State of the market: portable spas are becoming increasingly mainstream. Today's models are armed with state-of-the-art features for a changing clientele

Pool & Spa News, March 28, 2005 by Shabnam Mogharabi

The TV commercial was simple: Robert Stuart was relaxing in a portable spa with his young daughter, acting out scenes from "The Little Mermaid." The reaction from the public, however, was overwhelming.

"Everybody who walked in the door said they had seen it," says Stuart, president/owner of Springs Spas and Home Recreation Inc., a retailer in Colorado Springs, Colo. "When we did advertisements talking about all the technical features and benefits of the hot tub, nobody remembered seeing them.

"But the family interaction angle connected with everyone," he notes.

In an era of backyard escapes, cocooning and conservative values, consumers devour any product that brings their families together. Portable spas are no exception. The therapeutic devices, which tout physical as well as psychological benefits, are more popular than ever, thanks largely to increased media attention.

"We're seen as a more legitimate product," says Chris Robinson, past chairman of the APSP Hot Tub Council and director of sales and marketing at Lucite International Inc., a Cordova, Tenn.-based manufacturer. "The options and offerings now range from the $2,000 spa sold at a big-box store to the $20,000 specialty swim spa.

"We have finally come into our own as a category," Robinson adds.

Industry veterans would agree. Portable spas have become a mainstream commodity. No longer a shell with a sprinkling of jets, today's spas attract consumers with enticing new features--some good, some fad. As a result, manufacturers and retailers are seeing the evolution of a marketplace and a boom in new consumer categories.

A maturing market

Unfortunately, few industry statistics track portable spa sales growth, and each manufacturer tells a slightly different story. Most contend that growth in 2004 was steady, keeping pace with the economy at an increase of approximately 4 percent in same-store sales. In 2005, the industry expects to sell nearly one-half million spas.

Several factors are driving the growth. For starters, the construction and refinancing booms are generating a solid number of first-time buyers. And the increasing availability of tax-deductible prescriptions for the product has turned the baby-boomer dream into a reality for many.

There's also been a steady rise in sales of mid- to high-end spas. "More people are staying home and putting money into their homes, and that's changed our business," says Warren Stefferson, vice president of Baja Products Ltd., a manufacturer in Tucson, Ariz. "We're in the process of redesigning our 2005 line to move our high-end [sales] even higher by adding more pumps, jets, lights and controls."

The greatest impact on today's portable spa market has come from the media, though. Reality TV shows such as "The Bachelor" and "Extreme Makeover: Home Edition," combined with the appearance of portable spas in sitcoms, commercials and even rap songs, have raised the public's awareness of how enjoyable the product can be.

It motivates current spa owners, as well.

"[They] watch these programs and think to themselves, 'I ought to upgrade,'" says Jerry Pasley, vice president of sales in the Spa Division of Jacuzzi Brands Inc., in Chino, Calif. "We, as manufacturers, have created an incentive to upgrade through new features and benefits."

As a result, consumer acceptance of the product is at an all-time high. "It's definitely gone from those small niches to a consumer-accepted commodity," Pasley says. "However, our biggest challenge is still that 90 percent of the customers fall in the category of never thinking about it."

Yet those who are out shopping for spas are more educated than ever before. Manufacturers say that today's spa customers are the most informed they've seen in 10 years. By accessing data online, they form their own opinions and decisions without ever entering a store.

Despite these universal trends, there were some regional sales differences last year. "I would say the South in general has been strong because the North has had some wet, cold winters, which can hurt sales," says Bob Hicks, national sales manager at Leisure Bay Industries, a manufacturer in Orlando, Fla.

"With the hurricanes in the Southeast, we had a momentary blip in sales that was soon overcome by people getting replacement products for things that were damaged," Hicks adds.

None of this means sales in the next few years will be stagnant. With a household penetration of less than 5 percent, there's plenty of room to increase market share. Bob Hallam, the CEO of Dimension One Spas Inc., a Vista, Calif.-based manufacturer, predicts between 8- and 10 percent growth industry-wide in 2005.

Changing demographics

The majority of spa customers still can be described as families of four, with the parents ranging in age from 35 to 54. However, the fringe groups--baby boomers and younger customers--show a stronger presence, demanding smaller spas and more upscale designs.

"The two-person spa is, by our data, sold primarily to the older demographics, though we are seeing younger folks more than before," says Jim Van Fleet, president of Mainely Tubs, a retailer in Scarborough, Maine. "One of the things any good dealer has to do is take trade-ins.