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Great Wolf Resorts Reports 4th Qtr Loss of $36.5 million Compared to a
Loss of $7.7 million in the Prior Year; 4th Qtr Occupancy Falls to 48.8%

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MADISON, Wis., February 25, 2009—Great Wolf Resorts, Inc. (NASDAQ: WOLF), North America’s leading family of indoor waterpark resorts, today reported results for the fourth quarter and year ended December 31, 2008.

Highlights

• Achieved 2008 fourth quarter Adjusted EBITDA of $11.1 million, which was significantly above consensus analysts’ estimates of $8.6 million and above the company’s previously issued fourth quarter guidance range of $6.6 - $10.6 million.  Adjusted EBITDA for the full year 2008 was $67.6 million, also above consensus estimates and guidance.
• Reported a 7.9 percent decline in 2008 fourth quarter Great Wolf Lodge® brand same store revenue per available room (RevPAR), compared to a hotel industry average decline of 9.8 percent, according to Smith Travel Research data.  The company’s same store RevPAR for the full year was up 0.8 percent, compared to an industry decline of 1.9 percent. 
• Elected Kim Schaefer, chief executive officer, to the company’s board of directors in February 2009.
• Negotiated an extension of the maturity date to November 30, 2009 on the $76.8 million mortgage loan on the company’s Mason, Ohio resort property.
• Opened in December 2008, a 203-suite addition and 20,000 square feet of meeting space at the Great Wolf Lodge -- Grapevine, Texas resort.

The company reported 2008 fourth quarter net loss of $(36.5) million, or $(1.18) per diluted share, compared to net loss of $(7.7) million, or $(0.25) per diluted share for the same period a year earlier.  Fourth quarter 2008 operating results include the impact of previously announced pre-tax impairment charges of $17.4 million for goodwill and $18.8 million for the company’s investment in one of its joint ventures, and the related effect on income taxes of the non-deductibility of a majority of the goodwill impairment charge for income tax purposes.

Operating Results

“Our resorts performed relatively well in the fourth quarter, despite a difficult macroeconomic and consumer spending environment,” said Kim Schaefer, chief executive officer.  “In the current challenging operating environment, we have moved quickly to point out to the consumer the excellent value, convenience and quality of a stay at our resorts.  We achieved operating results during the fourth quarter that were better than the overall hotel industry.  Our Generation II properties, which are our newer, larger resorts, reflect the broad range of guest amenities we seek to incorporate into our future development properties, and contribute over 80 percent of our Adjusted EBITDA, posted operating statistics in the fourth quarter better than the overall hotel industry.  These properties had a same-store RevPAR decline of 4.9 percent in the quarter, or about half the decline reported for the overall hotel industry during the period.

For the full year 2008, same-store RevPAR for all Great Wolf Lodge brand resorts increased 0.8 percent, led by a 3.9 percent increase at the company’s Generation II properties.  This compares to a 1.9 percent RevPAR decline for the overall hotel industry.

“We believe that, despite the current economic climate, families will continue to appreciate and seek opportunities to spend time together in a fun, safe and convenient location,” Schaefer said.  “We believe our resorts can be a terrific option for families that want to focus on taking shorter, closer-to-home trips.  We believe such ‘stay-cations’ may become even more common in 2009 and that our properties are well positioned to take advantage of that trend.

“Our Great Wolf Lodge brand same store RevPAR increased 1.4 percent in January.  This was significantly better than the overall hotel industry, which reported double-digit January RevPAR declines.  Although January is normally the lightest operating month in our first quarter, we are encouraged by this relatively strong early 2009 operating performance as we prepare to enter the traditionally busy Spring break period.”

The company increased its focus on cost control during the 2008 fourth quarter.  “Like all companies today, we are stressing careful management of all aspects of our cost structure, including labor,” Schaefer continued.  “We have aggressively evaluated the operations at our resorts and made adjustments consistent with changing occupancy projections.  Our booking window has remained relatively consistent over the past few months, with about 70 percent of our transient rooms being booked within 21 days of arrival.  With this booking timeframe, we will continue to concentrate on proper staffing and other cost levels.  Importantly, though, we also maintain a strong emphasis on guest satisfaction.  Our guest satisfaction scores have remained high, even as we adjust our overall cost structure at the resorts.”

Similar to leisure trends in the fourth quarter, the company saw group business also decline during the period.  “Our same store number of group rooms was down 8 percent, or about 1,250 rooms, during the fourth quarter,” Schaefer commented.  “We believe this is primarily due to the widespread economic shifts that started in September 2008.  For the full year 2008, our same store group rooms were up more than 29 percent.  As a result, we believe the long-term trends in this business can be favorable for us and will remain an important part of our plan to increase our mid-week business.”

Fourth quarter operating statistics for the company’s portfolio of Great Wolf Lodge resorts were as follows:
 
 

                        Great Wolf Lodge Brand - Same Store Comparison (a)
                              Q4              Q4          Increase (Decrease)
                              2008            2007          $            %
    Occupancy                 48.8%           51.4%          N/A   (260) bps
    ADR                    $239.54         $246.69        $(7.15)      (2.9)%
    RevPAR                 $116.88         $126.91       $(10.03)      (7.9)%
    Total RevPOR           $364.21         $378.85       $(14.64)      (3.9)%
    Total RevPAR           $177.71         $194.89       $(17.18)      (8.8)%
 

                          Great Wolf Lodge Brand - Generation I Resorts Only
                                    - Same Store Comparison (b)
                              Q4              Q4          Increase (Decrease)
                              2008           2007           $            %
    Occupancy                 40.0%           43.5%      N/A       (350) bps
    ADR                    $184.84         $201.52       $(16.68)      (8.3)%
    RevPAR                  $73.99          $87.65       $(13.66)     (15.6)%
    Total RevPOR           $287.40         $305.50       $(18.10)      (5.9)%
    Total RevPAR           $115.05         $132.87       $(17.82)     (13.4)%
 

                              Great Wolf Lodge Brand - Generation II Resorts
                                      Only - Same Store Comparison (c)
                              Q4              Q4          Increase (Decrease)
                              2008            2007          $            %
    Occupancy                 55.0%           57.1%          N/A   (210) bps
    ADR                    $267.54         $271.03        $(3.49)      (1.3)%
    RevPAR                 $147.02         $154.65        $(7.63)      (4.9)%
    Total RevPOR           $403.53         $418.36       $(14.83)      (3.5)%
    Total RevPAR           $221.75         $238.72       $(16.97)      (7.1)%
 

    (a)  Same store comparison includes only Great Wolf Lodge resorts that
         were open for all of both Q4 2008 and Q4 2007 (that is, the
         company's Wisconsin Dells, Sandusky, Traverse City, Kansas City,
         Williamsburg, Pocono Mountains, Niagara Falls and Mason resorts).
    (b)  Generation I Resorts same store comparison includes Great Wolf Lodge
         resorts of approximately 300 rooms or less that were open for all of
         both Q4 2008 and Q4 2007 (that is, the company's Wisconsin Dells,
         Sandusky, Traverse City and Kansas City resorts).
    (c)  Generation II Resorts same store comparison includes Great Wolf Lodge
         resorts of approximately 400 rooms or more that were open for all of
         both Q4 2008 and Q4 2007 (that is, the company's Williamsburg, Pocono
         Mountains, Niagara Falls and Mason resorts).

Note:  The company’s Generation I resorts, as described in the tables above, are generally smaller resorts than the company’s current resort development model and are located in or near smaller markets, primarily in the upper Midwest.  The company’s Generation II resorts, as described in the tables above, are generally larger resorts that better represent the company’s current resort development model, include a more extensive range of amenities than Generation I resorts, and are located in or near larger metropolitan areas.

Capital Structure and Liquidity
 
The company recently completed negotiations on an extension of the maturity date to November 30, 2009 for the $76.8 million mortgage loan on its Mason, Ohio resort.  As part of the extension transaction, the company provided the Mason mortgage loan lenders with a partial corporate guaranty and a cross-collateralization on the Grapevine, Texas Great Wolf Lodge resort property; the partial guaranty and cross-collateralization will remain in place until the company makes a $15.0 million principal reduction of the Mason loan over the remaining term of the loan.

“Excluding the Mason mortgage loan, we do not expect to have any significant debt maturities until mid-2011,” said James A. Calder, chief financial officer.  “This gives us a cushion to wait for some stabilization in the currently disrupted capital markets.  On the Mason loan, we believe we can satisfy the required $15.0 million principal reduction through cash available from operations in 2009.

“Going forward, we have no significant long-term capital commitments for construction or development of new properties,” Calder continued.  “Our largest remaining capital commitment currently is for the completion of the construction of the new Concord, N.C. resort, which opens next month.  We expect that all remaining construction costs of that resort will be funded from the construction loan in place for that property.

“Looking forward, the current outlook for the future availability of capital for development is uncertain.  As we have stated previously, we do not plan to make any material commitments or to begin construction on future development projects until we have both the debt and equity capital fully committed.  We still expect our near-term development plans to focus exclusively on licensing arrangements and joint ventures.  That strategy should allow us to use capital most effectively as we look to continue to grow our brand.”

Construction and Development Update

The company opened a 203-suite and 20,000-square-foot expansion to the Grapevine, Texas resort in mid-December.  “We have had a positive response to the resort and the expansion generated strong occupancy during the December holiday season,” Schaefer noted.  “We believe the combination of additional rooms and meeting space will allow us to capitalize on this strong leisure and group business market.”

Great Wolf Resorts conducted a hard-hat tour in December at the 402-suite Great Wolf Lodge resort currently under construction in Concord, N.C. for more than 500 dignitaries, media and targeted guest representatives.  The development costs for the property remain on budget.  The property is expected to have its soft opening in late March, prior to spring break.  “The nearby Lowe’s Motor Speedway recently completed a major expansion which will accommodate a larger number of major new family-oriented events that we believe will positively impact the area and the potential of our new resort,” Schaefer commented.

As previously announced, the company has signed a letter of intent with the Mashantucket Pequot Tribal Nation to develop a Great Wolf Lodge resort on tribal-owned land near its southeast Connecticut reservation and Foxwoods Resort Casino.  “As we have indicated previously, we will make no material development commitments until we have debt and equity capital in place,” Schaefer said.  “The timing of this project, as a result, is contingent upon a change in status of the capital markets.  We will, however, continue to move forward on the design and permitting activities so that we can get the project underway rapidly when the capital markets begin to rebound.
“If there is an opportunity in the current credit crunch, it is that virtually all indoor waterpark resort development by our competitors has come to a halt,” she noted.  “We believe a challenging environment in our business sector will ultimately benefit nationally-focused companies with a strong brand and the best people and resources available – in other words, companies like us.  We intend to take advantage of our place as the industry leader by positioning ourselves both to increase efficiencies at our existing resorts and to plan effectively for our future growth.  We remain optimistic about the long-term prospects for the company.”

Key Financial Data

As of December 31, 2008, Great Wolf Resorts had:

• Total unrestricted cash and cash equivalents of $14.2 million.
• Total secured debt of $414.5 million.
• Total unsecured debt (junior subordinated debentures) of $80.5 million.
• Weighted average cost of total debt of 6.1 percent.
• Weighted average debt maturity of 6.6 years.
• Total construction in progress for consolidated resorts and other projects currently under construction but not yet opened of $117.1 million.

Outlook and Guidance

“Similar to many other companies, our near-term outlook for the economy is uncertain,” Schaefer said.  “We believe, however, that our business model can continue to outperform the overall hotel industry through this current downturn.  Compared to other alternatives, we can provide a great guest experience with high value, convenient, drive-to locations, and a strong and growing brand.  We expect to open the North Carolina resort in about 30 days, which will tap into new markets and further geographically extend our brand.  As we grow, though, we are focused on increasing efficiencies within our portfolio, thereby building and preserving capital until future opportunities are available.”

The company provides the following outlook and earnings guidance for the first quarter and full year 2009 (amounts in thousands, except per share data).  The outlook and earnings guidance information is based on the company’s current assessment of business conditions, including consumer demand and discretionary spending trends, as of February 24, 2009.  The company may update any portion of its business outlook at any time as conditions dictate:
 

                                        Q1 2009           Full year 2009
                                     Low       High      Low        High
    Net income (loss)              $(6,600)  $(5,400) $(25,020)   $(20,020)
    Net income (loss) per diluted
     share                          $(0.21)   $(0.17)   $(0.81)     $(0.65)
    Adjusted EBITDA (a)            $12,400   $14,400   $58,600     $66,600
    Adjusted net income (loss) (a) $(4,560)  $(3,360) $(21,600)   $(16,800)
    Adjusted net income (loss) per
     diluted share                  $(0.15)   $(0.11)   $(0.70)     $(0.54)

    (a) For reconciliations of Adjusted EBITDA and Adjusted net income (loss),
        see tables accompanying this press release.

 The outlook provided above for the 2009 first quarter reflects the expected shift of the majority of the traditionally busy Spring break period from March in 2008 to April in 2009, due to a shift in date of the Easter holiday.  The forecast above assumes a first quarter 2009 same store RevPAR decline of approximately 10 percent and a full year 2009 same store RevPAR decline of approximately 5-8 percent.

Adjusted EBITDA and Adjusted net income (loss) are non-GAAP financial measures within the meaning of the Securities and Exchange Commission (SEC) regulations.  See the discussion below in the “Non-GAAP Financial Measures” section of this press release.  Reconciliations of Adjusted EBITDA and Adjusted net income (loss) are provided in the tables of this press release.

Great Wolf Resorts, Inc. will hold a conference call to discuss its fourth quarter and full year 2008 results today, February 25, at 10 a.m. ET to discuss its results.  Stockholders and other interested parties may listen to a simultaneous webcast of the conference call on the Internet by logging onto the company’s Web site, www.greatwolf.com, or www.streetevents.com, or may call (800) 218-4007, reference number 11125895.  A recording of the call will be available by telephone until midnight on Wednesday, March 4, 2009, by dialing (800) 405-2236, reference number 11125895.  A replay of the call will be posted on the company’s Web site through March 25, 2009.

Non-GAAP Financial Measures

Included in this press release are certain “non-GAAP financial measures,” which are measures of the company’s historical or future performance that are different from measures calculated and presented in accordance with GAAP, within the meaning of applicable SEC rules, that Great Wolf Resorts believes are useful to investors.  They are as follows: (i) Adjusted EBITDA and (ii) Adjusted net income (loss).  The following discussion defines these terms and presents the reasons the company believes they are useful measures of its performance.

Great Wolf Resorts defines Adjusted EBITDA as net income (loss) plus (a) interest expense, net, (b) income taxes, (c) depreciation and amortization, (d) non-cash employee compensation and professional fees, (e) costs associated with early extinguishment of debt or postponement of debt offerings, (f) opening costs of resorts under development, (g) equity in earnings (loss) of unconsolidated related parties, (h) loss on disposition of property, (i) other unusual or non-recurring items, and (j) minority interests.  The company defines Adjusted net income (loss) as net income (loss) without the effects of (a) non-cash employee compensation and professional fees, (b) costs associated with early extinguishment of debt or postponement of debt offerings, (c) opening costs of resorts under development (including costs incurred by unconsolidated joint ventures), (d) loss on disposition of property, (e) other unusual or non-recurring items, and (f) non-normalized income tax expense.

Adjusted EBITDA and Adjusted net income (loss) as calculated by the company are not necessarily comparable to similarly titled measures by other companies.  In addition, Adjusted EBITDA (a) does not represent net income or cash flows from operations as defined by GAAP, (b) is not necessarily indicative of cash available to fund the company’s cash flow needs, and (c) should not be considered as an alternative to net income, operating income, cash flows from operating activities or the company’s other financial information as determined under GAAP.  Also, Adjusted net income does not represent net income as defined by GAAP.

Management believes Adjusted EBITDA is useful to an investor in evaluating the company’s operating performance because a significant portion of its assets consists of property and equipment that are depreciated over their remaining useful lives in accordance with GAAP.  Because depreciation and amortization are non-cash items, management believes that presentation of Adjusted EBITDA is a useful measure of the company’s operating performance.  Also, management believes measures such as Adjusted EBITDA are widely used in the hospitality and entertainment industries to measure operating performance.

Similarly, management believes Adjusted net income (loss) is a useful performance measure because certain items included in the calculation of net income may either mask or exaggerate trends in the company’s ongoing operating performance.  Furthermore, performance measures that include these types of items may not be indicative of the continuing performance of the company’s underlying business.  Therefore, the company presents Adjusted EBITDA and Adjusted net income (loss) because they may help investors to compare Great Wolf Resorts’ ongoing performance before the effect of various items that do not directly affect the company’s ongoing operating performance.
 

    Great Wolf Resorts, Inc.
    Consolidated Statements of Operations
    (in thousands, except per share amounts)

                                         Three     Three
                                         Months   Months     Year     Year
                                         Ended     Ended     Ended    Ended
                                        December December  December  December
                                        31, 2008 31, 2007  31, 2008  31, 2007
                                        -------------------------------------
    Revenues:
       Rooms                             $27,594  $24,602  $143,395  $112,261
       Food and beverage                   8,057    6,968    38,808    29,588
       Other hotel operations              6,926    6,094    35,365    27,085
       Management and other fees           1,489    1,643     8,144     7,169
                                        --------  -------  --------  --------
                                          44,066   39,307   225,712   176,103
       Other revenue from managed
        properties                         4,833    2,625    19,826    11,477
                                        --------  -------  --------  --------
    Total revenues                        48,899   41,932   245,538   187,580

    Operating expenses:
       Resort departmental expenses       17,372   14,871    80,083    64,016
       Selling, general and
        administrative                     9,788   11,532    51,219    45,914
       Property operating costs            6,580    5,157    30,786    21,170
       Opening costs for resorts under
        development                        2,335    5,514     6,685    10,228
       Depreciation and amortization      11,326    9,806    46,081    36,372
       Impairment loss on investment in
        affiliates                        18,777      -      18,777       -
       Goodwill impairment                17,430      -      17,430       -
       Loss on disposition of property       -        958       317     1,286
                                        --------  -------  --------  --------
                                          83,608   47,838   251,378   178,986
       Other expenses from managed
        properties                         4,833    2,625    19,826    11,477
                                        --------  -------  --------  --------
    Total operating expenses              88,441   50,463   271,204   190,463

    Operating loss                       (39,542)  (8,531)  (25,666)   (2,883)

    Investment income                       (558)    (331)   (2,187)     (667)
    Interest income                         (246)    (394)   (1,424)   (2,758)
    Interest expense                       6,678    3,783    27,277    14,887
                                        --------  -------  --------  --------

    Loss before minority interests,
     equity in loss of unconsolidated
     affiliates and income taxes         (45,416) (11,589)  (49,332)  (14,345)

    Income tax benefit                   (10,674)  (4,695)  (11,956)   (5,859)
    Minority interests, net of tax           -        -         -        (452)
    Equity in loss of unconsolidated
     affiliates, net of tax                1,737      787     3,349     1,547
                                        --------  -------  --------  --------

    Net loss                            $(36,479) $(7,681) $(40,725)  $(9,581)
                                        ========  =======  ========  ========

    Net loss per share:
       Basic                              $(1.18)  $(0.25)   $(1.32)   $(0.31)
       Diluted                            $(1.18)  $(0.25)   $(1.32)   $(0.31)

    Weighted average common shares
     outstanding:
       Basic                              30,927   30,570    30,828    30,533
       Diluted                            30,927   30,570    30,828    30,533
 

    Great Wolf Resorts, Inc.
    Reconciliations of Non-GAAP Financial Measures
    (in thousands, except per share amounts)

                                           Three     Three
                                           Months   Months     Year    Year
                                           Ended     Ended    Ended   Ended
                                         December December  December December
                                         31, 2008 31, 2007  31, 2008 31, 2007
                                        --------- -------- --------- --------
    Net loss                            $(36,479) $(7,681) $(40,725) $(9,581)

    Adjustments:
       Opening costs for resorts under
        development                        2,335    5,514     6,685   10,228
       Non-cash employee compensation
        and professional fees                229    3,076       222    5,080
       Depreciation and amortization      11,326    9,806    46,081   36,372
       Loss on disposition of property       -        958       317    1,286
       Interest expense, net               6,432    3,389    25,853   12,129
       Separation payments                   -        -       1,258      -
       Minority interest expense, net of
        tax                                  -        -         -       (452)
       Impairment loss on investment in
        affiliates                        18,777      -      18,777      -
       Goodwill impairment                17,430      -      17,430      -
       Environmental liability costs          14      320       276      320
       Equity in loss of unconsolidated
        affiliates, net of tax             1,737      787     3,349    1,547
       Income tax benefit                (10,674)  (4,695)  (11,956)  (5,859)
                                        --------- -------- --------- --------

    Adjusted EBITDA (1)                  $11,127  $11,474   $67,567  $51,070
                                        ========= ======== ========= ========
 

    Net loss                            $(36,479) $(7,681) $(40,725) $(9,581)

    Adjustments:
       Opening costs for resorts under
        development                        2,335    5,514     6,685   10,228
       Non-cash employee compensation
        and professional fees                229    3,076       222    5,080
       Debt-related costs                    -        -       1,333      -
       Loss on disposition of property       -        958       317    1,286
       Separation payments                   -        -       1,258      -
       Impairment loss on investment in
        affiliates                        18,777      -      18,777      -
       Goodwill impairment                17,430      -      17,430      -
       Environmental liability costs          14      320       276      320
       Equity in loss of unconsolidated
        affiliates (2)                       -        484     1,867    1,161
       Income tax rate adjustment (3)     (7,365)  (4,213)  (10,793)  (7,517)
                                        --------- -------- --------- --------

    Adjusted net (loss) income (1)       $(5,059) $(1,542)  $(3,353)    $977
                                        ========= ======== ========= ========

    Adjusted net (loss) income per
     share:
       Basic                              $(0.16)  $(0.05)   $(0.11)   $0.03
       Diluted                            $(0.16)  $(0.05)   $(0.11)   $0.03

    Adjusted EBITDA per diluted share      $0.36    $0.38     $2.19    $1.67

    Weighted average shares outstanding:
       Basic                              30,927   30,570    30,828   30,533
       Diluted                            30,927   30,570    30,828   30,533
 

    Great Wolf Resorts, Inc.
    Operating Statistics - Great Wolf Lodge Resorts

                                          Three Months Ended    Year Ended
                                             December 31,      December 31,
                                            2008     2007     2008     2007

    Great Wolf Lodge Brand Properties - All
         Occupancy                           49.2%    51.8%    63.6%    62.2%
         ADR                               $242.82  $245.76  $253.85  $248.66
         RevPAR                            $119.43  $127.36  $161.33  $154.60
         Total RevPOR                      $376.05  $379.14  $387.70  $374.20
         Total RevPAR                      $184.96  $196.48  $246.39  $232.66

    Great Wolf Lodge Brand Properties - Same Store (4)
         Occupancy                           48.8%    51.4%    62.7%    62.1%
         ADR                               $239.54  $246.69  $248.51  $248.87
         RevPAR                            $116.88  $126.91  $155.83  $154.64
         Total RevPOR                      $364.21  $378.85  $373.91  $374.11
         Total RevPAR                      $177.71  $194.89  $234.47  $232.46

    Great Wolf Lodge Brand Properties - Consolidated (5)
         Occupancy                           50.8%    53.7%    64.4%    63.2%
         ADR                               $263.32  $261.52  $269.95  $262.45
         RevPAR                            $133.73  $140.34  $173.79  $165.87
         Total RevPOR                      $403.12  $396.13  $406.12  $389.49
         Total RevPAR                      $204.74  $212.57  $261.46  $246.16

    Great Wolf Lodge Brand - Generation I Resorts - Same Store (6)
         Occupancy                           40.0%    43.5%    56.6%    58.7%
         ADR                               $184.84  $201.52  $196.25  $202.19
         RevPAR                             $73.99   $87.65  $110.98  $118.59
         Total RevPOR                      $287.40  $305.50  $293.86  $300.16
         Total RevPAR                      $115.05  $132.87  $166.19  $176.05

    Great Wolf Lodge Brand - Generation II Resorts - Same Store (7)
         Occupancy                           55.0%    57.1%    67.0%    64.6%
         ADR                               $267.54  $271.03  $279.58  $279.22
         RevPAR                            $147.02  $154.65  $187.44  $180.47
         Total RevPOR                      $403.53  $418.36  $421.50  $422.19
         Total RevPAR                      $221.75  $238.72  $282.60  $272.88
 
 

    The company defines its operating statistics as follows:
         Occupancy is calculated by dividing total occupied rooms by total
         available rooms.
         Average daily rate (ADR) is the average daily room rate charged and
         is calculated by dividing  total rooms revenue by total occupied
         rooms.
         Revenue per available room (RevPAR) is the product of (a) occupancy
         and (b) ADR.
         Total revenue per occupied room (Total RevPOR) is calculated by
         dividing total resort revenue (including revenue from rooms, food
         and beverage, and other amenities) by total occupied rooms.
         Total revenue per available room (Total RevPAR) is the product of
         (a) occupancy and (b) Total RevPOR.
 

    Great Wolf Resorts, Inc.
    Reconciliations of Outlook Financial Information (8)
    (in thousands, except per share amounts)

                                                Three Months         Year
                                                   Ending           Ending
                                                  March 31,      December 31,
                                                     2009            2009

    Net loss                                       $(6,000)         $(22,620)

    Adjustments:
        Interest expense, net                        6,800            35,100
        Income tax benefit                          (4,000)          (15,080)
        Depreciation and amortization               12,200            56,600
        Non-cash employee compensation and
         professional fees                             400             1,700
        Equity in loss in unconsolidated
         affiliates                                  1,000             2,900
        Opening costs of resorts under
         development                                 3,000             4,000

    Adjusted EBITDA (1)                            $13,400           $62,600
 

    Net loss                                       $(6,000)         $(22,620)

    Adjustments to net loss:
        Non-cash employee compensation and
         professional fees                             400             1,700
        Opening costs of resorts under
         development                                 3,000             4,000
        Income tax rate adjustment (3)              (1,360)           (2,280)

    Adjusted net income (loss) (1)                 $(3,960)         $(19,200)

    Net loss per share:
        Basic                                       $(0.19)           $(0.73)
        Diluted                                     $(0.19)           $(0.73)

    Adjusted net income (loss) per share:
        Basic                                       $(0.13)           $(0.62)
        Diluted                                     $(0.13)           $(0.62)

    Weighted average shares outstanding:
        Basic                                       31,000            31,200
        Diluted                                     31,000            31,200
 

    (1) See discussions of Adjusted EBITDA and Adjusted net income (loss)
        located in the "Non-GAAP Financial Measures" section of this press
        release.

    (2) This amount represents the company's equity method loss recorded for
         the   joint venture that owns a Great Wolf Lodge resort that was
        under   construction in Grand Mound, Washington through March 2008.

    (3) This amount represents an adjustment to recorded income tax expense to
        bring the overall effective tax rate to an estimated normalized rate
        of  40%. This effective tax rate differs from the effective tax rates
        in the  company's historical statements of operations.

    (4) Same store properties comparison includes Great Wolf Lodge resorts
        that were open for the full periods in both 2008 and 2007 (that is,
        the company's Wisconsin Dells, Sandusky, Traverse City, Kansas City,
         Williamsburg, Pocono Mountains, Niagara Falls and Mason resorts).

    (5) Consolidated properties comparison includes Great Wolf Lodge resorts
        that are consolidated for financial reporting purposes (that is, the
        company's Traverse City, Kansas City, Williamsburg, Pocono Mountains,
        Mason and Grapevine resorts).

    (6) Generation I properties same store comparison includes only Great Wolf
        Lodge resorts of approximately 300 rooms or less that were open for
        all of both Q4 2008 and Q4 2007 (that is, the company's Wisconsin
        Dells, Sandusky, Traverse City and Kansas City resorts).

    (7) Generation II properties same store comparison includes only Great
        Wolf Lodge resorts of approximately 400 rooms or more that were open
        for all of both Q4 2008 and Q4 2007 (that is, the company's
        Williamsburg, Pocono Mountains, Niagara Falls and Mason resorts).

    (8) The company's outlook reconciliations use the mid-points of its
        estimates of Adjusted EBITDA and Adjusted net income.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws.  All statements, other than statements of historical facts, including, among others, statements regarding Great Wolf Resorts' future financial position, business strategy, projected levels of growth, projected costs and projected performance and financing needs, are forward-looking statements.  Those statements include statements regarding the intent, belief or current expectations of Great Wolf Resorts, Inc. and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions.  Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements.  Many of these factors are beyond the company's ability to control or predict.  Such factors include, but are not limited to, competition in the company’s markets, changes in family vacation patterns and consumer spending habits, regional or national economic downturns, the company’s ability to attract a significant number of guests from its target markets, economic conditions in its target markets, the impact of fuel costs and other operating costs, the company's ability to develop new resorts in desirable markets or further develop existing resorts on a timely and cost efficient basis, the company's ability to manage growth, including the expansion of the company’s infrastructure and systems necessary to support growth, the company’s ability to manage cash and obtain additional cash required for growth, the general tightening in the U.S. lending markets as a result of the subprime loan crisis, potential accidents or injuries at its resorts, its ability to achieve or sustain profitability, downturns in its industry segment and extreme weather conditions, increases in operating costs and other expense items and costs, uninsured losses or losses in excess of the company's insurance coverage, the company's ability to protect its intellectual property, trade secrets and the value of its brands, current and possible future legal restrictions and requirements.  A further description of these risks, uncertainties and other matters can be found in the company’s annual report and other reports filed from time to time with the Securities and Exchange Commission, including but not limited to the company’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission.  Great Wolf Resorts cautions that the foregoing list of important factors is not complete and assumes no obligation to update any forward-looking statement that it may make.

Management believes these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations.  All written and oral forward-looking statements attributable to Great Wolf Resorts or persons acting on its behalf are qualified in their entirety by these cautionary statements.  Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.

About Great Wolf Resorts, Inc.

Great Wolf Resorts, Inc.® (NASDAQ: WOLF), Madison, Wis., is North America’s largest family of indoor waterpark resorts, and, through its subsidiaries and affiliates, owns and operates its family resorts under the Great Wolf Lodge® and Blue Harbor Resort™ brands.  Great Wolf Resorts is a fully integrated resort company and owns and/or manages Great Wolf Lodge locations in: Wisconsin Dells, Wis.; Sandusky, Ohio; Traverse City, Mich.; Kansas City, Kan.; Williamsburg, Va.; the Pocono Mountains, Pa.; Niagara Falls, Ontario; Mason, Ohio; Grapevine, Texas; Grand Mound, Wash., and Blue Harbor Resort & Conference Center in Sheboygan, Wis.  A Great Wolf Lodge currently is under construction in Concord, N.C.

The company’s resorts are family-oriented destination facilities that generally feature 300 to 400 rooms and a large indoor entertainment area measuring 40,000 to 100,000 square feet.  The all-suite properties offer a variety of room styles, arcade/game rooms, fitness centers, themed restaurants, spas, supervised children’s activities and other amenities.  Additional information may be found on the company’s Web site at www.greatwolf.com.
 

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Contact:

Alex Lombardo Steve Shattuck
 Investors Media
 (703) 573-9317 (608) 661-4731
 

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Also See: Great Wolf Resorts Reports 2008 Third Quarter Net Income of $2.2 million Compared to Net Income of $1.8 million in the Prior Year's Third Quarter; Mid-week Group Business and 'stay- cation' families Provide Boost / Hotel Operating Statistics / November 2008
Great Wolf Resorts Inc. Narrows 4th Qtr 2007 Loss to $7.7 million Compared to a Loss of $49 million in the Prior Year Quarter; Operates 10 Resorts With Two Under Construction / Hotel Operating Statistics / February 2008
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