Kalahari Resorts is opening its third facility in the Pocono Mountains of Pennsylvania this summer.
Kalahari Resorts is opening its third facility in the Pocono Mountains of Pennsylvania this summer.

The U.S. waterpark industry continues to swell, buoyed by increased lending and innovative attractions.

This is especially true of indoor waterparks, which saw rapid growth last year. According to a new report from Hotel & Leisure Advisors, 14 facilities either opened or expanded, adding a combined 267,000 square feet of indoor aqua-play. That’s nearly quadruple the square footage of indoor-waterpark growth seen in 2013.

The Cleveland-based hospitality consulting firm predicts the surge of indoor facilities to continue well into 2015, with an additional 427,000 square feet projected to open.

But while the waterpark industry’s indoor sector flourishes, the number of new properties appears to be slipping from a post-recession high. Twenty-four waterparks were added in the U.S. and Canada, reaching a total of 858 by March. That’s down from last year, when 38 new properties opened, according to H&L Advisors’ published findings.

Indoor waterparks clearly have an advantage over their outdoor siblings: Unlike seasonal operations, properties with spiraling slides that are enclosed generate year-round cash flow. That’s attractive to investors, who appear to be letting loose with funds these days.

“What’s different now is that there is a lot more financing available for waterpark resort projects that, over the past five years, has been very hard to find,” said H&L President David Sangree.

It’s true that indoor waterparks have become hot commodities. As an example, Sangree cites the recent bidding war that erupted when indoor waterpark chain Great Wolf Resorts went up for auction. The Madison, Wisc.-based company had a number of potential suitors when it accepted bid from a New York-based private equity firm for a reported $1.35 billion.

SEE RELATED STORY: Great Wolf Resorts Sold to Highest Bidder

The rise of covered aquatic attractions is spurring significant growth in unexpected places. Though the Midwest has long been America’s waterpark epicenter, cradling at least 100 resorts, the Northeast is shaping up to be a mecca in its own right. Pennsylvania, in particular, will soon be home to two high-profile projects. The 125,000-square-foot Aquatopia at the Camelback Resort opens later this month and is expected to boast the longest indoor water coaster in the U.S. The Kalahari Resort’s African-themed facility, set to take customers this summer, will measure 106,000 square feet and feature a retractable roof.

Despite the overall drop in waterpark activity, there has been growth in the public sector. Five municipal waterparks opened in 2014 and 12 more have been proposed to open this year. Realizing that the typical public pool is not as much of a moneymaker, many are spurred by the higher rates they can charge for waterpark admission, Sangree said.

Unfortunately for lap swimmers, this is being done at the cost of existing pools.

“For those of us who like swimming, it’s a little distressing to see some municipalities reducing the number of pools they’re offering,” Sangree said. “But this is a definite trend that we’re seeing.”

H&L Advisors’ 2015 report also points to the rising popularity of surf simulators. A growing number of facilities are making room for these skill-based rides because they can generate additional revenue through added fees, increased merchandising and competitive events. Plus, they allow operators to diversify their offerings.

“The surf attraction is … distinctly different from a slide-like facility,” Sangree said.

This product category has seen significant investment from one of the industry’s biggest players. Richmond, B.C.-based attractions maker WhiteWater West Industries acquired two manufacturers of surf-in-place machines last year, San Diego-based FlowRider and LatiTube of Australia.

H&L Advisors has published its annual waterpark industry overview since 2011.