Spa rental programs

by Sally Bouorm | March 1, 2012 10:19 am

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By Geoffrey Dixon

“Can I borrow your hot tub?” is a question most are not accustomed to hearing; it almost sounds out of place. Times have changed, however, and the roto-moulded portable spas available today have not only made it very easy for people to simply ‘borrow’ them, but also for dealers to rent them to customers.

Hot tubs have been around for thousands of years and the concept of a portable hot tub that is light enough to move is not new either; however, it was not until the last decade that other portable spa options—other than soft-sided and inflatable—became available, which lent themselves better to the rental spa market.

Many people at some point have experienced the euphoric effects of a hot tub, whether at a friend’s house or at a hotel while on vacation; yet, for those who do not own a spa, but are interested in purchasing one, they may have various questions and few definitive answers.

Dealers that offer a spa rental program can provide customers with these answers as well as insight into various other intangibles before investing in one. By allowing the customer to rent a spa and take it home, it can also provide simple solutions to things they might not even thought about.

Defining portable, ‘rentable’ spas

Advancing technology, particularly in roto-moulding, has made full-sized roto-moulded spas, or spas with a ‘unicast’ plastic shell, relatively inexpensive to manufacture.

The upside to this manufacturing method is the strength, durability and lightweight of the finished product. This is not to say soft-sided or inflatable spas do not have a place in the market, they do, but when it comes to ‘rentals,’ the longevity of the product, under multiple-use conditions, may stress the spa beyond its intended use.

For the purpose of this article, and to clarify some misconceptions, all ‘portable’ hot tubs are not actually portable, nor can they all plug into a standard 110-volt household outlet.

Some groups classify any spa that can be moved, regardless of the effort required, as portable. The roto-moulded spas discussed in this article are truly portable, which means two people can move the unit (without specialized equipment) in a pickup truck or with a light trailer.

A 225-kg (500-lbs) acrylic or fibreglass hot tub, which requires a 220-volt electrical connection to operate, is, for the purpose of this discussion, not portable. These hot tubs are generally too heavy to move without equipment and require specialized services to complete the install, usually in the form of a poured-concrete pad and the need for an electrician to connect the power supply.

Spa rentals benefit dealers and end users

Roto-moulded portable spas have not only opened a new demographic within the spa industry, primarily due to lower price points; zero preparation before delivery; and expanded placement options, but they have also spawned an entirely new category for retailers—spa rentals.

The ability to offer a spa rental program serves a number of purposes, both for the dealer and end user. From popular party spas, where a unit is delivered to a residence for a celebration or special occasion and removed a week later, to practical applications, which allow potential spa owners to ‘wet test’ a spa in its intended environment—the customer’s home, under the conditions they intend to use it.

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The portability factor of these spas has had a major impact on overall usage, as they fit into an evolving family and lifestyle and can be moved from the city to the cottage or from the back deck to the lawn. Many of these spas are round, so limited lifting is required. It is simply a matter of standing the spa up and rolling to its new location.

Today, some spas sell for more than $20,000, and there are a variety of styles and finishes to choose from. In many ways, purchasing a spa can be likened to buying a new car. Not many people would invest that kind of money in a new car without test driving it first. Therefore, offering customers the ability to rent a spa and take it home enables them to determine ideal placement, as well as make sure other family members will also enjoy it. For example, a customer may think the best spot for their hot tub is 9 m (30 ft) from the back door of the house. However, when winter arrives, not only does a path to the spa need to be shoveled, but in -20 C (68 F) temperatures, the trek from the spa to the back door can be further than imagined.

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Renting a spa can also be beneficial to those who already own a larger spa and are thinking about repositioning it. By renting a spa, the homeowner can place the rental in the new space, try it out and reposition it further, if necessary, so when it is time to move the larger spa, the homeowner can make an informed decision.

All spas are not created equal

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There are a number of portable spa manufacturers and each have a varied selection of sizes and colours to choose from. Although those looking to rent a spa cannot be too picky when it comes to colour, the spa’s size should be considered, especially when factoring in the number of people that will be using it. To prevent as much water displacement as possible, a customer should consider a six-person spa to be comfortable for four and a four-person spa suitable for two-to-three bathers before the water will reach its threshold.

Another important consideration, especially for customers who are renting a spa, is the length of time it will take to heat the water. Once plugged in, a portable spa will typically heat the water at a rate of 1.5 degrees per hour. For example, if the spa is filled with 15.5 C (42 F) water and the end user is looking for 38.8 C (102 F) water, then a temperature rise of 42 degrees is required. Factoring in the time it will take to heat the water, the spa should be ready by the next day (approximately 28 hours).

This is an important consideration as some models are only capable of raising the water’s temperature by half a degree per hour. Using the same water temperatures as above, it will take approximately 88 hours or just under four days to achieve the desired bathing temperature. Thus, the consumer is required to extend the rental period.

Further, spas with less than 1.5-horsepower pumps and one kilowatt heaters are often filled with hot water by the renter due to the time it would take to achieve the desired water temperature.

Setting up a spa rental business

First, dealers must determine their objective. Is the plan to make a living solely on spa rentals, or is it an add-on to the existing business? In either case, a dealer will need to have a number of portable spa units available, and a means of delivery.

Whether the decision is to make spa rentals an extension of the existing business or a standalone enterprise, the quantity, size(s) and style of spas that will be offered is a key consideration.

Rent only business model

For the ‘rent only’ business model, it is necessary to offer a wide range of spa sizes—from two bathers up to as many as 20—to accommodate a variety of consumer needs. Further, it is important to stock a large inventory of spas, considering consumer demand tends to fall on dates of consequence (i.e. Christmas, Valentine’s Day, Super Bowl, etc.). At Christmas for example, it is unlikely for a dealer to have enough spas to accommodate the demand; however, during 35 C (95 F) weather in July, one or two spas may be more than enough.

Expanded business model

If the spa rental business is an added feature to the existing pool/spa offerings, then the quantity and variety of spas available for rent is not as critical. Renting spas will develop its own revenue stream or at least pay for itself, as the primary purpose is to capitalize on the ‘try before you buy’ factor (i.e. wet testing), which helps to encourage the consumer in purchasing a spa. This also gives dealers a leg-up on the competition.

Still within the framework of an add-on to an existing business, a spa rental program can also be a valuable tool in appeasing a client or situation that called for a spa that is back ordered or a spa repair that is waiting for parts.

Last but not least, the promotional significance of spa rental program is invaluable. For example, these spas are relatively easy to drop off at a special event, which can provide great publicity, or offered as an in-store promotional prize, where a customer can win a free weekly rental.

Show me the money

How does a rental program make money? For example, if the wholesale cost of a good portable spa is approximately $3,000, and the average weekly rental rate is set at $300 per week (low), then simple math shows the spa only needs to be rented 10 times to breakeven. On average, a single spa can be rented approximately 26 weeks. At $300 per week the per-spa revenue is $7,800 per annum.

The rental rate for a four-to-six person spa is typically $350 to $400, while the rate for larger units with specialized features can be set upwards of $800 per week/weekend. The length of the rental period also plays a factor on the rates; however, a typical rental period is one week.

Further, a quality spa will last several years without any major additional investment. In terms of maintenance, the total cost of replacing the pump, heater and top-side controller would not exceed $1,000. A durable polyethylene spa will easily have a life expectancy of six to 10 years, so profit per spa is exponential.

Other considerations

The remaining factors for consideration are staff training, cost of chemicals, transportation, service and cleaning.

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Another attractive aspect of the portable spa rental business is that staff training is minimal and one employee can easily manage deliveries and pickups. The spa can be transported without difficulty using a snowmobile trailer or pickup truck and once on site, it is simply rolled into place, filled and plugged in.

The dealer can fill the spa with water or even offer the spa with hot water; however, neither is mandatory for success. In terms of chemicals, these can also be offered with the rental program as it is rare for water to go ‘off’ within a week of being filled with clean water, thus it is not necessary to supply the renter with an overabundance of water treatment products.

Finally, rental spas can also be sold. Considering the spa’s base cost is approximately $3,000, and the retail price point is approximately $4,500, it is possible to achieve additional profits over and above the rental revenues already generated.

 

 

 

Geoffrey Dixon is the director of sales and marketing at Rotospa Hot Tubs, a manufacturer of roto-moulded spas in Lakefield, Ont. He has 30 years of experience in media marketing and sales. He can be reached via e-mail at: sales@rotospa.com[7].

Source URL: https://www.poolspamarketing.com/trade/spa-rental-programs/

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