It’s no secret the economic
downturn — the worst since the Great Depression — has
affected waterparks. To put it in water slide terms, most
parks’ business is on the final curve, headed for an unknown
“Assuming we pull out of this within a year, we will look
back on these two years as kind of the ‘lost
years’,” says Dan Martin, managing principal at
Feasibility Advisors, LLC, in Chicago. “There’s not
a lot of money sloshing around in our economy, and very little that
is going to waterparks.”
That said, not all waterparks are lost in this economy. In this
annual Waterpark Issue, we profile four facilities that are finding
their way. We call them “Survivor Waterparks,” and what
they share in common are strategies to endure the recession —
and, often, even capitalize on it. In many ways they embody the ups
and downs, trials and rewards, the entire waterpark industry has
been going through this turbulent year.
Overall, the state of the industry depends heavily on the category
in which a facility falls and its location. Destination markets are
struggling more than the public sector, Martin says.
In California and Nevada, where the state economies are performing
very poorly and residents don’t take advantage of hot
summers, waterparks are choking. New England has been faring
decently in comparison, but the Midwest has struggled. In Texas, on
the other hand, the parks have enjoyed increased attendance.
Texas’ economy has been relatively stable compared with other
Weather has played a crucial role for many parks as well. Last
year’s unseasonably cool and rainy temperatures in parts of
the East and Midwest resulted in low attendance and therefore lower
revenues. Though 2010 so far has shown promising recuperation
across the nation, parks started strategizing early to bring those
Indoor waterpark resorts have been experiencing a slowdown in
expansion, according to a survey by Hotel & Leisure
Advisors, LLC. At least six of the 142 indoor resorts
foreclosed or declared bankruptcy in 2009 or 2010, all located in
the Midwest. But properties that succeeded generally fared better
than the national hotel occupancy average. Great Wolf Resorts,
for example, was down only 10.4 percent compared with the national
hotel average of 16.7 percent decline in 2009.
Parks align themselves with family travel and believe because they
are closer to home, or cost less than a travel vacation, people
will choose them instead, Martin observes. But when it comes to
family activities, waterparks actually fall in the middle of a cost
lineup. Measured against a two-hour movie ticket, a waterpark can
provide an entire day of active entertainment. Thus, the cost of
“fun per hour” is better valued at the waterpark,
For that reason, discounting is a good strategy and it’s
something many waterparks are doing. But it should be done
sparingly, with coupons and deals, not reducing prices at the door.
In addition, discounting should not be the only strategy. In some
cases, it may be better to emphasize a waterpark’s
affordability and its value instead.
In the end, the economic downturn will cycle itself out, and parks
need to position themselves for that eventuality, Martin says.
“There are two possible futures,” he says. “In
either case, we’ll have the same attendance as we did a few
years ago, or we will begin to climb.”