NUMBER OF WATERPARKS PER REGION
As an individual operator looking to expand your market, it can be helpful to understand industrywide growth trends, especially given the current economy.
It’s clear that with little to no financing available, development of new parks has slowed considerably. For example, 23 waterpark resorts are scheduled to open by the end of this year, down from 34 in 2007, according to a June 2011 construction report by Jeff Coy and Amanda McDaniel of JLC Hospitality Consulting Inc.
Looking ahead, a stronger economy will mean more financing, and the fact that many waterparks — and waterpark resorts — have done reasonably well weathering the recession means the industry is still a viable investment.
“I’m thrilled to report that over the past few years, Great Wolf Resorts has been able to weather the recession very well …,” Steve Shattuck, corporate director of communications at Madison, Wis.-based Great Wolf Resorts, says. “I think what that tells us is that our business model resonates with consumers in any economy.”
According to the World Waterpark Association, more than 70 million people visit a waterpark in the United States annually. The question now is, what can be expected moving forward? Certainly renovation will be key over the next several years. Many first-generation properties are aging and operators will likely be looking to upgrade for physical repairs as well as functional obsolescence.
Where will new waterparks be built and what will development look like once funding becomes available?
“Developers are looking into areas where the concentration of existing parks is lower,” says David Sangree, president of Cleveland-based Hotel & Leisure Advisors. “Developers have proposed a wide range of projects in a variety of areas throughout the United States and Canada.”
Urban markets may be one area likely to see growth in the next several years, says Scot Hunsaker, president of Counsilman-Hunsaker, based in St. Louis. There’s growing interest in “asset reuse” — reinvesting in quality of life by refurbishing existing space (an old building, a vacant lot or an entire city block) for community use — and aquatic amenities can be ideal options for those types of projects.
But it goes deeper than just location. New projects that are moving forward are those which make economic and business sense, Hunsaker notes, and the definition of what’s “sensible” has changed. Investors are less open to risk and, as a result, business models are becoming more sophisticated. For instance, one strategy is to bundle a waterpark with other elements, such as a movie theater, that create a synergy.
Ultimately, developers are doing their homework. Putting up a new project today requires a true understanding many factors, including competition, projected population growth, and the needs and wants of potential user groups.