News for the Hospitality Executive
26 Hotel Waterpark Resorts Opened in 2011 in USA
By Jeff Coy, ISHC
Amidst a slow economic recovery in the USA, twenty-six (26) hotel indoor waterparks opened in 2011, up from 19 in 2010 and three less than in 2009 --- bringing the total count to 290, an increase of 9.8% year over year. This compares with 2006 and 2007, before the impact of the global recession, when 38 and 40 hotel waterparks opened annually in the US and the construction pipeline was filled. Things are looking brighter!
New entries include (1) Wings & Waves Indoor Waterpark & Air Museum in Oregon, (2) an indoor wave pool at Splash Lagoon in Erie PA and (3) a 60,000 sf indoor waterpark at Jay Peak Ski Resort in Vermont, shown here.
Hotel waterparks are popular with families and hotel owners because they fill empty rooms at higher room rates than hotels without indoor waterparks.
Hotels with indoor waterparks have outgrown the general hotel industry every year for over a decade, reaching 34% growth in 2006 and 9.8% in 2011 compared to hotel industry supply growth of 2% to the current no growth.
An indoor waterpark is like an outdoor waterpark, except all the fun is packed into a cube which is attached to a hotel that is open 365 days a year, rain or shine. Many hotels and resorts have ups and downs. They are seasonal properties with high periods and low periods from month to month and from weekday to weekends. The indoor waterpark has an amazing ability to fill empty rooms with families and young children on weekends all year long and whenever kids are out of school.
Hotel Waterparks Opened In 2011
What Opened in the Last Half of 2011?
In July, the Renaissance Orlando at SeaWorld completed a 5-year $35 million renovation in part by expanding its pool area. The 716-room hotel, owned by Marriott International, constructed the $3.5 million, 174,000 sf R Aqua Zone for children. Water play equipment included a pair of slides, periscope guns, a gyroscope spinner, a water windmill and more. The pool area also includes an area for toddlers with a tot pool, mini slide, 20 water jets and a rain tree. Website is www.renaissanceseaworldorlando.com. Phone is 407-351-5555.
Hyatt Place East End in Riverhead NY opened with 100 rooms adjacent to Atlantis Marine World Aquarium and the Sea Star Ballroom. You can go on a shark dive, take a pirate snorkeling adventure and hang out at a sea lion coliseum. The 120,000-gallon aquarium has been
going strong for 11 years, drawing more than 300,000 visitors each of the last two years, according to owner Jim Bissett Jr. The hotel opened in July 2011. America Resort Management LLC of Erie PA was selected to operate the full service hotel and banquet center. Steve Shauger is general manager. Go to www.atlantismarineworld.com or call 631-208-9200.
Fairview Beachfront Inn & Castaway Bay Waterpark opened in August with 60 rooms in Mackinaw City MI. The former Aqua Grand inn provides 2000 feet of private sandy beach, views of Lake Huron and Mackinac Island as well as an outdoor-indoor waterpark. Call 231-436-8831 or toll free 1-800-822-8314.
The popular Splash Lagoon in Erie PA opened a new 250,000-gallon, 32,000 sf indoor wave pool in August. The recession delayed the original timetable, according to owners Nick Scott Sr and Nick Scott Jr of Scott Enterprises who spent between $8 million and $9 million on the water attraction, which produces waves from 3-feet to 5-feet high with different patterns. The expansion gives Splash Lagoon about 110,000 sf of aquatic space. Splash Lagoon is connected to three hotels with 297 rooms. Nearly 1.8 million people have visited Splash Lagoon since it opened in 2003. Call the Scotts at 814-868-9500 or go to www.splashlagoon.com.
Clarion Hotel & Palm Island Waterpark in Batavia NY made its splash in September 2011, opening a $2.5 million, 12,000 sf indoor waterpark with two 24-foot high body slides, two tipping buckets, a rope pull shower, two smaller slides, water sprays, a basketball hoop and a hot tub. There are also a game room and food stand. Owner Chan Patel says he came up with the idea about 5 years ago during the long winter when he typically had to lay off hotel employees. Let’s do something year-round, he said. Actually, Patel has hired 14 more workers for the waterpark. For more, go to www.parkislandwaterpark.com.
Holiday Inn Express Clinton OK opened in September 2011 with 67 units and an indoor pool. Almost immediately, owner Walter Schumacher started construction on his Water Zoo concept slated to open beside the hotel in summer 2012. The 28,000 sf indoor waterpark features a movable roof, by OpenAire of Toronto, that opens to the warm air of summer and closes when it’s cold or raining. Retractable roofs are the ideal for year round indoor-outdoor waterparks. Revenues are never at the mercy of the weather, which dramatically increases profitability. Water Zoo will be open to both hotel guests and locals. Contact Walter at Schumacher Investments South LLC. Phone is 580-323-3555. Website is www.water-zoo.com. Email is email@example.com.
A new 84-room Quality Inn & Suites with a 2,500 sf indoor water feature on 18 acres near I-75 & I-140 in Knoxville TN. The water feature has two slides, one heated pool and a hot tub. Nearby is Zuma Fun Center. Hotel owner is North Cedar Hospitality LLC of Knoxville. Contact owner at 865-329-7690 or email firstname.lastname@example.org.
Mt Olympus Water & Theme Park in Wisconsin Dells WI added the 130-room Copa Cabana to its portfolio of recently acquired older hotels. Owners Nick and Eva Laskaris bought property in November 2011 following a June purchase of 1000 hotel rooms for $20 million. Excavation is underway at Mount Olympus on the ruins of the Lost City of Atlantis, an outdoor waterpark that will rise 6 stories in the air and cover 3 acres. The couple acquired the 7 hotels to support their goal of being the world’s largest waterpark. To talk with Nick and Eva Laskaris, call 608-254-2490 or go to www.mtolympuspark.com.
Adrenalina Extreme Stores had always planned to install a Flowrider surf simulator at their store in the American Dream Mall at the Meadowlands NJ, but construction stopped at the beginning of the recession. Efforts by mall owner Triple Five to resume construction are slowed by permit requirements. The delays likely will push resumption of construction into mid 2012, according to the developer’s PR man Alan Marcus. The goal remains to open most of the original retail and entertainment sections of the mall in time for the Feb 2, 2014 Super Bowl at the Meadowlands. Adrenalina executive David Malamud says his company is still opening a store there, but there’s much work to be done first. Adrenalina has Flowriders installed in their Tampa FL and Plano TX stores. To reach Adrenalina, call 305-770-4488.
In our last Construction Report dated June 15, 2011, we reported that pro football player Jamal Lewis and his partner had bought the troubled Maui Sands Hotel & Waterpark in Sandusky OH for $3 million and was trying to open the property in the second half of 2011. But the purchase did not close. During the final days of 2011, MKSP shelled out $2 million in an online auction to secure the winning bid for the Maui Sands. Kirit Parmar, president of Maryland-based MKSP LLC said his company tied up all the loose ends on the purchase and plans to re-introduce parts of Maui Sands to the market in 2012. For more, contact the hotel at 419-626-6671.
Schlitterbahn in New Braunfels TX added 12 treehouse-themed resort rooms and a new 3,600-foot long whitewater river. Sixty-eight (68) old cabins were removed to make way for a new hotel on site. Talk to co-owner Jeff Henry at 830-625-2351 or go to www.schlitterbahn.com.
Jay Peak Ski Resort in Jay VT opened its 40,000 sf indoor waterpark in the final days of 2011 and will open its new 120-room Jay Hotel in February 2012. Bill Stenger, president and co-owner of Jay Peak, has adopted the 4-season strategy for success in the ski business --- create revenue-producing activities for winter, spring, summer and fall.
Jay Peak boasts a state of the art indoor waterpark with slides, pools, lazy rivers and water play areas covered by a massive retractable roof enclosure that opens up in warmer weather. The indoor-outdoor waterpark transformed Jay Peak from a winter-only spot to a year round resort destination.
Waterpark features include an Aqualoop, whose trap door drops out, sending riders plummeting 70 feet down a twisting tube. The waterpark will also have one of the country’s longest lazy rivers.
Black River Design of Montpelier VT designed the waterpark built by DEW Construction of Williston VT and OpenAire of Toronto ON. OpenAire’s retractable roof won’t just look good, it will be good for the environment too. Unlike traditional structures, it leaves a smaller carbon footprint and saves more energy. When the enclosure is open, humidity is exhausted naturally through the roof, so mechanical systems that control the atmosphere can be turned off, saving energy. Plus the polycarbonate roof and insulated glass lets in lots of sunlight, so no energy is used to light the building during daylight hours.
Expansions/Renovations Opened in 2011
In March, the Lightstone Group of New York paid $10 million for the 367-room Crowne Plaza North Shore Boston and its 65,000 sf Coco Key indoor waterpark. The hotel quietly took on the name of Coco Key Hotel & Water Resort while in the process of re-flagging, according to general manager Matt Doucette. It was built at a cost of $18.6 million in 2007.
In April, Great Wolf Resorts Inc sold its 182-suite Blue Harbor Resort in Sheboygan WI to a joint venture between Claremont Companies of Bridgewater MA and New Frontiers Capital of Auburn Hills MI for $4.2 million. The $54 million project was built in 2004 in a new downtown tourist district. As part of the deal, Great Wolf paid $2.5 million to the city to settle future room tax and property tax obligations. The sale also reduced Great Wolf’s $550 million debt. Claremont owns nearly 13,000 apartments in the US and eight hotels in the US and Canada. New Frontiers Capital is an owner of the Mountain Grand Lodge, spa and Avalanche Bay Indoor Waterpark at Boyne Mountain Ski Resort in Michigan.
In July, the rejuvenated Lake Lawn Resort in Delavan WI reopened with new owners. Jim Drescher and his investment group bought the resort in May for $9.5 million. There was no mention of the Phase 2 plans of the former owners, which called for 800 new rooms, a 30,000 sf outdoor waterpark and 130,000 sf indoor waterpark.
In August, Batra Hospitality Group Inc bought the Best Western Grand Seasons in Waupaca WI. Previously owned by Grand Seasons Inc, the hotel was sold at a 4.1% cap rate and was achieving a 55% occupancy at the time of the sale. The hotel has 90 rooms and contains approximately 10,000 sf of meeting space, fitness center, lounge and indoor waterpark. Steve Marx of Hotel Source Inc in Chicago handled the sale.
In August, Canadian investment firm Onex Corp of Toronto paid $864 million for a 58% share of Jeld Wen, a door and window manufactuer based in Klamath Falls OR. Jeld-Wen owns Silver Mountain, a hotel waterpark resort in Kellogg ID. Last winter, Jeld-Wen sold its other waterpark resorts (Eagle Crest near Redmond, Brasada Ranch near Bend and Running Y in Klamath Falls) to a partnership led by Northview Hotel Group of Westport CT.
In September, Allied Hospitality of Houston bought the (former HI) Caribbean Cove Hotel & Waterpark in Indianapolis from General Hotels Corp.
In October, a Maryland man was poised to buy the 304-room Maui Sands Hotel & Waterpark in Sandusky OH for a cool $2 million if a court approved the deal. Kiritsinh “Kirit” Parmar, president of MKSP LLC of Clarksville MD was the winning bidder in an online auction for Maui Sands. Parmar deposited $210,000 toward the purchase and awaited a Nov 7th court hearing to seal the deal. Parmar owns and operates numerous Dunkin Donuts stores, 7-11, liquor stores, gas stations, Subway stores and shopping centers. Earlier, former Cleveland Browns running back, Jamal Lewis, tried to buy the hotel waterpark resort but failed to obtain financing and missed a deadline to buy it.
In November, the Argent Group paid $7.7 million for the former Sheraton Chicago Northwest & Coco Key Indoor Waterpark in Arlington Heights IL, which had closed suddenly in 2009. The indoor waterpark alone cost $25 million to build in 2006. What a deal! Argent partner Carl Groesbeck said the plan was to convert the tower hotel to apartments by 2013 and build two new limited service hotels totaling 300 rooms with underground parking and a connection to the indoor waterpark. Retail is also planned for the 25-acre property.
In November, Nick & Eva Laskaris, owners of Mt Olympus Water & Theme Park bought the Copa Cabana Resort Hotel & Suites in Wisconsin Dells WI. The property has an elevated walkway across Wisconsin Dells Parkway and provides an entry for other properties they own along the strip. Earlier in 2011, Mt Olympus owners Nick & Eva Laskaris bought and remodeled six hotels along with a campground for $22 million, an investment that makes them the second largest owner of hotel rooms in Wisconsin Dells WI. The six hotels include River Walk Hotel, American World Resort, Star Motel, Star Motor Inn, Luna Inn & Suites and Raintree Resort and total 832 rooms. In 2004, Laskaris had merged their Big Chief’s Mt Olympus Theme Park with two adjacent businesses owned by the Mattei family --- Treasurer Island Hotel Indoor Waterpark and Family Land Outdoor Waterpark. In 2007, Laskaris bought out Mattei and converted Treasure Island to the Hotel Rome and renamed nearby Pleasant View Motel to Mykonos Village. Acquisitions were financed through land contracts with Laskaris making payments to sellers over 12 years, as bank loans were not available.
Name Changes in 2011
In January, Grizzly Jack’s Grand Bear Resort in Utica IL filed for Chapter 11 bankruptcy. The lodge and indoor waterpark remained open as Joe Hook, the LLC’s managing partner, worked to restructure the debt. Grand Bear had contributed more than $1.3 million in taxes since it opened in 2005, but ran into money troubles due to the sad state of the economy.
In February, Great Wolf Resorts Inc tried to modify the loan backing its Kansas City KS waterpark, acknowledging that it might have to surrender the property along with its Traverse City MI resort, if it couldn’t rework the $67 million loan. Great Wolf was hoping to align the loan with underlying fair market value and cash flows of the two properties --- something every borrower wants but few achieve.
In March, Sol Kerzner, the man that built the Atlantis Waterpark Resorts in the Bahamas and Dubai, faced a loan covenant test that could trigger a default on an estimated US450 million loan. A default on operating company debt could have led to refinancing of Kerzner’s US$3 billion total debt, asset sales or ownership changes. Centerbridge Capital Partners LP and TPG Capital are among the largest holders of the debt. By September Kerzner had won an extension and a spokesman said the restructuring process was ongoing with its lenders. In October the Nassau Guardian reported that investment firm BMB Group, representing Malaysian investors, sent a letter to Sol Kerzner offering to pay US$3.4 billion to $4 billion for the company. By December, Kerzner International Holdings had transferred three resorts, including the 2,317-room Atlantis Bahamas, to Toronto-based Brookfield Asset Management as part of a debt-for-equity swap --- shifting Kerzner’s forward business strategy from ownership to that of a management company. Kerzner said he went private in 2006 when economies were brisk and occupancies were soaring. He could not foresee the Lehman Brothers collapse and the coming of the recession in late 2008. More trouble coming! In 2012, Kerzner will face a new rival six miles away on Cable Beach where the Baha Mar Resort is under construction with 200,000 sf of conference rooms, a big casino, a 20-acre waterpark and an 18-hole golf course on 1000 acres. Baha Mar is financed by the Export-Import Bank of China and is being built by China State Construction & Engineering.
In April, the Radisson Hotel & Waterpark in Albuquerque NM got a commitment from its lender and manager, Sorenson Group Management LLC of Utah, that allowed it to continue operating all its facilities, including a 37,000 sf indoor waterpark. The hotel and waterpark operated under the direction of Legacy Hospitality Group and its principals, George Mitchell and Larry Scott. Legacy is a Utah corporation that works with Sorenson. The hotel was placed into receivership and Sorenson is the note holder. Legacy oversaw the receivership while Sorenson pursued a sale. Sorenson Group Holdings has acquired the original loan from a failed bank.
Awards in 2011
Over the last 10 years, hotels with indoor waterparks have grown dramatically, from 33 in 2001 to 290 at the end of 2011. New openings numbered 9 and 10 in the first two years, then rose sharply to 38 and 40 during 2006 and 2007.
Hotels WITH indoor waterparks out-performed hotels WITHOUT indoor waterparks --- even during the tough times. Are hotel waterpark resorts recession-proof? No. but they are recession-resistant as many families spend their leisure time closer to home and spend less money. Even during one of the deepest and longest recessions (2008-2011) in US history, between 19 and 29 hotel waterparks have opened each year while the new additions to overall hotel industry have come to a halt. While the new construction pipeline holds 18 hotel waterparks currently compared to 67 at its height in 2007, the number of projects in development has reached nearly 300, awaiting financing.
Available rooms at hotel waterparks have grown 10X in 10 years --- from 6,475 to over 65,500 in 2011. Annual growth rates climbed to highs of 32.7% in 2005 and 31.8% in 2010.
Indoor waterpark square footage has grown from 1.6 million square feet in 2004 to more than 6.1 million in 2011. The annual additions of waterpark space a high of 954,300 square feet in 2007, then dwindled due to construction of many smaller indoor waterparks and the relative construction slow-down since 2008.
The average hotel with an indoor waterpark has about 200 rooms and a waterpark that ranges from 22,000 to 25,000 square feet. The average size hotel indoor waterpark appears low due to the fact that 40% of our database has indoor waterparks that are less than 10,000 sf in size. Another 46% has indoor waterparks of 10,000 sf to 50,000 sf, and only 14% or about 40 hotels have indoor waterparks of more than 50,000 sf. For the developer, it is best to analyze room to waterpark ratios in sub-groups. For example, a hotel with 200 guest rooms typically has a 40,000 sf indoor waterpark and that can range from a low of 20,000 sf to a high of 60,000 sf in size.
Meeting rooms at hotels with indoor waterparks grew from 376 in 2004 to 666 in 2011. Meeting square footage grew from 1.6 million sf in 2004 to more than 3.6 million in 2011. The average meeting space per hotel remained constant at about 13,800 sf.
Not all hotel indoor waterparks have meeting space, but those that do enjoy a higher occupancy and revenues due to the capturing of group business, which can fill low periods during the year. In the chart below, you can relate the amount the meeting space needed with the number of meeting rooms, waterpark space and number of guest rooms.
Today, 46% of hotel waterparks are affiliated with a national franchise brand and 54% are independent. The larger destination resorts tend to be independent while the smaller suburban and highway hotels tend to be affiliated with a hotel brand.
Canadian Supply of Hotel Waterparks
In Canada, we identified 130 hotel indoor waterparks that are open and operating in 2011. Eighty-four (84) are affiliated with a brand and 49 are independent. Most are located in the western provinces. World Waterpark at the West Edmonton Mall in Alberta is the largest indoor waterpark in the world with 217,800 square feet. The Mall is the largest shopping center in the world, according the Guinness Book of World Records. However, three newer, larger shopping malls in Beijing, Manila and Dubai are now claiming this title.
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 World Waterpark without going outside. So, the largest hotel in Canada associated with an indoor waterpark is the Fantasyland Hotel in West Edmonton.
Top 10 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.
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.
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.
Hotel Waterparks That Opened in 2011 in Canada
In June, World Waterpark at West Edmonton Mall AB added two extreme waterslides.
In August, the Rex Hotel & Spa in Vancouver BC opened a custom outdoor waterpark with computerized jet sprays, water balls and pooling water for lots of funs. Indoors the hotel offers many play areas and lounge areas with custom designed dog play equipment. The Rex Hotel & Spa is, you guessed it, an upscale inn for dogs. Located in a 10,000 sf converted warehouse, the rich dog kennel charges $60 a night or $8 more for a private suite. Upstairs, plush pillows and dog beds surround the flat screen TV and DVD players where the dogs settle in to watch a movie each night, according to owners Barrie and Karen Balshaw. Like any hotel, the Rex offers a mini-bar menu for owners who want their dog to have special treats. See for yourself. Click www.youtube.com/watch?v=KAaHpXWz9Yo.
Hotel Waterparks Under Construction/Planned in Canada
Construction of Lac Mirabel Shopping Mall in Montreal, Quebec has stopped due to lack of funding; original plans called for a hotel waterpark.
In April, the Calypso Waterpark at Limoges-Ottawa announced plans to construct retail, a campground and a hotel, but ground has not yet broken.
Twenty-seven (27) hotel indoor waterparks are currently under development. Winnipeg is trying to attract a private developer to build a hotel with indoor waterpark.
Mexico & Caribbean Hotel Waterparks
Seventeen (17) hotel waterpark resorts are opening and operating in Mexico and the Caribbean. A few are indoor-outdoor combinations with onsite, adjacent or nearby lodging that would tend to classify them as hotel waterpark resorts.
In April 2011, El Sueno Waterpark in Tezontepec de Aldama, Hidalgo, reportedly opened its proposed hotel and wave pool, but we cannot yet confirm it. The Hidalgo secretary of tourism has grouped the state’s attractions into corridors such as the mountain corridor and the waterpark corridor. The Corridor de los Balnearios (Water Park Corridor) list most of the major water parks, spas, natural pools and thermal springs in the state. Hidalgo ranks second in Mexico for the number of thermal springs.
The Baha Mar Resort & Eco Waterpark in Nassau, Bahamas is under construction with 3500 rooms scheduled to open in late 2014. Also, there’s Harmony Cove Hotel Spa Residences & Waterpark in Trelawny on the north coast of Jamaica with 2,000 rooms.
That’s what happened in North America during 2011. If we missed something, please let us know.
Stay positive, work smart and do the right thing!
Jeff Coy, ISHC, is president of JLC Hospitality Consulting based in Phoenix-Cave Creek AZ. He is certified by the International Society of Hospitality Consultants. Amanda McDaniel is director of research. For more about market research, economic feasibility and design-development services for all kinds of resorts, waterparks, adventure parks and sports facilities, call 480-488-3382 or email email@example.com or go to www.jeffcoy.com.
HOTEL WATERPARK RESORT
Hotel Waterpark Construction Report; 40 Hotel Waterpark Resorts Open in
2011 Outside North America / Jeff Coy & Amanda McDaniel /
Construction Report North America: 23 Hotel Waterparks Expect to Open
in 2011; 10 Coco Key Waterparks Bought at Auction for Bargain Prices
/ Jeff Coy & Amanda McDaniel / July 2011
Hotel Waterpark Resorts Open in USA in 2010; Twenty-Five More Launch
Outside North America / Jeff Coy / June 2011
Hotel Waterpark Resorts Are Under Construction, Opening in 2010 Outside
North America / Jeff Coy and Amanda McDaniel / July 2010
|Cruise Ships Add Waterslides & Aqua ParksFloating Hotel Waterpark Resorts Race to Compete for Families / Jeff Coy / July 2010|
|24 Ziplines Open in USA in 2010; A New, Less Expensive Way to Add the WOW Factor to Resorts, Parks / Jeff Coy & Amanda McDaniel / May 2010|
|Waterpark Construction Report: North America;Eight Hotel Waterparks Coming in 2010 / Jeff Coy and Amanda McDaniel / April 2010|