders," says Dave Kubiak, president of Pool Works Inc., in De Pre, Wis. "Obviously, when casinos and motels get built, pools get built as well."

The casinos, which are the second largest employer in the state, also provide more jobs to the local community. "We have a lot more people who are employed, and they have more disposable income to spend," Kubiak says.

For builders and retailers in more affluent regions of the Midwest, sales still surge upward even in a downward economy. In fact, homeowners in resort communities such as Lake of the Ozarks, Mo., gravitate more toward customization and automation, which may push the price of a pool project into the $65,000 to $95,000 range.

"A lot of the projects we're building in this area are for million-dollar-plus homes," says Rick Vaughan, president of Vaughan Pools & Spas Inc. in Jefferson City, Mo. "Many of them are second or third homes for people, so they have more money than they have time. As a result, the trend in our area is to have a maintenance-free pool.

"We're finding more of an acceptance of automation, from chemicals to cleaning, which people weren't necessarily taking advantage of five or 10 years ago," adds Vaughan, whose business is a Pool & Spa News Top Builder. "Now people want, ask for and demand it."

Cashing in on service calls

The recent demand for sophisticated add-ons--such as automatic pool cleaners, safety covers, controllers, infloor cleaning systems and remote-controlled systems, which range in price from $500 to $9,500 each--significantly boosts sales. It also opens up greater opportunities for service companies.

"All of these things need yearly maintenance, upkeep and service over time," says Guy Larsen, general manager at All Seasons Pools & Spas Inc., in Orland Park, Ill. "The companies that are realizing the growth are the ones that are staying ahead of the game."

Larsen, whose company is located in an area of the Midwest where unemployment is not as bad as other regions, still senses hesitancy among homeowners considering the purchase of big-ticket items. "It's sort of like people are waiting to see what's going on with the economy," Larsen says. "In other words, it's just not simple to open up every day and get lots of work."

One area of the Midwest, which has taken a direct hit from the challenging economic environment, is Wichita, Kan. The city has experienced more than its share of job layoffs due to the downsizing of the local aircraft industry.

Therefore, in addition to increasing their advertising budgets, many retailers take a patient but persistent approach to sales. "One of my associates just sold a spa the other day after originally making a proposal two years ago," says Rita Rowlen, co-owner of Ultra Modern Pool & Patio in Wichita, Kan.

"She just continued calling them on a periodic basis and touching base to see how they were doing," Rowlen says. "It's a low-pressure way to let them know that we're still interested in their business."

The slow but steady sales pitch eventually paid off. "Last week, the customer came in and bought a brandnew, $7,000 spa," Rowlen notes. "You just have to keep the product alive. It really pays to follow through on prospective and existing customers."

In My Shoes

By Dennis Flack The pool and spa industry in the Midwest still seems to be prospering, although there's a growing amount of competition. I've been in business four years now, and in that time, I've seen several new retailers opening in the area.

One way we compete is by using one-piece fiberglass pool shells. People in the Midwest have been slow to warm up to the use of fiberglass because they believe that freezing, cracking and pop-ups are still an issue with them. But we take great care to backfill our fiberglass pools and to ensure a proper fit.

Local competitors aren't our only concern, though. The popularity of the Internet has become our worst enemy, in many ways. A customer can buy all kinds of accessories--even an aboveground pool--on the Internet and have it delivered to their door.

We try to counteract this by stepping up our customer service; we want to show effort on our part. It's our policy to send a small gift to our customer once the job is finished, and to follow-up with a questionnaire. It may seem as if we're stroking the customer's ego a bit, but in this day and age, you have to be competitive because the customer expects a lot.

All in all, I've already begun to see rapid growth within the company. This past year, sales were down on aboveground pools and even spas. But inground sales were phenomenal--and, well, you can't buy an inground pool on the Internet.

Dennis Flack is a builder, retailer and service technician, and owner of Morton Aquatech Pools & Spas in Morton, Ill.