What signs of growth have you seen from the beginning of 2011 until now?
As a baseline, 2010 was the worst year I'd ever had in the pool industry going back to my start in 1992, so anything would've been an improvement. In 2011 I saw somewhere around a 25 percent improvement, which brought me back to a level where things aren't great but certainly better than what we were experiencing at the bottom of the recession.
What factors were behind that?
Here's what changed for me. Back in 1999 I decided that I wanted to be a high-end designer and builder. I wanted to always do bigger, better and more complicated projects. That worked for quite a while, even into the first two years of the recession. People with money were still buying pools and spending large amounts to improve their homes. So I didn't really experience the downturn at first. That changed in 2010 when the recession started impacting affluent clients. Work didn't exactly dry up completely, but it definitely dropped off to the point where I wasn't sure I could make a living.
So how did you respond?
I retooled the way I approached the business. For several years when I was focused solely on the high end, I'd explain to clients my thoughts on their project and if they didn't agree I'd politely step away. In 2010, I realized that I couldn't afford to take that approach any longer and adopted a much more flexible attitude. If they wanted a $30,000 pool, I'd help them get the best project possible within their budget. Some people might view that as a compromise, but instead I chose to look at it as an opportunity to use my abilities to work across a much wider range of projects. As a result I've done a greater number of projects, many of them for more middle class people.
Financing remains a huge problem, though. Last year, I lost at least 20 projects because the clients were unable to secure a loan. That really hasn't changed much as far as I can tell, although some people are saying that things have loosened up a bit. I'm no economist or financial expert, but it seems clear that we'll probably never go back to the days where lenders would make loans to people based purely on their credit history, regardless of whether or not they were upside down on their mortgages. Knowing that, I've changed the way that I do things. Nowadays I make sure clients are pre-qualified for a loan before we start the design process. Otherwise, you can waste a tremendous amount of time working on projects that have no chance of moving forward.
How has that affected the way you work with clients?
It's been helpful. In some cases clients find out, for example, that they can't fund a $60,000 project, but they can get a loan for $40,000. Once we know what kind of budget they have, then we can work together to create something within their price range.
In terms of design, what trends are you seeing?
Our company has been known for building outdoor dining areas, cooking areas, pool houses and gazebos — all features that enhance the overall outdoor experience. I think it's fair to say that we were ahead of the curve in that area, which has really served us well. It's come to the point where we've done projects where there are no pools.
How are things looking through the first part of this year?
So far, so good: We've started out about the same or perhaps a bit ahead of last year. The thing that you always have to keep in mind here in Texas is that the market is driven by the weather. Last summer we had 75 days of temperature over 100 degrees. That's been followed by one of the mildest winters ever. People around here remember how miserable they were last summer and with the warm winter they want pools. The big question is will this continue, or will it slow down if the weather shifts.
So you're hoping for another hot summer?
Not exactly: We're now in the midst of a drought with water levels in reservoirs at record lows. In some areas, local governments have already instituted restrictions for watering landscapes and draining and refilling pools, which has killed the remodel business. Now we're hearing that we may be facing a moratorium on new pool construction this summer, which would obviously be a disaster for the industry. In the meantime, there's no point in worrying about that. We should just continue to provide great outdoor environments for our clients.
