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Recession Could Mean Less Discretionary Dollars For Pool Industry

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A Recession Could Mean Less Discretionary Dollars For The Pool Industry - Has the Pop Come?

Pool industry analysts are concerned that a recession could mean less discretionary dollars spent in the backyard over the next few years. In June, inflation increased to 9.1%, the highest it’s been since 1981. Today, the dollar is at a near 1:1 ratio with the euro. The last time there was a parity between the two currencies was 20 years ago. With questions of a looming recession, over 70% of Americans think we may already be in the middle of one.

If a Recession is Here, Has The Pop Finally Arrived?

The majority of financial analysts are convinced we already are headed for a downturn, according to Fortune. Consequently, many consumers have already begun to cut back on their discretionary spending, particularly for home improvement projects.

Consumers Appear To Be Cutting Back On Their Spending

A recent poll conducted by CreditCards.com showed that 47% of consumers surveyed said they don’t plan to increase their discretionary spending. Furthermore, Forbes forecasted that 7 in 10 people feel less confident making a major purchase than just 6 months ago. These numbers indicate confidence has sunk to pre-Covid levels and it appears that consumers have begun to curtail making larger discretionary purchases.

Belt Tightening in the Face of Rising Inflation

A Time of Belt Tightening in the Face of Rising Inflation

Gas prices surged to well above $5.00 a gallon throughout many areas of the U.S. on the heels of the situation in Ukraine. Prices have only now slowly begun to come back down. As of today’s writing, the national average for a gallon of gasoline stands at $4.57. Reportedly 26% of consumers have begun to belt tighten during conditions where they’re spending more at the pump as well as at the grocery store.

These cost-cutting measures to combat rising inflation are what we’ve seen occurring throughout the U.S. and indicative of what transpired in the years leading up to the Great Recession. Over 70% of economists surveyed by the Financial Times said they expect a recession to occur by the end of 2023.

While many organizations within the pool industry have reported record-breaking sales over the last two years, several quarters of decline have already begun to erode gains made during the pandemic. Rising costs of materials and a rapidly shifting consumer environment are predicted to impact sales through the end of ’22 and well into ’23.

Pool Industry Market Conditions Begin to Cool Demand

During the height of the pandemic, the industry experienced an explosion in terms of demand for new pool construction. Consumer interest in improving the backyard was at an all-time high as many were quarantining in their homes, avoiding travel, and choosing to reinvest in their outdoor living environment. Building a swimming pool became a top priority for many homeowners.

“Unprecedented Demand”

The term unprecedented demand suddenly became a buzzword on everyone’s lips during the pandemic. Builder and consumer confidence was suddenly at an all-time high. Those who truly know this industry can tell you that change happens at near glacial speeds during the normal run of things. To see a spike in demand the types of which we experienced was indeed unprecedented.

The facts are that inevitably what goes up, must come down. Nothing could be more true than how pool companies performed in the face of an economic downturn like the one that we saw during the Great Recession. The fact is that if things continue their current course we could very well experience an “unprecedented contraction” in the pool industry.

Pool Industry Stocks Plunge as Recession Looms

Inevitably, some of the largest firms have been the first to feel the changing economic climate. This is indicative by how stocks are performing across the board throughout the pool industry.

Swimming Pool Stocks Plunge as Recession Concerns Intensify

Presently, the Nasdaq is down roughly 29% YTD and the S&P 500, which had its worst first half since 1970, is off by roughly 19.5%. Consequently, it appears that a reversal of fortune for some of the largest pool companies has also been felt simultaneously. Since the start of 2022, the Big 3 are down an average of -43.21%.

Pool Construction Intrinsically Tied To New Home Construction

It is a fact that the pool construction industry is directly tied to new home construction. Given that a large portion of consumers who purchased a swimming pool over the past three years was based on pent-up demand in the market, new construction is needed to keep pace.

A Cooling Market & Rising Rates

As the market begins to cool, the trajectory for new sales takes on a different path that has led many analysts to reset expectations. Additional analysis showed during the month of May, the market for new home construction declined by 14%.

Pool Industry Decline - As the market begins to cool, the trajectory has taken a different path leading analysts to reset expectations

Higher prices, labor problems, and shortages of equipment and materials mean that building a home or for that fact, a swimming pool has ultimately become more expensive and for some is becoming out of reach.

Recession Conditions in a Housing Crisis

The ongoing housing crisis in our country means that in states like California where the median home price is now $797,000; a minimum annual income of $158,000 is required to qualify. The Fed’s plan to increase mortgage rates means that it will become even tougher to buy a home. This slowdown indicates that the housing supply will remain strained, leaving buyers under historic pressure.

Consumer confidence declined for the sixth month in a row in June, according to the National Association of Home Builders, a clear sign that the market is cooling down. Consequently, both builders and consumers are taking a “wait & see” outlook as rising mortgage rates continue to soften demand.

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Editor in Chief of Pool Magazine - Joe Trusty is also CEO of PoolMarketing.com, the leading digital agency for the pool industry. An internet entrepreneur, software developer, author, and marketing professional with a long history in the pool industry. Joe oversees the writing and creative staff at Pool Magazine. To contact Joe Trusty email [email protected] or call (916) 467-9118 during normal business hours. For submissions, please send your message to [email protected]

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The Indoor Ocean Where The US Navy Tests Its Ships

Take an insiders tour of the Indoor Ocean where the US Navy tests its ships.

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One of the world’s largest wave pools sits at the United States Naval Surface Warfare Center. They use the facility to create waves of specific sizes, frequencies, and amplitudes. Since 1962, the US Navy has tested all of its ships, platforms, and moored systems in realistic sea conditions at the Indoor Ocean in NSWC Carderock.

Approximately 240′ x 360′, the enormous basin is 20 feet deep and holds 12 million gallons of water. In addition, it also once held the record for having the world’s largest dome.

Indoor Ocean Used To Predict Ship Performance

The Navy uses the facility to predict how their full-scale ships will perform in the open ocean by testing their stability and control in a vessel that simulates real-world wave conditions. The maneuvering and seakeeping basin, also nicknamed (MASK) is where the US Navy tests its fleet. Built in 1962, and renovated in 2013.

The Indoor Ocean received an upgrade from 21 slow and inefficient pneumatic domes to 216 paddles. Consequently, today, operators have better and more independent control. With 99 percent precision, the results produced at the renovated facility provide far more realistic conditions than its predecessor.

NSWC Carderock is one of eight Naval Sea Systems Command Surface Warfare Centers. Credit: DOD

Engineers at the facility evaluate operability, ship motions, and efficiency. MASK researchers can then use this information to fine-tune a new vessel’s design to maximize its chances of achieving the desired level of performance. Testing also aids in establishing operational guidelines for the crew and ensuring the correct configuration of the ship.

The US Navy uses the Indoor Ocean facility at NSWC Carderock to conduct tests for the design of its fleet. Credit: DOD

“There are many different kinds of waves,” Calvin Krishen, NSWC engineer, said in a YouTube video uploaded by the Department of Defense. “Waves are different in different parts of the world and they are different depending if you are close to shore, or away from shore or whether you’re in a storm or not. We actually have the capability of programming all those different types of waves to test.”

Conducting Testing & Analysis To Create Better Ships

Engineers perform rigorous tests and manufacture vessels to a smaller scale in order to see how they will perform out on the open ocean. Based on the analysis conducted at NSWC Carderock, ship designers can make necessary adjustments to improve performance in real-world conditions.

Ship designers can make any necessary adjustments based off analysis conducted during wave simulations. Credit: DOD

How This Enormous Wave Pool Works

The machine that operates the wave pool consists of a paddle system that lines two walls of the pool. The system consists of 216 individual wavemakers capable of producing waves of varying sizes from -45 degrees to 135 degrees.

The paddle system is programmed for choreographed movement. It creates reproducible, perfect-sized, perfect-frequency waves. Force transducers create air bellows that go across the pool at specific angular motions. The motion is akin to fingers moving across the keys of a piano.

A series of choreographed bellows control the paddle system that creates the waves. Credit: Vertasium

There are wave pools located all over the world but what makes the Indoor Ocean unique is its ability to create reproducible waves of specific amplitude and frequency. Wave conditions vary in different parts of the world. MASK, however, is capable of mimicking the same conditions that exist during various times of the year in any location across the globe.

Paddles are programmed to create repeatable waves of specific frequency. Credit: Veritasium

Why The Need To Upgrade?

The old pneumatic-powered wave system used antiquated technology. The Navy requires a facility capable of performing the rigorous testing demanded by engineers In the past, the testing team sometimes had to relocate their models to the actual ocean and study the weather in order to recreate the perfect wave conditions.

Today, designers create models as large as 30 feet in length. Operators submerge them in MASK’s turbulent waters to simulate their future working conditions.

Data analysts conduct tests to see how ships will perform at sea. Image Credit: Licet Studios

Precise computer controls may be the most useful part of the new high-tech system. Testers can design a certain marine environment and tell the computer how to achieve it. Operators program a 3D model of the exact waveform they want to simulate.

“We can nail, at scale, the conditions all over the world,” said Jon Etxegoien, Head of Naval Architecture & Engineering, “So it’s not just that we can do some kind of rogue sea states, we can actually do the kind of seas they can expect in the North Atlantic, the South Pacific, littoral areas, that sort of thing. So that’s what gives us a real leg up. It’s not just some generic sea condition, but the specifics of where they’re going to be operating.”

Take a Tour Inside Where The US Navy Tests Its Ships

Does it shock and awe us that the United States military owns the best wave pool in the world? Not really. However, it does fill us with enormous pride to know that dedicated professionals perform the highest level of testing and analysis for the vessels that comprise our naval fleet.

Featured Photo Credit: Department of Defense

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China Claims Title For World’s Highest Outdoor Swimming Pool

New business tower in China has a pool with breathtaking views from the 71st floor.

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China Claims The Title For World's Highest Outdoor Swimming Pool

The title of the World’s Highest Outdoor Swimming Pool now goes to China. Construction of a new 1,322-foot-tall tower by Chicago-based architects Goettsch Partners is now complete in Nanning, China. The tower’s crowning feature is an outdoor swimming pool that, according to the architects, is the highest in the world.

Title for Highest Outdoor Pool Goes To China

The hotel’s pool on the 71st-floor terrace is 1,060 feet above the ground, making it the highest in the world. Previously, the 57th-floor infinity pool at Moshe Safdie’s Marina Bay Sands held the title.

Guangxi China Resources Tower claims the title for the world's highest outdoor swimming pool.
Guangxi China Resources Tower claims the title for the world’s highest outdoor swimming pool.

The Guangxi China Resources Tower, at over 2.93 million square feet, is the 18th tallest building in China and the 37th tallest building in the world. It is a mixed-use design that includes a hotel, office spaces, and retail.

More than 60% of the 86-story structure’s lettable space, or 272,000 square meters, will be occupied by offices. Approximately 6,000 square meters of retail space and a Shangri-La Nanning hotel with 336 rooms are also planned.

“The building is a symbol of rising prosperity for the city,” notes James Zheng, AIA, LEED AP, CEO and president of GP. “It further sets a world-class standard for quality that is meant to endure.”

The tower, developed by Shenzhen-based China Resources Land, will serve as the focal point of a brand-new 90-hectare urban quarter in Nanning. The podium and basement of the building are linked to the structures around it.

The hotel's infinity pool sits on the 71st floor of the massive sky scraper.
The hotel’s pool sits on the 71st floor of the massive skyscraper in Nanning, China.

Beginning in 2014, the building process will be completed by the end of 2020 (November). The company claims that the building is completely occupied and functional now that the interior fit-out is complete.

One of a Kind Panoramic Views

The hotel emerges atop the office volume, drastically altering the building’s profile. The lower volume is capped by a monumental terrace at Level 71, which serves as a one-of-a-kind outdoor sky space where guests can swim in the hotel’s pool. From sunrise to sunset, the sweeping 180-degree panorama offers unparalleled views of the surrounding lakes, parks, and mountains.

The tower is an essential part of a larger mixed-use development, and its design to LEED Gold standards places an emphasis on sustainable sites and energy optimization. The podium and basement levels of the various buildings work together to form a seamless network that is optimized for the greater master-planned development. Sunshades on the building’s exterior, combined with a high-performance façade enclosure system, allow for abundant natural light and breathtaking vistas to penetrate every level while significantly cutting down on energy consumption.

Mechanical systems have been developed to maximize the efficiency of operation, reduce energy and water use while increasing comfort levels inside the building. The highest quality materials are used throughout the structure to emphasize longevity and durability and lessen the building’s future impact on the local environment.

“The tower is a sustainable response to its urban context,” sayid Travis Soberg, AIA, LEED AP, in a press release. “The building integrates conservation methods throughout the design that reinforce our commitment to environmental responsibility.”

Photo Credits: Goettsch Partners

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Las Vegas Losing Classic Fire & Water Feature – Mirage Volcano Set to Close

Hard Rock confirms iconic Las Vegas fire feature, Mirage Volcano will close.

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Las Vegas Losing Classic Fire & Water Feature - Mirage Volcano Set to Close

The Mirage’s fiery volcano, which has been erupting regularly on the Las Vegas Strip for over 30 years, will soon cease activity forever.

Since MGM Resorts International sold the property to Hard Rock International last year, the resort has been undergoing a rebranding process, and the resort’s iconic volcano will not play a role in the new resort plan.

The time of the final eruption for the Mirage Volcano is unknown, and neither Hard Rock nor MGM officials would confirm exactly when the volcano would be dismantled. They plan to build another one of Hard Rocks guitar-shaped hotels in the space.

About The Mirage Volcano

When the resort opened on November 22, 1989, the volcano quickly became a fan favorite. A modeled three-acre paradise resembling the South Seas is routinely jolted awake by the ominous rumbles of the Mirage Volcano throughout the night. Rapid movement of water along with creative lighting resembles lava.

Exciting flames shoot over 60 feet into the air. If you’ve ever watched the show from the street, you can literally feel the searing heat. With music composed by Grateful Dead drummer Mickey Hart and tabla virtuoso Zakir Hussain, more than 150 Fireshooters, developed by WET Design (who also created the Fountains of Bellagio), propel fireballs in a dramatic choreographed display.

The volcano was one of the first free attractions paving the way for others like the pirate battle at Treasure Island, the light shows and concerts at the Fremont Street Experience, and the Bellagio fountains.

From 8 p.m. until 11 p.m., the volcano at the Mirage continues its hourly eruptions. We took the opportunity to see this fiery spectacle, perhaps for the last time, while exhibiting at the PSP Deck Expo recently. The street was packed with onlookers watching the show on the street.

Elaine Wynn, who was married to casino magnate Steve Wynn at the time, first came up with the idea for the volcano as a great way to differentiate the Mirage from the competition.

In recent years, however, Las Vegas has been shifting away from a transparently thematic approach with its newest resorts, including the Cosmopolitan (2010), Circa (2020), and Resorts World (2021), and its reliance on free attractions and loss leaders, such as buffets and poker rooms, to bring in the bustling crowds.

Las Vegas Residents Eager To Keep Attraction

There has been a running sentiment amongst casino insiders that free attractions such as the Mirage Volcano have turned into a drain on profits. In light of the news that the Volcano is slated to be removed, many Las Vegas residents have expressed they do not want to see the attraction go.

“When I heard the news, I remember just wondering why this was going to happen,” Alden Gillespy, a longtime resident of Las Vegas and critic of removing the volcano, told the Las Vegas Sun. “The fact that they were going to tear down the volcano, that hit me personally.”

Every time it goes off, the Volcano in Las Vegas draws in hundreds of people, both young and old, to the Strip. The idea of tearing it down has been met with pushback. A group of passionate residents in Las Vegas has banded together to compel Hard Rock International and the city government to stop the new owner from demolishing what they say is a historic landmark. A petition to protect the volcano has over 9,000 signatures of support.

Among those who think the volcano should be preserved is UNLV history professor Michael Green.

“We lost a lot of hotels on the Strip because of the understandable need to build better, more modern hotels,” Green told the Sun. “The volcano is a reminder of how it helped trigger the modern Las Vegas boom.”

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