A Step in the Right Direction

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If you spend all day around hot tubs, and it's a safe bet that many readers of this article do, you've probably noticed a preponderance of up-market steps and surrounds for the spas you sell. The days of the lonely hot tub on the deck are over; today's customers seem to want all the bells and whistles. Many manufacturers are working hard to provide dealers a whole backyard package to offer their customers. The category has grown to include bars, seats, entertainment centers, fireplaces — you name it, you can sell it.

When did this trend begin. And why have manufacturers embraced it in such a big way. Twin trends of homeowner nesting and the popularity of outdoor living have both played a big role. Dealers looking for a way to set themselves apart from their competition could find the key with these elaborate products. "When someone comes in and they're making the decision between our spa and the spa down the road, it's hard, because there are so many brands out there, and customers really get confused," says Troy Derheim, owner of Tubs of Fun in Fargo, N.D., an AQUA 100 member and Cal Spas dealer. "Well, they come in and see our surround like that, and it accents it better, and creates more of a visual, it looks more inviting, and they're more likely to give up the money to buy it."

The Whole Package

As we all know, since 9/11, there has been a documented nationwide trend toward nesting, and now the attention that homeowners have lavished on the inside of their homes has spread to the outdoors, with people creating entire backyard environments. A lot of money is being spent to create the perfect backyard, and hot tub manufacturers have noticed. Cal Spas is one company that has spent a lot of time and money on elaborate addons. Anyone who was at the International Pool and Spa Expo in November 2006 couldn't help but notice that Cal Spas is doing just that. The booth was jammed full of elaborate surrounds, from fireplaces to wet bars.

"First of all, I think more and more, from new homes to remodeled homes, people are looking at the backyard as an extra room, an outdoor room," says Casey Loyd, president of Cal Spas. "Even new homes are now building slabs for them.

"Second of all, when they do their backyard environment, they don't want things to look like they were put there. It used to be you'd buy a box, put it in your backyard — it was all about a spa being a spa, right. It's all about having a spa in your environment now. The spa's not the feature; the spa's an added attraction. What we're finding is people more and more would like to have the exterior part of the product have more than a function of just being a box. And so we thought, well, let's make it blend into the backyard itself. It's really taken off, and we're getting a lot of demand for it."

Karen Hansen, vice president of customer service at Sundance Spas, agrees that customers are demanding accessories and surrounds that stand out. "It's not just about the box anymore," she says. "By focusing on interesting, distinctive pieces, we are providing unique opportunities for our dealers. The concept of affordable luxury has been embraced by the American public and is certainly a big part of the Jacuzzi and Sundance aftermarket programs."

Another factor in the popularity of outdoor rooms is the migration of people from the chilly North to the sunny South. "I think the southern market is growing, becoming a huge spot," says Derheim. "When I talk to some of the guys in Arizona, they say that they're selling those left and right — most every installation is getting that kind of product, whether it's built in, or it's a portable surround like that."

What is driving this backyard environment trend. Loyd says that today's nesting homeowners want to add not just value to their homes, but also enjoyment. "We want to be on the cutting edge," says Loyd. "We think that we will be able to add value to the home as well as pleasure to the living in it. We've felt that way for a while. The home resort logic has been our mission statement. People are just getting what they want with more and more style." The company has noticed and been increasingly focused on the trend for over a decade, says Loyd. "It really began for us back when I first came to Cal Spas in 1996," he says. "The idea was: How do we get the rest of the leisure dollar in the marketplace through our distributors that we presently have, and future distributors? So we started looking at outdoor kitchens, and we started looking at outdoor fireplaces, and we started looking at exteriors in the back of the home, and then we started putting them all together."

What's Hot?

As well as a focus on luxury, another big trend in steps and surrounds is away from wood and toward synthetic materials. While undeniably attractive, wood requires more work than many customers want, says Loyd. "Well, nobody wants to maintain it anymore," he says. "I mean there's no question about it, real wood looks very nice, especially when you look at that type of environment, but it just doesn't hold up well to the actual day-to-day wear and tear. It just looks dingy and old after a while, and you spent a lot of money, and then a year later, you have to go out there and sand and restain, or repaint. That's not what you're going to enjoy your backyard for. People don't want to buy something that's going to take a lot of work."

The most popular surrounds for Cal Spas in the last few years haven't even looked like synthetic wood. "The bigger ones are the rock exteriors that match the brickwork and rockwork of the homes," says Loyd. "They seem to be a big hit, because they take the look away from the box look." The entire backyard arrangement also plays a role in the type of surround a customer chooses. "It's not just a spa, it's also an outdoor entertainment room, seating area, outdoor kitchen — it's all being rolled into a big package," says Loyd. "So if I was going to buy a spa, I want the exterior of my spa, the exterior of my outdoor kitchen and the exterior of my home itself to all match. And what's hot right now are rock and brick."

Customer Reaction

If you build it, they will come — so the saying goes. But has it held true in the case of luxury surrounds. Depends on who you talk to. Loyd says customers appreciate being able to plan their entire backyard from just one store. "When you buy something, you like to go one place, so you can lay the whole thing out, and take in everything you want to do," he says. "We think it's more opportunity to get the leisure dollar into our retailers' hands. It keeps excitement, too. You've got to create excitement for your sales staff, the personnel."

If you want to sell surrounds, it's important to be in tune with what the customer is looking for. "We first thought about entertainment," says Loyd. "After you design the exterior of the spa itself, then you think of the gathering around it, the other uses for it, such as fire or entertainment, TVs or stereos. We introduced a water, fire and TV piece. When you look at it, it looks like a fireplace. You hit a button, and it's a TV. You hit another button and it's a fireplace, TV and waterfall."

"We haven't been selling a lot [of surrounds], but I think we are going to more in the future," says Derheim. "It's a great product, and you can give people the in-ground spa look as opposed to a portable spa just sitting out there. So I think it's a lot more appealing to people these days. Cal Spas is giving us products that are more affordable, where it used to be if you wanted a surround like that, you were paying almost as much as you did for the spa."

If he's going to sell an elaborate surround, says Derheim, it will be at the time of the spa sale. "I would say 80 percent buy it initially as part of a package," he says. "If we don't sell it right away, a few people will come back, but the majority of our sales are if we offer a discount for buying the complete package right now. Because when they come in, a lot of times if they're doing a new deck area, or doing a new patio, they have the vision of that right away. I haven't had people come in and say, 'I have a fiveyear-old spa, I want to add a brandnew surround to it, spruce it up.' I've had maybe two sales like that, where they've added on."

Thomas Chavez, general manager of Spas Southwest, Albuquerque, N.M., a Sundance dealer, says his store sells a surround about half the time initially, and half at a later date. Selling them at all, though, depends on their quality and how they're displayed. "We are selling more than we were four or five years ago," he says. "They've come a long way; the structure of them is a whole lot better than it used to be, and they last a lot longer, and I'll have it on the floor so people can see it as a package, and we'll offer it as a package, but then we'll break it out separately if someone wants it that way."

Derheim agrees, though he says the surrounds are a tougher sell overall in Fargo. "You definitely have to have it out so people can see it, and feel it and touch it," he says. "A person can make decent money at it, or you can hold your margin on your spa and give up some margin on the surround and sell it as a package. Overall it comes out to be a pretty good deal."

The nesting trend seems only to be getting stronger as people continue to pour money into their homes — and backyards. Selling surrounds, though not a sure thing, as Derheim says, will continue to generate income for dealers, and that's what's important.

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