The great run of 2020 and 2021 seems to be slowing as higher interest rates and inflation are bearing down on demand for portable hot tubs, swim spas, and spas. Even though most hot tub manufacturers are still a year out for production of new hot tub and swim spa orders the demand is weaning from buyers due to economic concerns. This slowdown is forcing hot tub retailers and dealers to ramp up marketing efforts to keep sales coming in. During the pandemic the hot tub industry was reactive to huge demand requiring minimal marketing efforts due to the surge. Some manufacturers early in the pandemic were as much as two years out for production but now that supply is catching up as demand subsides due to higher interest rates and inflation. Also, many consumers who were once locked down in their homes are now traveling, taking vacations, going to gyms, and spas for recreation, health, and wellness. Hot tub dealers and retailer are going to have to go to their old playbook for advertising and marketing to keep customers coming through the doors.
There’s also the concerns with short terms oversupply for hot tub retailers as they were forced to place orders for inventory through the pandemic “in the dark” without knowing what sort of demand will be there 12-24 months out. This major disconnect and disruption between demand and production is sure to cause some short to medium term issues for retailers and manufacturers until things get caught up. For example, a dealer who typically sells 400-500 hot tub a year was experiencing major backorders in 2020 and 2021 meanwhile their sales were through the roof in some cases 25-50% higher than years past due to demand. These dealers were ordering product based on higher demand for spas they weren’t expecting for 6 months to a year all the while ordering hot tubs for upwards of 12-24 months out. Now that we are in nearly mid 2022 there’s a glut of hot tubs being delivered to dealers and demand has slowed. Hot tub dealers typically have smaller show rooms, little warehousing space, and tight cashflow which means they aren’t able to take shipments of hot tubs ordered 8-12 months ago which then causes a backlog at the hot tub manufacturing level. Needless to say it will likely be a messy back half of 2022 as dealers and manufacturers will have to work together to resolve these issues.