Feature Article - September 2009
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Sink or Swim

How Waterparks Are Surfing the Economic Waves

By Dawn Klingensmith

Riding Out a Rough Economy

2007 was a strong year for the waterpark industry. 2008 was a different story. Last year's bank crisis resulted in fewer loans and, in turn, fewer waterpark openings. According to JLC Hospitality Consulting's Spring 2009 Construction Report, 50 hotel waterpark resorts were under construction in 2008, down from 67 in 2007. At least 30 planned projects never broke ground, and their construction dates shifted to 2009 or 2010 due to the mortgage breakdown, the Cave Creek, Ariz.-based firm reports.

Hotel & Leisure Advisors, Cleveland, Ohio, said 18 parks are on track to open in 2009. "This year is definitely going to be a tough year," said David Sangree, president of the consulting firm. "I think we'll see a small improvement in the fourth quarter of this year, but it will be 2011 before things really start improving."

Whereas in past years topics at the Hotel Waterpark Resort Workshop, held in Wisconsin Dells, Wis., focused on developing and financing new resorts, in 2009, the agenda covered strategies waterparks should implement to survive. The workshops are co-sponsored by JLC Consulting.

Nevertheless, Steve Shattuck, director of marketing, Great Wolf Resorts Inc. in Madison, Wis., is optimistic for the Great Wolf Lodge chain of indoor waterparks if not for tourism in general. "We're pleased with performance of our operating resorts right now, especially compared with the hospitality industry as a whole," he said. "People are not willing to give up vacations, but they are taking shorter vacations closer to home."

In fact, hotels with indoor waterparks are outperforming hotels without them, according to JLC Hospitality Consulting.

Following are some solutions waterparks have come up with to survive or, in some cases, even succeed during the recession:

  • Close midweek, when traffic is slow.
  • Don't consider building without an attached hotel and conference center, which draws business during the week and generates additional revenues.
  • Offer a range of "dry" attractions, activities and amenities. Adventure sports are a big draw.
  • New construction should take place in established tourist locations to draw people who want to cram as much fun as possible into their weekend getaways.
  • Phase the park's opening over a couple of hours. Stagger the opening of rides. Get the ones near the entrance up and running first and the farthest ones rides running later to cut utility and labor costs.