Labor, supply chain and inflation remain key concerns, not to mention a potential economic slowdown, as pool and spa pros head into 2023. But what changes are pros making in the new year to combat—and even benefit from—these industrywide concerns?
Here’s a look at five ways pros are changing their business practices in 2023 along with the specific strategies they’re employing:
1. Raising prices. Thanks to ongoing inflation and supply chain challenges, 2023 looks again to be a year of fluctuating and increasing prices for core pool and spa supplies, according to Craig Sears, president of the Sears Pool Management, a pool management and renovation firm in Atlanta.
“Chemical costs are increasing more than projected in 2022, and some continuing to rise for 2023 (namely bleach, which is the primary agent we use to chlorinate our customers’ pools). Labor costs for our maintenance and lifeguard staff also are increasing substantially, so we have no choice but to increase our prices to clients, in order to remain a profitable and viable business,” Sears said.
2. Increasing wages and improving benefits. The labor shortage is likely only to become more acute in the new year. That’s why pros need to rethink how they attract workers, starting with wages and benefits, said Allen Jerabeck, a pool and spa specialist with Tarson Pools and Spas and chair for the Pool & Hot Tub Alliance’s WAVE Young Professionals Network. Jerabeck also was PHTA’s Young Professional of the Year for 2021.
“Many people might argue that there isn’t a ‘labor shortage’— but rather, there is a shortage of companies paying a livable wage. Does your company offer benefits like health insurance or retirement programs?” he asked. “Pool and spa technician can be a tough job, and a laborious one at that! Would you want to lift heavy containers of dangerous chemicals for $7.25/hr. without any health insurance? It’s not 1985 anymore, and companies simply won’t attract employees with a ‘bootstraps’ mentality.”
He also said companies need to take a hard look at their workplace atmosphere and make necessary changes to create a more attractive environment.
“If you suffer from high turnover, then culture is likely a contributing factor,” he said.
3. Changing service options. The combination of labor and cost issues are also a good reason to rethink and refine service options, said Dan Lenz, vice president of All Seasons Pools, Spas and Outdoor Living, who’s been in the industry more than three decades.
“We’re looking at all the services we offer and concentrating on those services that have the best financial gain, even to the point of eliminating some long-offered services to long-time clients. Given our limited available labor, especially in our service division, it only makes sense,” Lenz said.
As an example, Lenz said he had to stop taking on new weekly maintenance customers well over a year ago and started a waitlist that's over a year long. In previous years, he offered this service on a weekly or every other week basis to anyone.
But this year, new clients are only being taken on if they commit to weekly service, contract for opening and closing—and purchase all chemicals from All Seasons.
4. Finding new revenue streams. Another way to fight cost increases while hedging for an economic slowdown is developing new revenue streams. Lenz is taking a multi-pronged approach first by charging $1,500 for remodeling estimates. If a bid is accepted, the fee gets applied to the final cost.
“In the past, we would develop the method and often have people used our methods to contract with different subs,” he said. “This way, at least we’re getting revenue for our time.”
Lenz is also developing a “much more extensive” pool and hot tub inspection process “and will be charging a fairly significant fee” for the service.
To justify those costs, he’s certifying a dozen employees in PHTA’s Certified Pool Inspector course, including sales staff.
“On short notice, we want to be able to provide a high-quality report, but mostly be the first ones in the door to provide quotes to repair or replace anything we find deficient,” he said.
5. Containing operational costs. Another way to absorb rising costs is through lowering operational costs. For Sears, that means shrinking his service area to reduce transportation and labor costs per customer.
Along with containing costs, such a move is also a boon for customers, he added.
“This allows us to provide better service by operating tight routes,” he said. “We have seen our competitors doing the same, which I think is healthy for the industry.”