It is real grass. There are three keys to making real grass work around a pool. The first is an underground irrigation system-- I like Netafim. The next is a wide coping to keep grass cuttings out of the pool as much as possible. The last is that it works best with an adult's pool- kids jumping in and out get a lot of chlorinated (or salty) water on the grass and will kill it.

What specific kind of grass is around this pool? Is this bermuda?