Once a pool is built, it needs to be serviced and cared for throughout its life. So while new pool construction has returned to prepandemic levels, the pool service and maintenance sector remains elevated and strong due to all of the new pools added during the pandemic.
For the past six quarters, the Pool & Hot Tub Alliance (PHTA) has been conducting quarterly research and publishing the data for survey participants. The Quarterly Pulse Surveys are brief and can be filled out on a person’s mobile device. The survey covers a wide range of questions focused on sectors such as construction and design, service and maintenance, and retail. Every quarter, participants are asked if they have seen an increase, decrease, or no change compared to the same quarter of the previous year across a variety of data points: revenue, bottom-line profits, project backlogs, new pool construction, portable hot tub sales, and more.
Survey participants then receive free quarterly reports in an online participant portal that compares their company’s data to aggregated data from the industry as a whole. The data can be adjusted to look at particular sectors and specific regions.
Continue reading to see the Q2 2024 results from the service and maintenance sector.
The Results
Nearly three-fourths (73%) of respondents in the service and maintenance sector reported an increase in company revenue, with almost one-third seeing more than a 10% increase compared to Q2 of last year. Regionally, the Southeast (76%) and the Midwest (75%) were more likely to see an increase in company revenue.
At the same time, 63% of participants also saw an increase in bottom-line profits. The Southeast stood out once again, with 73% of participants in that region reporting an increase. Interestingly, the Midwest reported the smallest number of companies (42%) who experienced an increase in bottom-line profits out of all regions, even though they reported the second highest in company revenue increase.
Where are the increases in revenue and profits coming from? At least 63% of service and maintenance companies from all regions of the United States reported an increase in the volume of both maintenance and service calls. In the Midwest, 78% of companies saw an increase in maintenance call volume, while in the Mid-Atlantic, 77% saw an increase in service call volume.
Another source of revenue for service and maintenance companies is remodel jobs. These jobs are not only for companies listing their dominant sector as construction and design! Overall, 47% of companies in the service and maintenance sector saw an increase in revenue from remodel jobs. The increase for service and maintenance companies in the Mid-Atlantic region were almost twice as high, with 80% reporting an increase. However, only 20% of those in the Western region reported an increase in revenue from remodel jobs.
Has the increase in call volume impacted staffing at these companies? Only somewhat. Just over half (56%) of service and maintenance companies reported that their number of employees stayed largely unchanged compared to this time last year, while 40% increased their staff. There was little variation from region to region, with the percentage of companies reporting an increase only varying from 38% in the Western and South Central regions, to 40% in the Southeast, to 42% in both the Midwest and Mid-Atlantic.
“We are still in a very, very good labor market period, and some of the pressure is starting to subside for the industry,” explains Scott Hackworth, president of Industry Insights, who partners with PHTA to conduct these Quarterly Pulse Surveys and interpret the results. “That’s definitely a good thing for business leaders and business owners who are trying to hire. It also reduces some of the wage pressure that businesses have been under. Overall, this is a good take for businesses.”
Overall Trends
According to the PHTA Quarterly Pulse Trend Report, which tabulates the responses since the surveys began in Q1 of 2023, service and maintenance companies have seen a steady increase over the past 20 months, with every quarter hovering around a 5% increase compared to the same quarter of the previous year. The one blip was in Q4 of 2023, where companies reported a 2.1% increase.
Bottom-line profits are also holding steady, though at a slightly smaller percentage. Service and maintenance companies report just over a 3% increase year over year each quarter.
Running a successful company does not make business owners immune from concerns, however. The same three responses to the survey question “What are the biggest business challenges that your company currently faces?” have been at the top of the results since the PHTA Quarterly Pulse Surveys began in Q1 of 2023. These challenges are ranked and currently stand at: 1) maintain profitability in the face of rising costs; 2) economic factors such as inflation, interest rates, real estate costs, and consumer spending patterns; and 3) recruiting and retaining skilled employees. These three choices rotate their positions within the top three every quarter but have consistently remained in the top three since the inaugural report in Q1 of 2023.
“It makes sense that economic factors would be towards the top of companies’ concerns, given the political climate and given that this is a political year,” says Hackworth. “We’re hearing a lot about the economy, and there are some true patterns out there that are impacting businesses.” This is not unique to the pool, spa, and hot tub industry — Industry Insights has been seeing this as a top concern in other industries as well.
“We do expect a couple more reductions to the federal interest rate,” he says, “and we do hope that that really does stimulate consumer spending, especially with the large-ticket items that require funding or loans,” such as pools, spas, and hot tubs.
Looking Ahead
Optimism is strong within the service and maintenance sector. In fact, 80% of participants believe their company revenue will increase over the next 12 months, while 74% are confident that their company is well positioned or somewhat well positioned to adapt and thrive in the face of industry disruptions or changes.
PHTA is also optimistic about future research capabilities. The PHTA Board of Directors and PHTA members are highly supportive of the association becoming the “go-to” source for industry research. PHTA currently publishes an annual Business Operations Survey, the Quarterly Pulse Surveys, and an annual Market Report. In 2025, PHTA will be producing additional valuable research products.
“The number of participants in our surveys continues to climb as more and more participants learn how the data can be used to improve their company's performance and see shifting trends in the marketplace,” says Jeff Henriksen, PHTA’s chief strategy officer. “A big effort PHTA is undertaking is to teach members and the industry how to use this data to drive day-to-day performance.”
Keep in mind that the data is only as strong as the survey participation. To learn more about PHTA’s industry research and to participate in the next Quarterly Pulse Survey this January, visit phtainsights.com.
