Spa Tub Industry Has Seen Sales Fall By More Than Half Since 2004

Return with me now to the giddy days of 2004: The housing bubble was nearly bursting at the seams. The economy was roaring thanks to millions of people treating their homes like a giant ATM. The Iraq War wasn't yet considered a debacle. A cocky George W. Bush was confident of his reelection. And people were buying spa tubs so fast the industry couldn't keep them in stock.

Well, times have changed just a bit, as this article from the Los Angeles Times points out:

Amid the squeal of machinery and the hiss of plastic being molded, the Pomona factory owned by LMS Inc. turns out a signature California creation: the hot tub.

But the squealing and hissing have slowed in recent years, so much so that company President Casey Loyd says the operation these days is less like an assembly line and more like a hospital where "all kinds of babies are coming out at all different times," each a custom job.

"We don't build orphans here," Loyd said. "Every one of these spas has already got a home."

That's one way that LMS, which produces Cal Spas and other well-known lines, has survived an industrywide slump that began well before the recession.

Sales peaked at 417,000 units in 2004, according to the Assn. of Pool & Spa Professionals. In 2010, the industry saw a modest increase of 7,000 units from the year before, but those 182,000 sales came too late to prevent dozens of spa manufacturers from going out of business. The trade group is still gathering 2011 sales data, but officials are hoping for at least a slight improvement from 2010.

And yet, despite this dramatic drop off in business, hope still springs eternal in the industry:

LMS' 2011 market study, for example, showed that nearly two-thirds of spas are purchased by professional and technical workers, executives and upper management, healthcare professionals, mid-level managers and retirees. Look for the sweet-spot age group, 25 to 54, or as he puts it, "the people trying to become cool to the people trying to stay cool."

The least obvious guidance: Don't blow it by only focusing on the affluent. The sweet spot of the income range for spa buyers is $50,000 to $99,999 (34%), followed by $100,000 to $149,000 (29%). Sales drop precipitously at higher income levels.

They don't even call them "hot tubs" anymore, preferring the less libidinous "spa" label with its connotations of stress relief and health. A promotional video talks about company products as not for the rich, but for ordinary folks who want to create "lasting memories with family and friends."

Yep--bankruptcy is a great way to create a lasting memory for your family. Because that is where you are headed in this economy if you keep throwing your money away on frivolous expenditures like building your own spa.


Bonus: This should be the motto of the spa industry - "Life's been good to me...so far"