The Pool Service Industry: Riding the Next Wave of Growth
The swimming pool service sector has shown impressive resilience and healthy performance despite facing pandemic-related headwinds over the past few years. As the economy rebounds into growth mode, key indicators point to further expansion on the horizon for this $10 billion industry.
Backyard Oasis Fueling Demand
The allure of an at-home vacation oasis has driven robust construction of new pools, especially in warm climate states like Florida, Texas, Arizona and California. According to new data reported by Pkdata.net, over 131,000 new in-ground swimming pools were installed in 2022 – marking a 12% jump from the prior year.
The volume of new pool installations only continues to rise annually. As more backyards add pools, the need for professional maintenance services scales in tandem. Between cleaning, repairs, water chemistry balancing and specialty services – new pool owners depend on qualified service technicians to keep their investments swimmable year after year.
While the pandemic temporary dampened some discretionary service spending, demand for pool upkeep quickly rebounded as consumers prioritized home and outdoor living upgrades. The pool service sector revenue expanded by a moderate 2.5% in 2022 to $10.4 billion. Market research predicts the broader recreational water service industry will sustain 4-5% average annual growth between 2023 to 2028 – signaling steady tailwinds.
Labor Shortages & Cost Pressures
For pool service businesses, taking advantage of growing demand remains challenging given labor and material constraints. A major shortage of qualified technicians and drivers makes reliably staffing service routes an uphill battle.
Many operators report losing 10-20% of annual service revenue due to inadequate staff to cover all client needs in peak seasons. The lack of specialized technical skillsets also limits capabilities for service upgrades or repairs requiring advanced certifications.
Apart from labor gaps, pool service players have been saddled with surging operating expenses from fuel to replace chemicals to fleet costs. Reduced access to traditionally imported materials from China also led to supply chain knots. The cumulative impact of inflation means trimming margins on existing business just to retain hard-won customers.
Service Diversification & Efficiencies
Top performers in the pool service space have mitigated economic obstacles by taking three adaptive approaches:
1. Offering Additional Services – Expanding into complimentary services like pool remodeling, conversions, accessary installs, outdoor kitchens and lighting allows crews to generate more billable hours and revenue per client.
2. Investing in Technology – Fleet tracking, automated water testing sensors, remote pool monitoring and mobile payment solutions all drive back-end efficiencies that reduce costs over time for sizable operators.
3. Exploring Financing – Given huge demand and construction backlogs, some large players extend financing packages to ease customer access to new pool builds or refits – allowing them to land major projects while the market is hot.
Consolidation Heats Up
The pool industry remains extremely fragmented – with over 140,000 maintenance, repair and build contractors spread across the domestic consumer and hospitality/club space. The top 50 pool service companies still only represent about 20% of total market share today. This lopsided, hyperlocal structure makes the sector ripe for consolidation and roll-up plays.
In fact, merger and acquisition activity has recently spiked amongst regional pool service chains looking to expand territory, backyard builders seeking vertically integrated service networks and private equity firms keen to assemble national brands. Multi-location operators specifically have become acquisition targets given benefits from economies of scale plus taking proven processes and programs systemwide. Notable recent deals include:
- River Pools and Spas acquired by BMSI and Morgan Stanley Capital Partners
- scrX acquired Aqua Pool Dealer to form one of the country’s largest pool service companies
- KPS Capital makes strategic investments in BioLab and Mission Pools
While no ‘pool super chain’ has definitively emerged just yet – large players are certainly jostling and depositioning to make a play through aggressive M&A pursuits. As estate planning needs arise for potentially thousands more solo entrepreneurs and small firms over the next decade, conditions indicate the pool industry could witness a sizeable sea change through market consolidation.
Innovation Advances Customer Experience
As pool service outlets balance growth plans with economic realities, many aim to differentiate by focusing on the customer experience. Service leaders understand smart tech integration and online communications provide a major opportunity to set themselves apart.
We’re seeing more brands offer lifestyle-focused content from backyard living ideas to pool design inspiration to drive engagement beyond service bookings. Companies are also building out robust customer portals for self-service like scheduling, payments, and document access to make working with the business seamless for clients.
Using cloud-based software platforms to traditionally pen and paper operations also helps pool service professionals drastically improve route optimization, inventory management, customer database access and overall efficiency both in the field and office.
While labor and cost headwinds persist as part and parcel for the service industry, pool maintenance players confidently expect demand tailwinds plus operational improvements will buoy revenues going forward. In particular, tech-savvy regional operators and qualified acquirers will likely continue consolidating market share. But even smaller pool techs focusing on delivering five-star service have room to thrive – as long as they ride the next wave strategically by embracing innovation.
