COVID-19 has changed the way people live and work. It also had an impact on the cost of swimming pools in the last few years. The price of a swimming pool inground has risen by approximately 30% since 2021. The pool industry was hit by an unprecedented demand during the peak of the pandemic. This was due to factors like quarantining and the limited travel options. Pool builders were inundated with orders as consumers wanted to create their own relaxing oasis. In the post-COVID economic environment, however, the industry has to adapt to new challenges. These include price increases on materials and rising interest rates.
Changing Consumer Behavior
As a result of the pandemic, many people decided to improve their homes, including installing swimming pools. Bob Mellon of Signature Pools & Spa, in Fresno CA, says, “That is one of the hardest thing that I think has come out of COVID, which is the price inflation.”
Mellon continues, “Our equipment cost has increased by 4% in the last few months and will continue to rise.” Our cement costs have gone up. We had shortages during COVID. All of the materials we cannot control have increased in price.
Adaptation To Inflation And Rising Interest Rates
Builders are adapting to the rising cost and minimizing its impact on customers. Mellon says, “One thing we have done is to try and be more efficient.” We are trying to tighten up our profit margins and can do this by streamlining the company. Pool builders work harder to keep costs down and prices low.
Mellon points out that the landscape of financing has changed. “Where banks gave out loans very freely a few years ago, they are now turning down some.” The government is raising interest rates to combat inflation. This has a negative impact on us.
Pool Construction Lead Times
Customers faced long lead-times during the height of the pandemic. Some customers had to wait up to six month between signing the contract and starting their pool project. The supply chain was disrupted by the massive demand. The post-COVID world has experienced a recalibrating.
Mellon says, “Right Now, we are building pools in four to six weeks, from the day of digging to water. Pool builders have worked hard to streamline their processes, adapt to the changing landscape, and provide more efficient service for customers. Mellon admits to allowing for delays and changes, including material shortages or weather conditions.
A New Reality
Morgan Stanley economists recently predicted that after years of substantial spending by US consumers there could be a “hangover effect” on consumption, which would ultimately slow down the economic growth. The months ahead will see American consumers facing several obstacles, such as the return of student loan payments, the decline in savings accounts and the stricter lending criteria imposed by the banks.
Although the pool building industry is more accessible, consumers should not expect to see a price drop as a result of the factors listed. The industry has been under increased pressure due to inflation, rising costs of materials, and changes in financing options. Mellon says, “We are trying to help the customers with pricing and with our services.” We’re going into a slower time. “Our numbers are off compared to last years”, attributed a decline in pool sales to rising costs, concerns about the recession, and higher interest rates.
How pool builders are adapting to inflation
Diverse strategies and approaches are being used by pool builders to adapt to the changing economic climate. Builders are using the following methods:
- Price Adjustments Some pool builders had to raise the price of their service to reflect increased costs for materials and labor. To maintain customer trust, it is important to communicate these price changes in a transparent manner with the clients.
- Clauses in Contracts: Builders may include clauses to allow price adjustments depending on the fluctuating cost of materials. This protects against unexpected price increases.
- Diversification Some pool builders diversify their offerings. Some pool builders may offer related services such as remodeling or landscaping. Diversification of revenue streams can stabilize income and reduce dependence on pool construction.
- Integration of Technology: Using technology and software can improve project management, scheduling and resource allocation. This will increase efficiency and reduce costs.
- Skilled Labour Training Investing in training and developing skilled labor can increase productivity and help reduce the dependence on subcontractors. This can help manage labor cost more effectively.
- Supplier negotiations: Developing strong relationships with suppliers will lead to favorable terms and discounts for bulk purchases, as well as priority access to material, reducing supply chain disruptions.
- Payment and Financing Options: By offering flexible payment and financing options, you can help make pool construction affordable. This could offset the effect of rising interest rates.
- Market Research and Adaptation : Pool builders can adapt their products to changing market demand. If the market is demanding smaller and more affordable pool designs, for example, builders may adapt their offerings to meet changing demand.
- Customer education: By educating customers on the advantages of their pool selections and how these affect long-term operating costs, higher initial costs can be justified and more efficient pool features and designs encouraged.
- Insurance and Risk Management : Pool builders can review and update insurance policies in order to protect themselves from unexpected costs such as delays with projects or material price increases.
The post-COVID economic environment has led to significant changes in the pool industry. These changes have affected both pool builders and consumers. Consumers are now spending less, compared to the unprecedented demand during the COVID pandemic. Pool builders have adapted to the changing economic climate. Prices remain high due to inflation, despite the fact that lead times are improving. Analysts predict that discretionary spending and investments in new pools will continue to moderate over the next few months.
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