33 New Hotel Waterparks Open, 70 Under Construction
|By Jeff Coy and Bill Haralson
October 12, 2006 --- During 2006, thirty-three (33) new hotel indoor waterparks are expected to open, including new additions and expansion projects that are scheduled to open in the final months of 2006. Seventy (70) hotel waterpark projects are under construction or will break ground during 2006.
Hotel waterparks are a small but fast-growing sector of the resort industry which now totals one hundred and forty-one (141) properties that are a big hit with families nationwide.
These properties have a total of 24,009 rooms, nearly
3.5 million square feet of indoor waterpark space and 399 meeting rooms
covering 982,935 square feet of meeting space. The following chart illustrates
the growth over the last five years.
Today, about 99 projects are in the development pipeline compared to 121 in 2005, 69 in 2004, 46 in 2003 and 19 in 2002. Clearly, hotel waterpark resorts are outpacing the overall hotel and resort industry.
USA Hotel Industry Performance
The USA hotel industry reached 65.2% for the first
eight months of 2006, up nearly one point over a year ago and almost two
points higher than benchmark Year 2000. Hotel room rates averaged $96.81,
which is more than $10 higher than the last several years.
Revenues, supply and demand all showed positive growth for YTD August 2006 compared to a year ago. Revenues per available hotel room were up 8.3% over 2005. New hotel construction rose only 0.3% while demand for lodging increased 1.7% --- allowing both occupancies and room prices to rise.
Summer of 2006 was even with last summer for the
hotel industry despite $3.00 per gallon gasoline prices. In August 2006,
occupancy reached 68.7% --- up 0.3% from 668.5% in 2005. Hotel room revenues
were up 7.0% over 2005.
In the first eight months of 2006, luxury and midscale
hotels showed the most improvement in occupancy. Luxury, upscale and midscale
hotels among the chains showed the biggest gains in average room rates
compared to a year ago. Upper upscale hotels ran the highest occupancy
at 72.8% among the price tiers followed by luxury hotels at 72.5% compared
to a year ago.
Resorts and airport hotels ran the highest occupancies in 2006 compared to other types of lodging --- suburban, interstate, airport and small town. USA Resorts achieved 69.8% occupancy for 2006 through August, up from 69.5% during the same period a year ago while airport hotels reached 71.0%, urban hotels reached 69.6%, suburban hotels ran 65.8%, interstate reached 59.3% and small town hotels achieved 58.7%. Resorts produced average room rates of $138.03 for 2006 through August, which is higher than all other types of lodging.
Families in the USA bit the bullet on higher gasoline prices and refused to abandon their vacation plans. Many vacationed closer to home and escaped for weekends at nearby regional resorts --- a growing number of which now offer indoor waterparks and family entertainment centers.
The leisure traveler segment continues to breathe life into the hotel and travel industries. In addition, business travelers have now returned to hotels in greater numbers.
Currently, the most lucrative states for hotel investment
are Hawaii, New York and Florida where the revenues and their growth rates
are the highest in the nation. Nevada, Rhode Island and Alaska, while posting
high revenues per available room, slipped a bit from last year. 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 2006, the most desirable hotel markets, in terms of their ability to generate the highest revenues per available room are New York City, Oahu, Miami and San Diego. The markets recording the double-digit revenue growth are Chicago, Boston, Oahu, San Francisco and Los Angeles.
Some of the leisure destinations like Houston, Dallas,
Atlanta and Nashville recorded 14% to 21% improvement in revpar compared
to last year.
In sum, the USA Lodging Outlook reveals:
Hawaii is the leading resort destination with 82.1%
occupancy (down 0.7% from last year) and $187 average room rate (up 12.9%
over last year). This compares to the national hotel occupancy of 65.2%
and average room rate of $97 in the USA.
Nevada, California and Florida are trailing close behind with 73.5%, 71.3% and 70.2% occupancies, respectively. Hawaii and Florida recorded the biggest gains in occupancy improvement over last year.
The highest resort room prices were found in Hawaii at $187, in Florida at $112 and in California at $111. Hawaii recorded a price jump of more than 12% in 2006 compared to last year.
Wisconsin and Minnesota achieved statewide occupancy under the national average in both occupancy and average room rates. However, these two states have the highest number of hotel indoor waterpark resorts, and the top hotel waterpark resort properties recorded occupancies and room rates far above the national averages and equal to many of the Sunbelt resort destination states.
In fact, due to the double-digit growth of indoor waterparks over the last several years, Coy and Haralson formulated 17 predictions on the future of resort development.
In 1994, Stan Anderson, owner of the Polynesian Resort in Wisconsin Dells WI and pioneer of the hotel indoor waterpark resort installed some water gizmo in his indoor pool and weekend occupancy skyrocketed. That started the 12-year trend of building more than 100 hotel waterpark resorts that extend from the Midwest to the Northeast and Pacific Northwest.
During 2006, thirty-three (33) new additions and expansion projects are expected to open by year end, bringing the total to 141 hotel waterpark resorts open and operating in the USA. Seventy (70) projects are under construction or will break ground during 2006.
Clearly, hotel waterpark resorts are not a fad but here to stay. About 99 projects are in the development pipeline compared to 121 in 2005, 69 in 2004, 46 in 2003 and 19 in 2002. The waterpark 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. Together the two consultants produce Hotel Waterpark Development & Expansion Workshops, where they present their latest research and a variety of expert speakers.
Wisconsin Dells Hotel Performance
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 a 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.
In 2002, hotels WITH indoor waterparks achieved 26 points higher occupancy and $69 higher average room rates than hotels WITHOUT indoor waterparks in Wisconsin Dells.
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.
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 2006, the top two hotel waterpark resorts achieved average room rates above $200. Hotels WITH indoor waterparks recorded average room rates that are 2X that of hotels WITHOUT indoor waterparks. And the average room rate trend over the last three years is getting higher for the haves and lower for the have-nots! The biggest properties are gaining market share while the smaller properties continue to lose market share.
USA Competitive Supply of Hotel Waterparks
One hundred and forty-one (141) hotel indoor waterparks are open and operating in the USA, including properties scheduled to open in the final months of 2006.
Hotel waterpark resorts opened in the following states
Independent Versus National Branding
Of these 141 hotels, 75 are affiliated with a national hotel brand while 66 are independent. We counted the Great Wolf Lodges as branded properties starting in 2005. We counted the two Kalahari Resorts as independents, although this familiar name is another emerging national 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, Howard Johnson, Holiday Inn, Marriott, Microtel, Nickelodeon, Quality Inn, Ramada, Sleep Inn, Super 8 and Wingate.
Whether or not to affiliate with a brand is a major issue in this product sector of the hotel industry.
Two companies, Great Wolf Resorts Inc and Kalahari Resorts, 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.
Two hotel chains, Marriott and Holiday Inn, are creating indoor waterpark prototypes.
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.
Among the Top 5 largest resorts by room count, the
average number of hotel rooms is 657 with an indoor waterpark of 86,400
sf or 132 sf per guest room. The Top 5 resorts have an average of 5.6 waterslides,
2.3 pools and 1.8 hot tubs. All of them have one or more lazy rivers, 80%
have a wave pool and 40% have a water coaster. The Top 5 resorts average
70,700 sf of meeting space and 51 meeting rooms. The Top 5 hotel waterpark
resorts in 2006 have more rooms, bigger waterparks, more water features
and more meeting space than the Top 5 resorts in 2005 --- and the race
to be the biggest continues!
Among the next ten largest (Top 6-15) hotel waterpark resorts, the average number of rooms is 362 with an indoor waterpark of 58,700 sf or 162 sf per guest room.
Among the top resorts ranked 16-25 by room count, the average number of rooms is 282 with an indoor waterpark of 41,200 sf or 146 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 2-8 waterslides, 2-4 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.
About 80% 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. However, they generate a lot of entertainment value for spectators, and ski resorts seem to love 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
Feasibility consultants face the difficult task of
sizing their client’s hotel waterpark projects. Hotels with the highest
number of rooms don’t always have the largest waterparks. And vice versa.
While there are many factors that determine sizing, a rule of thumb is
the rooms to waterpark ratio. A direct relationship exists between the
number of hotel rooms and the size of the indoor waterparks.
Hotels with indoor waterparks more than 50,000 square feet average 298 rooms and 76,900 square feet of indoor waterpark --- a ratio of 293 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 42,200 sf of indoor waterpark --- a ratio of 195 sf per guest room. Notice that hotels with about 100 rooms to vary widely in the sizes of their indoor waterparks. 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 50 to 738 and the meeting facilities vary from 25,000 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 city.
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. Hotel waterpark resorts with substantial amounts of meeting space run higher annual occupancies than those with little or no meeting space.
Canadian Supply of Hotel Waterparks
In Canada, we have identified 113 hotel indoor waterparks that are open and operating in 2006. Most are located in the western provinces.
World Waterpark at the West Edmonton Mall in Alberta is the largest indoor waterpark in the world. The Mall is 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. Technically, the Fantasyland Hotel is not 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 associated with an indoor waterpark is the Fantasyland
Hotel in West Edmonton.
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
While the 217,800 sf World Waterpark is not really
a hotel waterpark, it is situated very closely to hotel rooms located at
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.
The second largest hotel waterpark in Canada is the Americana 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.
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, 2 in British Columbia and one each in New Brunswick and Saskatchewan.
Mexican Supply of Hotel Waterpark Resorts
While most waterparks in Mexico tend to be outdoor waterparks, we have identified a few that are indoor-outdoor combinations and onsite, adjacent or nearby lodging that would tend classify them as hotel waterpark resorts.
We are in the process of surveying owners, consultants
and suppliers in Mexico to gather more data and develop a better profile
of hotel waterpark resorts in Mexico.
Rest of the World Supply of Waterpark Resorts
About 1,000 waterparks are open & operating worldwide --- a combination of public and private outdoor waterparks and indoor waterparks that may or may not be connected to lodging. Only about 400 are park members of the waterpark association. Therefore, data is incomplete regarding many of the waterparks around the world. Since waterpark developments are growing rapidly in many parts of the world, hospitality & leisure consultants Jeff Coy and Bill Haralson have commissioned a team of people around the world to assist in data collection for the Annual Waterpark Industry Report.
We have identified fifteen (15) properties in the
rest of the world that have a combination of hotel rooms, indoor waterparks
and outdoor waterparks. Our team continues to survey owners and managers
to build a profile of outdoor waterparks, indoor waterparks and 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.
Center Parcs has 20 natural resorts throughout Europe
--- located in the Netherlands, Belgium, Germany, France and Great Britain.
Only a few driving hours away from home, these parks offer unique short
breaks, completely apart from daily routine. Each Center Parc Village has
a choice of villas, dining, children facilities, sports centers and water
activities. All Center Parcs have a children’s activity pool, hot whirlpools,
outdoor pool, solaria, waterslides and an aqua café & terrace.
Many of the parks also have a baby pool, rapids, wave pool and a wild water
chute. Some of the parks have a themed pool and water sprays. We are still
developing a profile of the Center Parc resorts --- with the help of Mike
Paco Caudet of Action Park in Spain surveys waterparks in Europe, Middle East and Asia and reports the following supply of outdoor parks, indoor parks and hotel waterpark resorts. His report shows 250 waterparks in Europe, 30 in the Middle East and 90 in Asia.
ROW Waterparks Under Construction or In Development
In the rest of the world, here is a list of hotel
waterpark resort that either under construction or in the development planning
Worldwide, waterparks are growing in popularity with both leisure travelers and resort developers. In the USA, the hotel indoor waterpark resort concept quadrupled over the last six years.
For details about what’s under construction and in the development pipeline, see two related articles:
Hotel Waterpark Resorts: Construction Report 2006
For more information regarding feasibility, supply and demand, contact Jeff Coy at 480-488-3382. Coy heads JLC Hospitality Consulting of Cave Creek AZ. Email firstname.lastname@example.org or go to www.jeffcoy.com. Or contact Bill Haralson at 505-802-1522. Haralson heads William L. Haralson & Associates of Alto NM. Email email@example.com or go to www.wlha-inc.com.
Jeff Coy is president of JLC Hospitality Consulting
based in Cave Creek AZ.
You can reach him at 480-488-8050 or
email him at firstname.lastname@example.org or
go to www.jeffcoy.com.
Bill Haralson is president of William L. Haralson & Associates
of Ruidoso NM.
You can contact him at 505-258-1522
or email email@example.com or
go to www.wlha-inc.com.
|Also See:||Indoor Waterparks Add Value to Hotel & Resort Mixed Use Projects / Jeff Coy and Bill Haralson / September 2006|
|Hotel Waterpark Resorts - Construction Report 2006; 73 Are Under Construction, Another 108 are planned / Jeff Coy and Bill Haralson / July 2006|
|What Are the Risk Factors of a Hotel Waterpark Investment? / Jeff Coy & Bill Haralson / January 2006|
|Hotel Waterpark Resort Industry Report 2005 23 New Hotel Waterparks Open, 52 Under Construction / Jeff Coy and Bill Haralson / October 2005|
|Hotel Waterpark Resorts Construction Report 2005 / Jeff Coy and Bill Haralson / October 2005|
|Hotel Waterpark Resort Industry Report 2004; 14 New Hotel Waterparks Open, 32 Under Construction / October 2004|
|Hotel Waterpark Resorts - Construction Report 2004; 32 Are Under Construction or Breaking Ground in 2004 / Aug 2004|