14 New Hotel Waterparks Open, 32 Under Construction
|By Jeff Coy and Bill Haralson, October 1, 2004
The USA hotel industry reached 62.7% for the first
eight months of 2004, up almost two points over a year ago and only one
point below benchmark Year 2000. Hotel room rate averages reached $86.55,
which is higher than Year 2000 levels.
USA Hotel Industry Performance
Revenues, supply and demand all showed positive growth for YTD August 2004 compared to a year ago. Revenues per available hotel room were up 7.3% over 2003. New hotel construction rose only 1.1% while demand for lodging increased 4.5% --- allowing both occupancies and room prices to rise.
Summer of 2004 was better than last summer for the
hotel industry despite colder than normal temperatures in many markets
and the impact of several hurricanes. In August 2004, occupancy reached
67.2% --- down ½ point from 67.7% in 2003. However, hotel revenues
are up substantially in 2004 over 2003.
In the first eight months of 2004, luxury and upscale hotels among the chains have shown the most improvement in both occupancy and average room rate compared to a year ago. Luxury-priced hotels ran the highest occupancy at 70% among the price tiers followed by upscale-priced hotels at 64.8% compared to a year ago.
Resorts ran a higher occupancy in 2004 than 2003
and achieved the higher occupancy and average room rates than all other
types of lodging --- urban, suburban, airport and highway. USA Resorts
achieved 69.1% occupancy for 2004 through August, up 4.5% over a year ago
while urban and airport hotels reached 66%, suburban hotels ran 61% and
highway hotels peaked at 58%. Resorts produced average room rates of $132
for 2004 through August, which is 3.4% higher than the same period last
year and higher than most other types of lodging.
Families in the USA continued to vacation close to home and escape for weekends to nearby regional resorts --- some which included indoor waterparks. Consumers and leisure travelers have kept the hotel and travel industries alive for the last three years by continuing to make time for family recreation at regional resorts and taking short vacations, although closer to home. Business travelers are just starting to come back to hotels in noticeable numbers.
Currently, the most lucrative states for hotel investment
are Hawaii, New York, Nevada and Florida where the revenues and their growth
rates are the highest in the nation. Hotel revenue per available room (RevPAR)
is the key indicator that takes into account supply, demand, occupancy,
scarcity and pricing.
RevPAR is a measure of asset productivity that often points developers to the most attractive locations for new construction, although many of these desirable locations also have high barriers to entry.
In 2004, the most desirable hotel markets, in terms
of their ability to generate the highest revenues per available room as
well as double-digit growth rates, are New York City, Oahu, San Francisco,
Washington DC, Miami, Boston and Los Angeles.
However, not all trends start on the East or West Coasts and move inland. In 1994, Stan Anderson, owner of the Polynesian Resort in Wisconsin Dells WI and acknowledged "father of the hotel indoor waterpark resort", started a 10-year trend of building more than 60 hotel waterpark resorts that have extended from the Midwest to Maine and Washington State. Thirty-two (32) more waterpark resorts are under construction or will break ground in 2004.
USA Hotel Waterpark Resort Performance
Sixty-two hotel waterpark resorts are open and operating in the USA, as of October 2004. This sector of the resort industry has experienced rapid growth in the last several years.
Jeff Coy and Bill Haralson formed Hotel Waterpark Resort Research & Consulting, a collaborative effort of JLC Hospitality Consulting of Rochester MN and William L. Haralson & Associates of Richardson TX. Coy, a hotel consultant, and Haralson, an attractions consultant, joined forces for the purpose of building an industry database for this product sector. Both were appointed co-chairs of the Resort Task Force by the World Waterpark Association in 2002 and continued in those roles today. Their latest research is presented annually at the WWA Waterpark Development Workshop. Go to www.waterparks.org.
This third annual industry report includes supply trends, sizing components, construction costs and operating expense ratios with a special focus on hotel waterpark resort performance trends in Wisconsin Dells where the concept originated and numerous hotel waterpark resorts are clustered in one market.
In 1990, before indoor waterparks, Wisconsin Dells ran a 40% annually hotel occupancy and had a 100-day peak season. Today, it has 18 hotels with indoor waterparks and has 365-day peak season. The largest hotel waterpark resorts are running occupancies in the high 70s and low 80s --- 15 to 20 points above the national hotel average.
Wisconsin Dells Hotel Performance
Two years ago, we discovered that hotels WITH indoor waterparks achieved 26 points higher occupancy and $69 higher average room rates than hotels WITHOUT indoor waterparks. We reported the amazing fact that eighteen (18) hotels WITH indoor waterparks captured 85% of the total market hotel revenue in Wisconsin Dells while forty-four (44) hotels WITHOUT indoor waterparks were left with only 15% of the total market hotel revenue. As a result, we referred to Wisconsin Dells as "the land of haves and have-nots."
In 2004, we updated that research survey to determine
the impact of 9/11, the economic recovery and what happened to the haves
and have-nots in Wisconsin Dells over the last three years.
Wisconsin Dells still has 18 haves and 44 have-nots. (We didn’t count the properties with less than 20 rooms.) However, the haves have built 390 more rooms while the have-nots have not. In 2003, there are 3454 rooms connected to an indoor waterpark while 2402 rooms are not. The number of available room nights at hotel waterpark resorts reached 1,260,710 in 2003, up from 1,118,360 in 2001 while available room nights at the have-nots remained unchanged at 876,760 since 2001.
In 2001, Wisconsin Dells ran 59.2% occupancy --- almost equal to the national hotel occupancy of 60.1%. In 2002, during the aftermath of the 9/11 attacks, Wisconsin Dells gained one point of occupancy while the nation lost one point --- providing evidence that families were still vacationing albeit closer to home. Resort occupancy was up compared to other types of lodging.
In 2003, the haves sold 834,000 room nights, up from 781,000 in 2002 and 744,000 in 2001. Hotels WITH indoor waterparks reached 66.2% occupancy while hotels WITHOUT indoor waterparks achieved only 43.1% occupancy --- a difference of 23 points of occupancy.
In 2003, the 18 haves achieved average room rates of $120, up from $114 in 2001, while the 44 have-nots reached $61, down from $65 in 2001. Hotels WITH indoor waterparks recorded ADRs that are 2X that of hotels WITHOUT indoor waterparks. And the ADR trend over the last three years is getting higher for the haves and lower for the have-nots!
The top two hotel waterpark resorts achieved average room rates of $191 and $175 in 2003.
The 18 hotels WITH indoor waterparks captured 75% of the total hotel market room revenue in 2001, 77% in 2002 and 81% in 2003. This upward trend begs the question, "How long can you succeed in Wisconsin Dells as a hotel without an indoor waterpark?" The biggest properties are getting bigger while the smaller properties continue to lose market share.
Lessons learned include:
Seventy-six (76) hotel indoor waterparks are open
and operating in the USA, including four properties scheduled to open in
the final two months of 2004. Hotel waterpark resorts opened over the last
three years in the following states:
These properties have a total of 12,470 rooms, nearly 1.6 million square feet of indoor waterpark space and 373 meeting rooms covering 780,585 square feet of meeting space.
Independence Versus National Branding
Of these 76 hotels, 42 are independent while 34 are affiliated with a national hotel brand. Properties in resort locations tend to be independent while properties in urban, suburban and highway locations tend to be franchised.
Brand names include AmericInn, Baymont, Best Western, Comfort Suites, Country Inn & Suites, Days Inn Hawthorn Suites, Hilton, Hojo, Holiday Inn, Marriott, Microtel, Quality Inn, Ramada, Sleep Inn and Wingate.
The following chart illustrates the growth over the
last three years.
Whether or not to affiliate with a brand is a major issue in this product sector of the hotel industry. Two companies, Great Lakes Companies and Kalahari Resort, are reproducing their prototypes in multiple locations --- in effect, starting their own brand. Great Lakes Companies signed a license agreement with Ripley’s Entertainment for its Great Wolf Lodge in Niagara Falls, Ontario --- which is a first step in becoming a franchisor in the hotel waterpark resort industry.
While several hotel chains, like Marriott and Holiday Inn, are studying the indoor waterpark concept, several entertainment companies, like Six Flags Inc, Paramount Parks and Nickelodeon are developing their plans in the hotel business.
Top 25 Largest Hotel Waterpark Resorts in the USA
Hotels with the largest indoor waterparks are concentrated
in Wisconsin Dells WI where 18 waterpark resorts now exist. The Polynesian
Resort in Wisconsin Dells is generally acknowledged as the first hotel
indoor waterpark in 1994. The Bavarian Inn Lodge in Frankenmuth opened
the first of its five indoor pools and 30,000 sf of indoor water features
in 1986 but did not install any waterslides. Who was the first? What is
a waterpark? A waterpark resort task force is establishing new categories
and definitions for waterparks.
Other hotels with indoor waterparks are concentrated in Wisconsin, Minnesota, Michigan, North Dakota, South Dakota and Montana. In Wisconsin, other hotel waterparks are located in Wisconsin Dells, Green Bay, Tomah, Minocqua, Madison, Prairie du Chien, Ashland and Lac du Flambeau. In Minnesota: Shoreview, Owatonna, Baxter, Minneapolis, Detroit Lakes, Nisswa, Moorhead, Rochester, St Cloud, Thief River Falls and Orr. In Michigan: Grand Rapids and Mackinaw City. In North Dakota: Fargo and Bismarck. In South Dakota: Watertown, Aberdeen and Sioux Falls. In Montana: Anaconda and Missoula. In other states, you find hotel waterparks in Spokane WA, Norfolk NE, Sheperdsville KY, Hutchinson KS, Utica IL, Amana IA and Colorado Springs CO.
Profile of USA Hotel Waterpark Resorts by Number of Rooms
Among the Top 5 largest resorts by room count, the
average number of hotel rooms is 470 with an indoor waterpark of 73,200
sf or 155 sf per guest room. The Top 5 resorts have an average of 4.3 waterslides,
2.5 pools and 2.5 hot tubs. All of them have a lazy river, 50% have a wave
pool and 33% have a water coaster. The Top 5 resorts average 32,160 sf
of meeting space and 27.7 meeting rooms.
Among the next ten largest (Top 6-15) hotel waterpark resorts, the average number of rooms is 275 with an indoor waterpark of 45,277 sf or 164 sf per guest room. Among the top resorts ranked 16-25 by room count, the average number of rooms is 213 with an indoor waterpark of 22,350 sf or 105 sf per guest room. Using the chart above, the waterpark developer can estimate the size of his hotel, indoor waterpark and its components. Depending upon size, all hotel waterpark resorts average from 2-7 waterslides, 2-3 pools and 1-2 hot tubs.
Almost all of the Top 25 Largest Hotel Waterpark Resorts have a lazy river while less than 30% of the smaller resorts have them.
Only one-half of the Top 5 Largest Hotel Waterpark Resorts have a wave pool and less than 10% of the smaller resorts have them. Wave pools, while very attractive to surfers, take up a lot of space for the smaller number of guests who can use them.
The Top 25 Largest Hotel Waterpark Resorts are clearly in the meetings & convention business to balance their seasonal and weekend-weekday mix of business.
Profile of USA Hotel Waterpark Resorts by Size of Waterpark
Hotel waterpark resort developers face the difficult
task of sizing their projects. Hotels with highest number of rooms don’t
always have the largest waterparks. And vice versa.
A direct relationship exists between the number of hotel rooms and the size of their indoor waterparks. Hotels with indoor waterparks more than 50,000 square feet average 325 rooms and 87,143 square feet of indoor waterpark --- a ratio of 268 sf of waterpark per guest room. That ratio decelerates as waterparks get smaller.
To illustrate, hotels with waterparks 40,000 to 49,999 sf average 217 rooms and 42,500 sf of indoor waterpark --- a ratio of 208 sf per guest room. Notice that hotels with only 80 to 120 rooms tend to have the widest range of indoor waterpark --- from only 2,600 sf to over 12,000 sf in size. Hotel owners and developers can use the chart above to help size their projects.
Top Hotel Meeting Facilities with Indoor Waterparks in the USA
Among the Top 15 Hotel Meeting Facilities with an indoor waterpark, the number of rooms varies from 98 to 738 and the meeting facilities vary from 15,000 to 125,000 square feet.
Several of the largest hotel waterpark resorts are
in the meetings & convention business. The 738-room Kalahari Resort
& Convention Center in Wisconsin Dells WI is clearly the largest meeting
facility (125,000 sf) with the largest indoor waterpark (125,000 sf). The
194-room Grand Harbor Resort in Dubuque IA, with 25,000 sf indoor waterpark,
is connected to a 120,000 sf convention center that it operates for the
Hotel waterpark resorts obviously target the individual leisure traveler segment. But these properties have the advantage of targeting another customer segment --- the group market --- to fill in hotel low periods and weekdays when kids are in school.
The Top 5 Largest Meeting Facilities with an indoor waterpark average 336 guest rooms, 79,000 sf of meeting space, 36 meeting rooms and a 42,600 sf waterpark. Components average 4 waterslides, 2.2 pools and 1.6 hot tubs. Half of these properties have a lazy river and 20% have a wave pool and water coaster.
Among the meeting facilities ranked 6 through 10 in size, these properties averaged 207 guest rooms, 26,600 sf of meeting space, 15 meeting rooms and a 22,200 sf indoor waterpark. Among those ranked 11 through 15, the number of guest rooms averaged 213 with 15,781 sf of meeting space, 10.5 meeting rooms and an 18,354 sf indoor waterpark.
This is only one of several methods a developer should use to estimate the size of meeting facilities in a hotel waterpark resort.
Hotel Waterpark Resorts Under Construction in USA
Hotels with indoor waterparks are growing from 23%
to 29% annually while the overall hotel industry expects new supply to
grow only 1.2% in 2004 and 1.3% in 2005. In 2000, there were only 18 hotel
waterpark resorts. Today, over 60 are open nationwide. Eighteen new additions
and expansion projects are expected to open by year end. Hotel waterpark
projects under construction have grown from 8 in 2000 to 32 that are under
construction or will break ground during 2004.
Clearly, hotel waterpark resorts are both cool and hot at the same time! Projects in the development phase grew from 19 in 2002 to 46 in 2003 to 69 in 2004. The number of hotel rooms attached to indoor waterparks is expected to grow from 5,400 in 2000 to a forecast of over 16,300 in 2005, which is an increase of 3X over five years.
Hotel waterpark resort grew out of Wisconsin during the 1990s, and then spread to adjacent states in the Upper Midwest. The growth pattern is spreading across the northern tier of the USA, with new properties stretching from Michigan and Ohio to Pennsylvania and new construction activity in the northwestern states of Montana, Idaho, Washington and Oregon. In fact, three ski resorts --- Camelback Ski Area in PA, Boyne Mountain in MI and Silver Mountain in ID --- now have or will soon open indoor-outdoor waterparks to build revenues on a year round basis. In the future, indoor waterparks will spread to the Sunbelt where desert resort guests and their kids will look for protection from the sun, hot temps and humidity.
Recent Openings: USA
In February 2004, Best Western Sterling Inn in Sterling Heights MI, a suburb of Detroit, opened the 9,000 sf expansion of its indoor waterpark, bringing the total to more than 30,000 sf.
In March, Wilderness Resort & Golf Hotel opened its 47,051 sf Wild West indoor waterpark which connects to 160 rooms previously added along with a rear lobby and large arcade. Wild West Waterpark is the resort’s third indoor waterpark on site, bringing total indoor waterpark space to 161,000 sf --- the most of any resort in America. Wilderness now has 593 rooms and suites in Wisconsin Dells WI.
In April, Vance Castleman opened a 24,000 sf indoor waterpark in Minot ND as part of his 126-room Sleep Inn & Suites, which opened in January, 2004. Waterpark features include a 2,500 sf activity pool, 3 major waterslides, 2 kiddie slides, 4 kiddie play structures and a 4-leaf clover-shaped hot tub that accommodates 48 people. The Sleep Inn is connected to a 10,000 sf convention center and Dakota Square Mall with 85 stores. Ramaker & Associates provided the preliminary plans and Associated Pools of Minot designed and built the pools. Play structures were provided by Miracle Recreation Equipment.
In May, hotel owner Dave Nordstrom opened his 11,000 sf Wasserbahn indoor waterpark at the Holiday Inn in Amana IA --- the first holidome in America to be converted into an indoor waterpark. Ramaker & Associates submitted the winning design. Volk International represented the owner for specifications, bidding and supervision of installation. The existing pool was converted a zero entry to 8-inch wading pool with play structure and 5 geyser jets for young children. An activity pool was added with a waterwalk, basketball hoops and a vortex pool along with a large spa. A slide tower that looks like a Water Tower was added to the building and launches 2 enclosed body slides that exit and re-enter the building. "The sauna was completed redone and the game room went from 330 sf with 6 games to 800 sf with 22 games," reports General Manager John Gilbertson. "We created 14 new suites including several KidsSuites in new interiors and furniture. All rooms have a microwave and refrigerator," he said. Room occupancy and revenues have increased since opening in May.
In June 2004, four hotel waterpark resort projects opened:
USA Hotel Waterpark Resorts In Development
Eighty (80) hotel indoor waterpark projects are in the planning stages as of October 1, 2004 compared to 46 projects in the pipeline this same time last year and 28 projects the year prior. While 76 hotel waterpark resorts are now open and operating in the USA, 32 projects are under construction and 80 more are on the drawing boards nationwide.
Wisconsin, Minnesota, Illinois and Michigan are leading
the way in new developments with New York and North Dakota following close
behind. The following numbers of projects are scheduled for the following
These 80 planned projects comprise 19,284 hotel guest rooms and indoor waterpark space totaling 3,496,793 square feet in 27 states.
Hotel waterpark developers are focusing on new markets for new construction. Owners of existing hotels are thinking about enclosing their outdoor pools with new-technology thin-shell domes, aluminum & glass and light-weight polycarbon structures that let in the light and keep out the weather --- for year round operation. Other hotel owners are raising the roofs of their pool buildings to install 30 to 50-foot high waterslide towers. Some owners of existing hotels are tearing up their pool decking to install lazy rivers, activity pools, kiddie pools and adult spas.
The hotel indoor waterpark resort is a growing phenomenon that is impacting all levels of hotel development and investment.
Canadian Supply of Hotel Waterparks
In Canada, we have identified 108 hotel indoor waterpark
that are open and operating in 2004, compared to 99 properties in 2003
and 82 in 2002. Most are located in the western provinces.
Top 15 Canadian Hotel Waterparks by Number of Rooms
World Waterpark promotes itself as the largest indoor
waterpark in the world. It is part of the West Edmonton Mall in Alberta,
which also boasts being the largest shopping center in the world, according
the Guinness Book of World Records.
The Fantasyland Hotel at West Edmonton Mall was built in 1986 with 355 rooms. It wouldn’t be totally accurate to call Fantasyland Hotel a hotel waterpark, but it is closely connected. You can walk from the hotel through the mall to the 217,800 sf World Waterpark without going outside. So, the largest hotel in Canada by room count associated with an indoor waterpark is the Fantasyland Hotel.
In Canada, hotel waterparks are different than in the USA. Many are really indoor pools that have been enlarged and enhanced with waterslides and water playthings. Many of the indoor waterparks in Canada are under 10,000 sf while many in the USA are over 10,000 sf.
Top 15 Canadian Hotel Waterparks by Size of Waterpark
The 217,800 sf World Waterpark is not really a hotel waterpark, technically, but it is an indoor waterpark that is located in the West Edmonton Mall. And the 355-room Fantasyland Hotel is part of that same mall --- making a connection between the hotel and the waterpark.
Second largest is the Ameri-Cana Resort & Conference Center, which opened its 19,100 sf indoor waterpark in 2004 --- attached to its 160 guest rooms and 16,000 sf conference center in Niagara Falls ON.
Third largest is Travelodge World Hotel in Ottawa,
which also opened its 13,000 sf indoor waterpark in 2004 --- connecting
with its 177 guest rooms.
In Canada, the biggest concentration of hotel indoor waterparks is in the Economy Hotel sector, where room counts are typically under 100 rooms and indoor waterparks are less than 5,000 sf. However, when you look at what is under construction and in the planning stages, bigger hotel waterparks are coming to Canada.
Canadian Hotel Waterpark Resorts Under Construction
Great Wolf Lodge in Niagara Falls ON is scheduled to break ground before year end 2004 and open in 2005. Ripley Entertainment plans to spend $200 million on a family resort destination that will include a Ripley-owned Great Wolf Lodge and a state of the art 115,000 sf Ripley’s Aquarium of Canada on a 25-acre parcel along the Niagara River, just north of downtown Niagara Falls, Canada.
Ripley’s is the first license ever granted for a
Great Wolf Lodge by the Great Lakes Companies of Madison WI. Ripley’s Aquarium
of Canada, opening in 2006, will be the third sea life attraction following
Riley’s Aquariums in Myrtle Beach SC and Gatlinburg TN. The northwoods-style
hotel will have 404 rooms and 90,000 sf of indoor waterpark. Other features
include a themed family restaurant, huge arcade, gift shop, confectionery,
Aveda Spa, meeting rooms and fitness center along with outdoor pool and
Canadian Hotel Waterpark Resorts In Development
Nine (9) major hotel waterpark resorts are in the planning stages for Canada, 3 in Alberta, 2 in Ontario and one each in British Columbia, New Brunswick, Nova Scotia and Saskatchewan.
Mexican Supply of Hotel Waterpark Resorts
We have identified eleven (11) properties in Mexico that have a combination of hotel rooms, indoor waterparks and outdoor waterparks. We are in the process of surveying owners and managers to develop a profile of hotel waterpark resorts in Mexico.
Rest of the World Supply of Hotel Waterpark Resorts
We have identified fifteen (15) properties in the rest of the world that have a combination of hotel rooms, indoor waterparks and outdoor waterparks.
We continue to survey owners and managers to build
a profile of hotel waterpark resorts around the world.
Bergische Sonne has a 430,560 sf indoor-outdoor waterpark in Wuppertal Ruh, Germany.
Monte Mare Adventure Spa has 269,100 sf of indoor-outdoor waterpark in Rheinback, Germany.
World Waterpark in West Edmonton, Alberta, Canada, claims to be the largest indoor waterpark in the world with 217,800 sf.
Alton Towers/Splash Landing in Staffordshire England is generally recognized as the first hotel waterpark resort in Europe with its 216 rooms and 40,000 sf indoor waterpark.
Rest of the World Hotel/Indoor Waterparks
Worldwide, the hotel waterpark resort concept is growing in popularity with both leisure travelers and resort developers.
Hotel Waterpark Resort Research & Consulting is a collaboration of Jeff Coy & Bill Haralson. Coy heads JLC Hospitality Consulting and is certified by the International Society of Hospitality Consultants. Haralson heads William L. Haralson & Associates and is a Hall of Fame member of the World Waterpark Association. For more info, contact Jeff at 507-289-7404 or email [email protected]. Website is www.jeffcoy.com. Reach Bill at 972-231-7444 or email [email protected]. Website is www.wlha-inc.com.
|Also See:||Hotel Waterpark Resorts - Construction Report 2004; 32 Are Under Construction or Breaking Ground in 2004 / Aug 2004|
|Ski Resorts Expand Year Round Revenues, Add Outdoor & Indoor Waterparks / Jeff Coy & Bill Haralson / May 2004|
|Jeff Coy and Bill Haralson Find a Way to Get Waterparks Flowing at Hotels and Resorts / April 2004|
|Hotel Waterpark Resort Industry Report - 2003 14 New Hotel Waterpark Resorts Open / October 2003|
|What’s It Going to Cost to Build a Hotel With an Indoor Waterpark? A Guide to Cost Allocations for Developers / Jeff Coy and Bill Haralson / May 2003|
|Hotel Waterpark Resort Industry Report - 2002 / Jeff Coy and Bill Haralson / Nov 2002|
|So You Want to Build a Hotel Indoor Waterpark / Jeff Coy and Bill Haralson / Sept 2002|
|Hotel Waterparks Grow Throughout Midwest, Product Ready for National Expansion / Bill Haralson and Jeff Coy / April 2002|
|Hotel Indoor Waterparks Boost Revenues, Extend Peak Season to Year Round / Jeff Coy, ISHC / January 2002|
|Wisconsin Dells Becoming a Land of Haves and Have-Nots; Waterpark Hotels Achieved 26 Points Higher Occupancy Than Regular Hotels in 2001 / April 2002|