News for the Hospitality Executive
Hotel Waterpark Resort Growth
Projects Get Bigger
Consultants Present 2008 Industry Report at Workshop Feb 28
February 22, 2008 --- During 2007, thirty-three (33) new hotel indoor waterparks opened. Eighty-three (83) hotel waterparks are under construction now or will break ground during 2008 --- including fifty-five (55) projects scheduled to open in 2008 and another twenty-three (23) that are slated to open in 2009-2010.
Highlights of the 2008 Industry Report include:
Hotels and resorts with indoor waterparks are a small but rapidly-growing segment of the lodging, recreation and entertainment business. Nationally, waterpark hotel rooms grew 20.9% in 2007 compared to ordinary hotel rooms at 1.4% growth. The following chart illustrates the growth over the last six years.
Nationally, these 169 properties
total of 28,888
rooms, over 4.1 million square feet of indoor waterpark space and 511
rooms covering 1.6 million square feet of meeting space.
Today, about 48% of hotel waterparks are
affiliated with a national franchise brand and 52% are independent. Hotel waterparks are popular with families
and hotel owners
because they fill empty rooms at higher room rates than hotels without
waterparks. Every year the construction pipeline
bigger. And hotel waterpark projects keep
bigger in size. Many are part of
mixed-use resort destination developments that include conference
recreation, entertainment, retail shopping, offices and residential
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
days a year, rain or shine. The first
indoor waterpark in the
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. Yet a hotel waterpark resort is still just a hotel with a very expensive attraction, similar to having a golf course or conference center. The indoor waterpark is a perfect component for the hotel owner that wants a balanced mix of customers --- individual business travelers, groups and individual leisure guests.
USA Hotel Industry Performance
Nationwide, hotel room rates reached an average of $103.64 in 2007, up from $97.89 in 2006, a low of $83.19 in 2002 and up from $86.04 in benchmark Year 2000.
In 2007, airport, urban and resort hotels ran the highest occupancies. Occupancy growth slowed for all hotels while resort occupancy declined one-half of one percent in 2007. Urban hotels and resorts recorded the highest average room rates at $148 and $143 respectively. Room rate growth remained strong for all hotels, with urban hotels achieving the biggest gains.
Hotel occupancy was down 0.2% during the first half of 2007 compared to the first half of 2006. Summer 2007 occupancy was up 1.0% higher than Summer 2006. However, occupancy started to dwindle during the last three months of 2007 amidst news of a slowing economy.
While hotel occupancy softened, hotel average room rates remained strong throughout the year --- up 5.9% in 2007 over 2006. As a result, revenues per available room were up 5.5% during the first half of 2007, up 6.6% during Summer 2007 and up 5.7% for the Year 2007.
Most families in the
USA Hotel Waterpark Resort Performance
On January 1, 2007, there were 136 hotels in
During 2007, thirty-three (33) new additions
the total to 169 hotel waterpark resorts open and operating in the
Another fifty-five (55) projects are under
construction now or
will break ground during 2008 which are scheduled to open in 2008. Realistically, some projects may slide into
About 166 hotel waterpark projects were in the development pipeline at the end of 2007 compared to 108 in 2006, 121 in 2005, 69 in 2004, 46 in 2003 and 19 in 2002. In 2008, more than 200 projects are in the planning stages.
Hotel Construction Will Increase in 2008
More than 211,000 hotel rooms were in the pipeline as of December 2007, a 35.5% increase from 156,000 rooms in the pipeline a year earlier, according to Smith Travel Research. Hotels that received funding during the easy money period of 2007 will be under construction during 2008 and 2009.
The 2008 Lodging Industry Construction Pipeline stood at 718,000 hotel rooms at the end of 2007 --- up 36% over the previous year. Hotel rooms were growing at a rate 2.2%. The new hotel room supply growth is forecast at 2.8% for 2008 and 3.4% for 2009 taking into account anticipated market conditions, according to Lodging Economics.
From Easy Money to the New Reality
During the first half of 2007, investors were hungry for hotels. It was a period of easy money. In the second half of 2007, there were signs of a slowing economy --- due to higher fuel costs, higher construction costs, a residential mortgage crisis and negative news that started to affect hotel lending. Almost overnight, the period of easy money ended.
In 2008, there’s still lots of capital, but
it’s back to
reality in terms of tougher underwriting standards.
Hotel industry occupancy in the
The full report, Hotel
Waterpark Resort Industry Report 2008, available Feb 28, provides
regarding the following items:
USA Resort Performance
USA Hotel Waterpark Resort Performance
Wisconsin Dells Hotel Performance
USA Competitive Supply of Hotel Waterpark Resorts
List of Hotel Waterparks That Opened in 2007
Major Transactions of 2007
Top 25 Largest Hotel Waterpark Resorts in the USA
Top 15 Largest Meeting Facilities with Indoor Waterparks in the USA
Emerging Multi-Unit Owners
Emerging Management Companies
Independent Vs Branding
List of Hotel Waterparks Scheduled to Open in 2008 For info on the workshop, go to www.hotelwaterparkworkshop.com. For information on the Hotel Waterpark Resort Industry Report 2008, contact co-authors
|Also See:||Hotel Waterparks Construction Report 2008; 33 Hotel Waterparks Opened in 2007, 55 Scheduled for 2008 / February 2008|
|Hotel Waterpark Resort Industry Report 2007; 48 Hotel Waterparks Opening, 97 Under Construction / Jeff Coy and Bill Haralson / July 2007|