Discussing The Pool & Spa Industry 2024 Business Operations Report With PHTA CEO Sabeena Hickman

With just under 4,000 members, the Pool & Hot Tub Alliance is the definitive national trade organization representing the entire pool industry. Recently, the PHTA published its 2024 Business Operations Survey Report, an annual benchmarking tool containing critical business insights for the pool and hot tub industry. To get a sense of what is in the report, how pool companies are using the data and the general sentiment of the industry, we spoke with PHTA President and CEO, Sabeena Hickman.

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PHTA 2024 Business Operations Survey Report: Data-based decision-making helps pool companies make more accurate, measured decisions. Purchase the 2024 Business Ops Report to generate real-time insights and predictions that will help you optimize your performance.

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Transcript

[00:00:00.320] - Joe Trusty - Pool Magazine:

Thanks for joining us on another episode of Pool Magazine Podcast. I'm your host, Joe Trusty, and today, joining us, we have Sabeena Hickman, CEO of the Pool and Hot tub Alliance, a leading organization in the pool, spa, and hot tub industry, dedicated to promoting safety, education, and Professional Standards. It's a pleasure to have you with us today on the show, Sabina.

[00:00:21.200] - Sabeena Hickman - PHTA

Well, thank you, Joe. It's awesome to connect with you. I usually see you at every trade show event with your beautiful publication, so really excited to be here.

[00:00:30.700] - Joe Trusty - Pool Magazine:

Well, I'm thrilled that you were able to take time out to be with us today. I wanted to talk with you a bit about the state of the industry. But before we dive right into the topic of today's discussion, I thought maybe a proper starting point would be if I first had you talk a little bit about your role with the PHTA, who your organization serves, what your mission is, and maybe some of the activities that the PHTA is involved with that aim towards the betterment of the industry as a whole. 

[00:00:56.500] - Sabeena Hickman - PHTA

Yeah, I'd love to talk about it. I love talking about PHTA. I joined PHTA almost five years ago. I'm going to hit my five-year anniversary here next week in early September once NSPF and APSP unified. Our organization is the only national trade association that represents the pool and hot tub industry. We've seen some really strong growth since the unification. We're sitting right under 4,000 corporate members, and that's about a 25% growth since the unification. We pride ourselves on three core pillars to educate, advocate, and elevate for the industry. Some of our signature programs are obviously under education. What We do with Genesis, training for builders, designers, and engineers. We've expanded that educational program and created Pathways so that folks can get different levels of certification from CBP all the way up to master CBP. We blended the program from Genesis and what APSP used to do. We're seeing great traction in that. We educate close to 800 professionals a year, which is really exciting. We have the ability to do that because we also do virtual courses. Our courses are 2-3 days long, and we do those virtually, and we also do them on demand.

[00:02:22.990] - Sabeena Hickman - PHTA

In fact, last week, we did the construction course in Spanish, which was really exciting. We got a Spanish translator and had about half a dozen Spanish-speaking students on that call. We also do a lot with the service CPO, obviously, the service sector. We have certifications tied to that, partnered with Cornell to do emerging leaders and executive leadership. But this industry, as you know, Joe, is so hungry for education, so we want to feed that hunger. Right now, our board is working on a new initiative called the Center of Excellence. What we want to do is we want to create that educational destination for the industry and provide different ways to learn and teach on a more expanded learning management system. We've been at it for probably six months doing a lot of discovery surveys, and We're hoping to launch that in 2025. The two words that come to mind when we talk about center of excellence is obviously affordable and accessible. Our goal is to raise the professionalism in the industry. Under Advocate, we had a gentleman by the name of Justin Wiley join us, and we consolidated government relations standards and codes, and he oversees the technical side of the house.

[00:03:40.130] - Sabeena Hickman - PHTA

He came from the International Code Council, and we do so much more than we've ever done before. We've got an extensive plan for standards. I think we have four of them going at the same time. He's working on energy issues, drought issues, decarb. We just put together our government relations A survey just went out about a week ago to get input from the industry in terms of what our agenda should be, what they need us to focus on. Then we've also got lobbyists in California and Texas, and obviously partner with Nesva, who have lobbyists in all of their regions. As you guys know, we also have invigorated this Step into Swim program. What that program is, is it's led by Rowdy Gaines, who we all know and love and enjoyed watching in the past couple of weeks. Calling the Olympic Races. But that, did you watch it?

[00:04:36.160] - Joe Trusty - Pool Magazine:

Yeah, I did. That was awesome.

[00:04:38.310] - Sabeena Hickman - PHTA

I mean, you get... Rowdy is a distraction, though, because you watch the race, but then he distracts you because you want to watch how animated he is. So, yeah, he's done a great job with that. When we first brought the organizations together, we were so proud. We raised about $150,000. And what that program does is we grant money out to swim schools. There's an application process, and they create swimmers in underserved communities. Children who don't have access to the water, can't afford swim lessons, will raise over a million dollars this year, and we've already granted out $1.2 million impacting 30,000 children learning how to swim. That's really been a fun program that the industry has really rallied around. Then last Last but not least with Elevate, that's our certification programs. Everybody knows our signature CPO program. We are putting about close to 40,000. We certify each year. We've got an amazing talented group of 700 instructors that go out and teach for the foundation. Natalie hood has been really spearheading that. Now, she's overseen all the certifications, and we're seeing a lot of uptick in our certification numbers there. As you said, Joe, you probably summarize it best, we're here to serve the industry and do what's in the betterment of the industry.

[00:06:10.460] - Sabeena Hickman - PHTA

I feel as if we've evolved in terms of not just being a member organization, but out there to serve the industry. I think what we're going to talk about today is one of our biggest initiatives under Elevate the Industry, and that's research. We started our research program about a year ago, and we're going to invest more in research. Our board. We've got a board of 15 volunteers that represent all segments of the industry. They really want to see the organization be the source of the truth and really get good data about the industry and share that with everybody.

[00:06:46.530] - Joe Trusty - Pool Magazine:

Well, thank you for some of that background information, Sabeena. I know that PHTA has a lot of different arms that are part of your overarching mission to help elevate the industry. When we get to talking about stuff like the economy, it's all If you're reading the paper or you're doing an internet search, you may see a hundred different forecasts out there. I know the PHTA keeps engaged with its thousands of members in the forms of polls and surveys to assemble these reports on how the industry is dealing. In fact, you have a new report on the site for business ops that contains a lot of key data points and metrics pertaining to the pool and hot tub industry. I'd love to pick your brain a bit and ask you some questions about some of the findings in this year's report.

[00:07:27.090] - Sabeena Hickman - PHTA

Yeah, of course.

[00:07:28.620] - Joe Trusty - Pool Magazine:

Can you maybe give us maybe a a high-level overview of some of the key findings contained in the 2024 business ops report?

[00:07:36.230] - Sabeena Hickman - PHTA

Yeah, sure. Happy to. This is our second edition of the business operations report. We fielded that this year in February and kept it open through April. This year, we had nearly 500 respondents. The first year we did it, we had about 186, but we had 500 respondents. What we do when we do it is we want to ensure that we have even distribution across the country so we can draw conclusions regionally in terms of how the industry is performing. We break the responses down by the segments: builders, designers, remodelers, service maintenance and repair, and also the retailers. What we're seeing in this year's report, there's also a webinar, I believe, that we have posted on our website as well. We work with an outside firm called Industry Insights, which ensures that all the data is confidential. We never see who's filling out what. There's a webinar on there that gives an overview. If anyone's interested, go visit our website and you can hear firsthand about it. But in the 2024 report, we definitely saw a growth this year for the service sector. What we conclude from that is all the new pools that were built during the pandemic, maybe homeowners tried to service it themselves because there were still some shutdowns, but people are returning to work now full-time.

[00:08:59.090] - Sabeena Hickman - PHTA

They're actually We've seen that they don't have the time to maintain their pools, so they're turning to service pros to open their pools, maintain the pools, close their pools as needed. We are expecting, as we're out of the pandemic, that bubble has popped and sales will probably return to normal pre-pandemic levels. We're seeing some slight reductions in pool build. What we're hearing from the folks who fill out reports and from other sources is consumers are There's high interest rates, inflation is up. Other studies show that there's been a pent-up demand for travel. Where our industry can compete with travel, RVing, boating, we're seeing some people looking to spend that disposable income maybe on taking a trip because they weren't able to during COVID.

[00:09:52.200] - Joe Trusty - Pool Magazine:

Right. Like you hit on before, I mean, travel and that pent-up demand. We saw two years of solid lockdown where people were just stuck in their house. I mean, that desire to get out of the house and take that trip, go to Disney World with the kids, that's been suppressed for two years. So yes, we are seeing a lot of the same things. But what trends or patterns did you observe in the report that you feel could be significantly impactful on the industry?

[00:10:19.540] - Sabeena Hickman - PHTA

Yeah, sure. Before I go to that, I want to plug something. There's initiative that's just started, and it's called Pool Horizons. And I'm part of that. What happened is some of the leading manufacturers in our industry, the big three, they watch data and see trends, live and die by it. They said, Hey, this bubble is going to pop and we need to get out in front and we need to talk about the benefits of pools, how it impacts communities, the health and wellness aspect of it. We have an aging population. Pools play a role in that. We want to talk about what this industry doing on the sustainability, environmental side. Then we also want to talk about the role that the industry plays in drowning prevention. We want to tell our story. We've got a great story to tell. When you look at our They have GoRveen and Go Boating. They've got an outwardly facing campaign. We're just getting started on that. There's four work groups. I am tied to the Drowning Prevention, but they're all working to come up with case stories, talking points. They want to start being more coordinated in terms of the benefits of pools.

[00:11:39.870] - Sabeena Hickman - PHTA

There will be a meeting in Atlantic City. Joe, obviously, would love to have you there. We're going to be getting invitations out to the industry, but it's just a great calling to bring the industry together and really work towards, like I said, telling our story. We've got a great story to tell. Before that escape me, I just wanted to Look at that. Okay, patterns that we saw in this report that could impact the industry. Obviously, 2024, several challenges. The top concerns for all companies, pretty similar to 2023. Economic factors is top of the list. Inflation, consumer spending. A close second were concerns about thin profit margins with rising cost of equipment, materials. Many service pros have kept their pricing steady for customers while perhaps the cost of chemicals or equipment may have risen. So a word of caution, look at your pricing, especially for the service sector. And while an unemployment is on the rise, There are more candidates available. Recruiting and retaining employees is right up there with the top three concerns for the industry. PHTA is trying to help with that. We've got our work in aquatics website. And what What we've done with that, Joe, is we've partnered with an outside PR firm to really talk about the industry.

[00:13:08.310] - Sabeena Hickman - PHTA

Why do you want to work in this industry? That was drawn from... We had a small task force that worked on it. It talks about career paths, a day in the life, what my salary potential is, and it's got a free job board. If you're a member of PHTA, you can post an ad for free, and we put PR. Com dollars behind that to get people to the site. We're trying to help our members out with that. I think we have about 700 jobs posted on there, and then five times as many applicants or people visiting the site to learn more about what this industry offers. Recruiting and retaining employees, that's not unique to our industry. I think a lot of industries face that. But my observation with this industry is people love what they do. Every day is different. It's not you're behind a desk. You're out there creating or maintaining beautiful backyards or building commercial pools or designing something unimaginable that your client wants. People in this industry love what they do, and we really want to promote that sentiment with work in aquatics.

[00:14:21.830] - Joe Trusty - Pool Magazine:

Well, do you see any of the current economic climate conditions that we are currently facing right now, maybe influencing the data and conclusions that are represented in the report?

[00:14:32.400] - Sabeena Hickman - PHTA

We've seen things shift, like very subtle shifts. Nothing really jumped out at us. Now, the 2024 report, I will tell you, recap's the previous year of 2023. We launched the survey in February because folks are closing out their... Assuming most are on a calendar year, they're closing out their year and their book. The sentiment for 2024, business operation survey Recaps 2023. In order to address what's taking place real-time, we also do a quarterly pulse study, which is more anecdotal. It's a survey that you can fill out on your phone, maybe 5 or 10 minutes, and it just measures the sentiment. That's just our way of tracking to see if there's any swings, any shifts in what folks are worried about. Obviously, you remember when the talk of the town was a supply chain, they couldn't get the supply. PVC, wood was going up. So that's obviously not number one. Maybe 18 months, two years ago, it was. But we also have deployed a quarterly pulse study that we send out every quarter to the industry to just get a pulse check on how they're feeling.

[00:15:47.600] - Joe Trusty - Pool Magazine:

Thanks for that, Sabeena. And sure, I understand that the reporting cycle covers what happened the previous year, but can you maybe explain how the findings in this most recent report might influence pool companies and their strategic thinking moving forward? Yeah.

[00:16:00.150] - Sabeena Hickman - PHTA

If you participate in the survey, which I highly recommend, we selected Industry Insights because what you can do is once you've inputded your information, you can actually go into this portal and benchmark your company against other companies in the region, nationwide, how you're doing, and you can drill down as deep as you can. There are some people, like your old company with Premier, who are so comfortable with research. They can analyze it. They can make business decisions. We also have some folks that have said, Hey, listen, I filled out the survey. Now, what do I do? We're setting them up with industry insights to help them figure out how to use that as a business. As a business tool. I think for a lot of them, we've got, like I said, we had 500 people fill it out. I think we were seeing them really go in and using it to benchmark their companies to see how they're performing. Then from there, I'm assuming meeting internally with their management team to see where they should be making adjustments. Then that's also the power of Trade Association. It also enables you to talk to peers that may be in a different market or you don't directly compete with and get some insight from them on what they're doing.

[00:17:24.300] - Sabeena Hickman - PHTA

At this year's Expo on Wednesday, we're going to do a general session, and we're going to have the CEO of Industry Insights. He's going to share some of the latest information from our studies. Then we're going to have a panel of members that participate in the survey, talk about what they're doing. I'll moderate that. I think it's going to be very insightful. I'll tell you, for instance, I talk to Charlie Claffey with Claffey Pools, who's on my board, and I say, How's it going? And he's like, Oh, we got hit with the first quarter of the year. We have a lot of making up to do. What adjustments did you make? I think it's going to be a really interesting session. What we want to do, too, is we want to teach our members how to use that data to make better business decisions. I think there's a range of companies that use data and make business decisions off of that. But I think it's going to be really exciting to see. We're hopeful that the numbers will grow. We're seeing more activity in the portal. I know our manufacturers and distributors like the access to the portal to see what's going on.

[00:18:39.990] - Sabeena Hickman - PHTA

It's been a really fun initiative to see take off. Again, we launched our first one last April, so we're a year and a couple of months into it.

[00:18:48.720] - Joe Trusty - Pool Magazine:

How do you anticipate the report's insights are going to influence future industry trends?

[00:18:54.680] - Sabeena Hickman - PHTA

We feel as if the industry is elevating as a result. Our response rate continues to from quarter to quarter and with the business operation survey. It tells us that people are getting more engaged. Our purpose here at PHTA is to elevate the industry, and that's why we're giving free access to the data. Those who participate get free access. Like I said, if you take the time to answer the survey questions, we give them all the data in return. The business operations survey does take a few hours to fill out, but the questions and data sets are developed so, say, pool builders can measure their own performance against the industry, either in their sector, region, or nationally. You, as a business owner, have to be financially successful and obviously service your clients. If you ask the question, are you running a profitable business? Are you making money on an annual basis? That's the fundamental question for any business owner. We look at profit margins, gross profit margins, number of pools built, company sales volume, number of employees. We actually look at the sales per employee, revenue per unit sold, new pools versus remodels. As you know, remodels were big last year, and the list goes on. 

[00:20:15.320] - Sabeena Hickman - PHTA

There's more than 75 data points that help pool owners, service pros, retailers measure their success against others. Joe, we also, every year, we go back and look at the survey to make sure we don't have to tweak any questions. We've got a standing committee of board members who focus on that. Again, 75 data points, you can drill down pretty deep and you can look at almost anything you want to. I think we added two or three questions this year because we got feedback from respondents saying, Hey, it'd be really great if we could find this out. As you, Joe, I know that you geek out on research. If there's anything in there or any listeners feel that we can do to enhance that with a question, feel free to reach out to myself or Jeff Henriksen on the PHTA staff handles research for us and does a phenomenal job with it. We're actually looking to create some more assets for the industry in 2025. 

[00:21:20.360] - Joe Trusty - Pool Magazine:

Based off of the report findings, do you feel like all company owners and respondees give you a sentiment that the economy is improving, that it's flat, that we're looming into a recession? I mean, what sentiment did the overall findings give you? 

[00:21:38.680] - Sabeena Hickman - PHTA

Yeah, we're hearing on a pretty consistent basis that they're busy, but they don't have the same backlog as they may have had. We're hearing that if their construction was down last year, they made up for it in remodeling, but that's starting to level out. We are seeing builders who are diversifying and starting to create a service arm within their construction company. Anecdotally, they say, I build the pool and then I walk away, but I've built this relationship with my customer and I want to be there to service the pool. We know the pool, we've built it. Then retail might be another opportunity for builders. Maybe they become full service. We saw in this last report more companies that do all three than we did in the first report. So I don't know if more companies are diversifying and taking it all on or if they are, we just had more people respond. But it's really interesting to see some builders really look to expand and add service to their service offerings?

[00:22:49.910] - Joe Trusty - Pool Magazine:

I personally don't feel like we're in a recession. I mean, I know one of the prevailing factors that determines whether you're in a recession or not is, do you see an increase in GDP or not? In 2023, there was a 2.3% increase in GDP. I know that perception is reality a lot of times, but the prevailing factor that drives our industry, just new home construction, was down significantly, even though we had an increase in GDP. That's why you may be feeling it on the construction side, but it's expected to rebound this year. I think that exactly what you said, that service is going to continue. People still need their pool service. That's never going to change. But we did see a construction post-COVID, and that was to be expected. 

[00:23:32.800] - Sabeena Hickman - PHTA

Yeah. I do still think there's good optimism. I think you're seeing the average price of the pool has gone up, but they don't want to price it out. But you look at the market report, Years ago, the average price was, I think, 60,000, and now it's climbing up to 90s. You also look at some of the pools. Our Awards of Excellence, some of the pools in people's backyards look like resorts, right? Sophisticated with the design and also with what clients want in their backyard. It's interesting to see. What are you hearing from your readership and your vast connections in the industry?

[00:24:14.780] - Joe Trusty - Pool Magazine:

I mean, pretty much everybody's leads are down. Web traffic and interest and search volume and the pool sector is down, but we're not in a recession. And that's just the fact of it. I mean, Q1 GDP is up 1.4%, Q2 GDP is up 2.8%, set. Numbers are numbers. I mean, so whatever it feels like, perception is reality for a lot of these guys in the hole. I mean, they're looking at what's coming through the door and what they're closing on their bottom line, and it's hard to refute that.

[00:24:44.870] - Sabeena Hickman - PHTA

California keeps us very busy with all the regulations. If you can wave your magic government regulations wand, we'd really appreciate it.

[00:24:55.340] - Joe Trusty - Pool Magazine:

Well, the tail does wag the dog in California. I mean, it all starts with the state legislature and I know you guys do a fantastic job at lobbying for the betterment of the industry. So hats off to you guys on for what you're doing on that front.

[00:25:06.880] - Sabeena Hickman - PHTA

Yeah, we're so lucky to John Norwood. I'm sure you know him. He's up there in Sacramento. We, I'll say, inherited him through CPSA, but he's like our little watchdog. He watches it all for us and has great connections and counsel, but it's a busy agenda. California keeps us busy for sure. 

[00:25:27.930] - Joe Trusty - Pool Magazine:

Well, I really appreciate you taking time out to today to connect with us. Share your expertise. I really enjoyed our discussion and having you on the show today. 

[00:25:35.330] - Sabeena Hickman - PHTA

Yeah. Well, it's an honor. We love what you guys do. I always get excited when I see you guys at a trade show because you have such a beautiful publication and just as beautiful as your wife. So tell her that. But we love seeing you guys. It's great. You guys, I mean, you were in the industry for so long that now you just get to write about it and really showcase. I mean, you guys find some really cool stories that across the pond, like what folks are doing in other areas. I know you're having fun because every time I see you have a smile on your face and look forward to bumping into you here in the fall. We'll all be packing up our suitcases and jet-sitting to the next industry event. Thanks for all you do, Joe.

[00:26:18.770] - Joe Trusty - Pool Magazine:

I appreciate all that you guys do as well. And for those listeners interested in reading the PHTA business operations survey report, it's available through their website at a substantial discount for PHTA members. We'll have a link to where you can purchase that in the podcast notes. Thank you for connecting with us and for liking, subscribing, sharing, following, and we'll catch you next time on another episode of Pool magazine podcast.

Download the 2024 PHTA Business Operations Survey Report