July 2, 2007 --- Stan Anderson, owner of the Polynesian Resort in Wisconsin Dells and pioneer of the hotel indoor waterpark industry in the USA.During 2007, forty-eight (48) new hotel indoor waterparks are expected to open, including new additions and expansion projects that are scheduled to open in the second half of 2007. Ninety-seven (97) hotel waterpark projects are under construction now or will break ground later in 2007.
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. The first hotel indoor waterpark in the USA was accidentally created in 1994 by Stan Anderson, owner of the Polynesian Resort in Wisconsin Dells WI, a businessman who was trying to fill his hotel rooms on weekends. He installed some water gizmo in his indoor pool, and weekend occupancy skyrocketed. From this, Wisconsin Dells has spawned 21 waterpark resorts and has become the waterpark capital of the world.
Hotel waterparks are a small but fast-growing sector of the resort industry which is expected to total one hundred and eighty-four (184) by year end. Hotel waterparks merge lodging, recreation and entertainment into one package. They are a big hit with families and hotel owners nationwide because they fill empty rooms at higher room rates.
The following chart illustrates the growth over the last six years.
| 2007F Amount |
2006 Amount |
2005 Amount | 2004 Amount |
2003 Amount |
2002 Amount |
|
|---|---|---|---|---|---|---|
| Hotel Indoor Waterparks | 184 | 136 | 104 | 81 | 65 | 50 |
| Rooms | 31,414 | 23,899 | 18,998 | 13,877 | 11,464 | 8,510 |
| Indoor Waterpark Sq Ft | 4,461,469 | 3,225,669 | 2,344,469 | 1,721,269 | 1,385,969 | 1,019,104 |
| Meeting Rooms | 614 | 479 | 422 | 373 | 352 | 322 |
| Meeting Space Sq Ft | 1,699,634 | 1,326,435 | 978,935 | 806,085 | 679,435 | 626,955 |
| Affiliated with a Brand | 85 | 67 | 52 | 37 | 27 | 20 |
| Independent | 99 | 70 | 52 | 44 | 38 | 30 |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting. | ||||||
Nationally, these 184 properties have a total of 28,729 rooms, nearly 4.0 million square feet of indoor waterpark space and 614 meeting rooms covering nearly 1.7 million square feet of meeting space. In 2007, about 46% of hotel waterparks are affiliated with a national franchise brand, up from 40% in 2002.
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 ($400 psf) 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.
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The USA hotel industry occupancy is expected to reach 63.1% for 2007, just slightly under the 63.4% recorded for 2006 --- up from a low of 59.0% in 2002 and almost even with benchmark Year 2000.
| USA HOTEL INDUSTRY TRENDS | ||||||
|---|---|---|---|---|---|---|
| 2007F | 2006 | 2005 | 2004 | 2003 | ||
| Occupancy | 63.1% | 63.4% | 63.1% | 61.3% | 59.1% | |
| Average Room Rate | $102.97 | $97.31 | $90.95 | $86.24 | $83.19 | |
| Source: Smith Travel Research. 2007 Forecast by JLC Hospitality Consulting | ||||||
Nationwide, hotel room rates will reach an average of $102.97 in 2007, up from $97.31 in 2006, a low of $83.19 in 2002/2003 and up from $86.04 in benchmark Year 2000.
In 2006, airport, urban and resort hotels ran the highest occupancies. Interstate hotels showed the biggest improvement in occupancy over the previous year. Of course, resort hotel locations showed the highest average room rates at $135.42, which reflects all of the amenities of a resort, compared to other types of lodging.
| TOP PRODUCING HOTELS BY LOCATION | ||||
|---|---|---|---|---|
| Occupancy | Average Room Rate | |||
| Percent | % Chg | Amount | % Chg | |
| Urban | 68.4 | 0.5 | $125.18 | 9.2 |
| Suburban | 64.0 | 0.2 | $84.99 | 7.5 |
| Airport | 69.3 | 0.7 | $93.54 | 9.2 |
| Interstate | 57.8 | 1.6 | $63.23 | 5.1 |
| Resort | 66.6 | 0.0 | $135.42 | 6.8 |
| Small Town | 57.0 | 0.8 | $74.37 | 4.4 |
| Source: Smith Travel Research, Year 2006. | ||||
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For the first five months of 2007, hotel industry occupancy reached 61.6%, only 3/10th of one percent behind the same period last year. Hotel room rates averaged $102.86 compared to $97.21, up $5 over the same period last year.
Through May, upscale, upper scale and luxury chain hotels achieved higher occupancies than midpriced and economy properties. The Mountain Region produced the highest occupancy, probably due to the great winter ski season in the Rockies. Nationally, the highest priced hotels achieved the highest occupancies. Regarding location, airport hotels ran the highest occupancy at 70% followed by urban hotels at 67.3% and resort locations at 66.7%.
Hotel room supply, demand, room rates and revpar (revenues per available room) all showed positive growth for the last 12 months and through May 2007. Hotel occupancy showed a slight downward shift for the last 12 months but showed positive for May 2007 as we head into summer.
| USA HOTEL INDUSTRY TRENDS | ||||
|---|---|---|---|---|
| May 2007 |
Last 3 Months |
Last 12 Months |
Year to Date |
|
| Supply | Up 1.4% | Up 1.3% | Up 0.8% | Up 1.2% |
| Demand | Up 2.1% | Up 1.2% | Up 0.1% | Up 0.6% |
| Occupancy | Up 0.7% | Down 0.1% | Down 0.7% | Down 0.6% |
| Average Room Rate | Up 5.5% | Up 5.5% | Up 6.7% | Up 5.8% |
| Rev Per Available Room | Up 6.3% | Up 5.4% | Up 5.9% | Up 5.2% |
| Source: Smith Travel Research, May 2007. | ||||
In the summer of 2007, the USA hotel industry will achieve a new record number of occupied rooms per night of 3.14 million, according to a report by PriceWaterhouseCoopers in June. The summer occupancy in 2007 is forecast to be slightly lower than 2006, 69.6%, the second-highest since the peak of 72.1% in 2001 and about one percentage point below the 70.2% occupancy in 2006.
Occupancy for the five-day weekend of the Fourth of July, which falls on a Wednesday this year, is expected to be spread among the before and after weekends at 69.2%. Labor Day weekend is expected to reach 70.1%.
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The USA travel industry is expected to have a good summer travel season in 2007, with leisure travel increasing 1.4% over last summer, according to the Travel Industry Association. Americans will take 330 million person-trips in June, July and August, a record high number. Americans are expecting higher gas prices this summer but seem to be taking it in stride. Gas prices of around $3.00 will cause 11% of Americans to modify their summer travel plans, according to a TIA-AAA survey. The real tipping point seems to be $3.50 a gallon gas, with nearly one-third of travelers saying they would cancel their trip.
According to PWC, higher gas prices will result in 8,000 fewer occupied rooms per night between Memorial Day and Labor Day.
There is also emerging price resistance to increases in hotel average room rates. USA hotel average room rate (ADR) increases will decelerate through the remainder of 2007, as new construction accelerates and demand lessens. Nevertheless, analysts predict that hotel room rates will increase in 2007 by the second-highest percent in 10 years.
Most families in the USA will bite the bullet on higher gasoline prices and refuse to abandon their vacation plans.
Many will vacation closer to home, eat fewer meals in restaurants and escape for weekends at nearby regional resorts --- a growing number of which now offer indoor waterparks and family entertainment centers.
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Currently, the most lucrative states for hotel investment are Hawaii, New York and Massachusetts where hotel revenues are the highest in the nation. Alaska, Illinois, Arizona and Massachusetts had the biggest gains in revenues per available room.
Hotel revenue per available room (RevPAR) is the key indicator that takes into account supply, demand, occupancy, scarcity and pricing.
| HIGHEST REVENUE-PRODUCING HOTELS BY STATE | |||
|---|---|---|---|
| 2006RevPARAmount $ | 2005RevPARAmount $ | % Chg | |
| Hawaii | 147.41 | 134.69 | 9.4 |
| New York | 122.28 | 111.40 | 9.8 |
| Massachusetts | 80.98 | 73.65 | 10.0 |
| California | 77.31 | 70.75 | 9.3 |
| Florida | 72.13 | 69.49 | 3.8 |
| Alaska | 71.45 | 61.57 | 16.0 |
| Nevada | 75.11 | 72.86 | 3.1 |
| Rhode Island | 75.52 | 74.75 | 1.0 |
| Maryland | 69.95 | 67.01 | 4.4 |
| New Jersey | 68.20 | 64.13 | 6.4 |
| Arizona | 65.74 | 59.47 | 10.6 |
| Illinois | 67.70 | 58.81 | 15.1 |
| USA Average | 61.69 | 57.39 | 7.5 |
| Source: Smith Travel Research, Year 2006. | |||
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.
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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 Francisco.
The biggest gains were made by Chicago, San Francisco, Boston and Los Angeles, which recorded double-digit hotel revenue growth.
| HIGHEST REVENUE-PRODUCING HOTELS BY MARKET | |||
|---|---|---|---|
| 2006RevparAmount $ | 2005RevparAmount $ | % Chg | |
| New York City | 198.85 | 176.21 | 12.8 |
| Oahu | 129.42 | 118.66 | 9.1 |
| Miami | 100.71 | 93.14 | 8.1 |
| San Francisco | 100.57 | 89.91 | 11.9 |
| Washington DC | 96.42 | 93.79 | 2.8 |
| San Diego | 95.88 | 88.14 | 8.8 |
| Boston | 94.81 | 84.73 | 11.9 |
| Los Angeles | 85.50 | 77.51 | 10.3 |
| Chicago | 82.46 | 70.15 | 17.6 |
| Top 25 Market Average | 81.82 | 74.76 | 9.4 |
| Anaheim-Santa Ana | 81.50 | 76.09 | 7.1 |
| USA Average | 61.69 | 57.39 | 7.5 |
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Hawaii is the leading resort destination with 79.8% occupancy (down 1.6% from last year) and $184 average room rate (up 11.2% over last year). This compares to occupancy of 66.6% and average room rate of $135 for all resorts in the USA.
| HOT & COLD RESORT DESTINATIONS | ||||
|---|---|---|---|---|
| 2006 Occupancy |
% Change |
2006 ADR |
% Change |
|
| Hawaii | 79.8 | -1.6 | 184.81 | 11.2 |
| Nevada | 71.9 | 1.2 | 104.42 | 1.9 |
| Florida | 65.8 | -4.6 | 109.59 | 8.8 |
| California | 69.5 | 0.8 | 111.21 | 8.4 |
| Arizona | 67.0 | 1.9 | 98.11 | 8.5 |
| USA Resorts | 66.6 | 0.0 | 135.42 | 6.8 |
| Colorado | 61.0 | 3.7 | 97.19 | 6.0 |
| Minnesota | 60.3 | -0.2 | 84.19 | 6.2 |
| Wisconsin | 54.9 | 1.6 | 76.07 | 5.0 |
| Source: Smith Travel Research. Year 2006 | ||||
Nevada, Florida, California and Arizona trail closely behind with occupancies of 71.9%, 65.8%, 69.5% and 67.0%, respectively. Colorado recorded the biggest gain in occupancy at 3.7% while Hawaii recorded the biggest decline in occupancy versus last year.
The highest resort room prices were found in Hawaii at $184, California at $111, Florida at $109 and Nevada at $104. Hawaii recorded a price jump of more than 11% in 2006 compared to last year. Colorado, Minnesota and Wisconsin achieved statewide occupancy under the national average for all USA Resorts in both occupancy and average room rates. However, trends are shifting. Wisconsin and Minnesota have the highest number of hotel indoor waterpark resorts in the country, and a growing number of ski resorts are considering indoor waterpark projects to achieve year round revenues. Many of the top hotel waterpark resort properties record occupancies and room rates far above the national averages and equal to many of the Sunbelt resort destination states.
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On January 1, 2007, there were 136 hotels in the USA with indoor waterparks --- from the smallest water features to the largest waterpark resorts.
During 2007, forty-eight (48) new additions and expansion projects are expected to open by year end, bringing the total to 184 hotel waterpark resorts open and operating in the USA.
Another forty-nine (49) projects are under construction now or will break ground during 2007 which are scheduled to open in 2008 and beyond.
| Construction Project Growth Hotel Waterpark Resorts USA | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| /td> | 2008 F | 2007F | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 |
| Open at beginning of year | 184 | 136 | 104 | 81 | 65 | 50 | 41 | 32 | 18 |
| Openings during year | 49 | 48 | 32 | 23 | 16 | 15 | 9 | 9 | 14 |
| Total Open at end of year | 233 | 184 | 136 | 104 | 81 | 65 | 50 | 41 | 32 |
| Percent Change | 26.6% | 35.3% | 30.8% | 28.4% | 24.6% | 30.0% | 22.0% | 28.1% | |
| Under Construction | 97 | 73 | 52 | 32 | 9 | 10 | 9 | 8 | |
| In Development | 166 | 108 | 121 | 69 | 46 | 19 | |||
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting. | |||||||||
Clearly, hotel waterpark resorts are not a fad but here to stay. About 166 projects are in the development pipeline compared to 108 in 2006, 121 in 2005, 69 in 2004, 46 in 2003 and 19 in 2002. The waterpark sector of the resort industry has experienced annual growth of more than 30% over the last several years.
But it is difficult to know how well hotel waterpark resorts perform financially as a group. Many of the larger independent properties do not report statistics to Smith Travel Research. Even the Wisconsin Dells Convention & Visitors Bureau collects little in the way of way of hotel waterpark resort performance data. The hotel owners keep their operating data fairly close to the vest. Great Wolf Resorts Inc is a public company and their operating data is available for all to see online in various SEC filings. Yet, two years ago, Great Wolf Resorts stopped reporting individual property data in favor of reporting same store comparisons, which effectively makes it more difficult for shareholders and other observers to determine how well individual hotels are performing. Regardless, Great Wolf Resorts performance is not necessarily the industry benchmark because they are being out-performed in several markets --- although they lead the industry in terms of multiple locations.
As a result, the best operating performance data is in proprietary databases of a few consultants, appraisers and emerging management companies with multiple locations. In 2001 Hotel Waterpark Resort Research & Consulting was formed for the purpose of collecting, analyzing and publishing data regarding this growing segment of the resort industry. HWRRC is a collaborative effort of Jeff Coy of JLC Hospitality Consulting of Cave Creek AZ and Bill Haralson of William L. Haralson & Associates of Alto NM. Together the two consultants produce an Annual Industry Report, a Construction Report and several developer workshops, where they present their latest research and a variety of expert speakers.
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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 2007, 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.
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One hundred and eighty-four (184) hotel indoor waterparks are open and operating in the USA, including projects scheduled to open in the final months of 2007. Here is a list of hotel waterpark resorts that opened in the following states since 2001:
| HOTEL WATERPARK RESORTS OPEN | ||||||
|---|---|---|---|---|---|---|
| 2007F | 2006 | 2005 | 2004 | 2003 | 2002 | State |
60 |
49 |
35 |
32 |
28 |
25 |
Wisconsin |
22 |
21 |
20 |
15 |
14 |
10 |
Minnesota |
10 |
8 |
7 |
5 |
3 |
2 |
Michigan |
15 |
8 |
4 |
2 |
1 |
1 |
Ohio |
8 |
7 |
4 |
4 |
3 |
3 |
South Dakota |
7 |
3 |
0 |
0 |
0 |
0 |
Texas |
7 |
4 |
3 |
2 |
1 |
1 |
Iowa |
7 |
4 |
2 |
1 |
0 |
0 |
Washington |
6 |
5 |
4 |
3 |
2 |
2 |
North Dakota |
4 |
3 |
3 |
2 |
2 |
0 |
Pennsylvania |
4 |
3 |
1 |
0 |
0 |
0 |
Illinois |
4 |
2 |
1 |
1 |
1 |
1 |
Nebraska |
3 |
2 |
2 |
1 |
0 |
0 |
Indiana |
3 |
3 |
2 |
0 |
0 |
0 |
Virginia |
3 |
2 |
2 |
2 |
2 |
1 |
Massachusetts |
3 |
2 |
2 |
2 |
1 |
0 |
Kansas |
2 |
2 |
2 |
2 |
2 |
1 |
Montana |
2 |
2 |
2 |
2 |
2 |
1 |
Missouri |
2 |
1 |
0 |
0 |
0 |
0 |
New York |
12 |
5 |
8 |
5 |
3 |
2 |
Others |
184 |
136 |
104 |
81 |
65 |
50 |
Total |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting | ||||||
Here is a list of the hotel waterpark resorts added to the supply in 2006:
| HOTEL WATERPARK RESORTS OPENED IN 2006 | |||||
|---|---|---|---|---|---|
| Name | Location | Rooms | Indoor Waterpark Sq Ft | Opened | |
| Best Western Edgewater IWP Addition | Duluth | MN | 282 | 30,000 | 200601 |
| Holiday Inn | Kearney | NE | 163 | 6,000 | 200601 |
| Great Escapes Hotel & Waterpark | Lake George | NY | 200 | 38,000 | 200602 |
| AmericInn | Appleton | WI | 62 | 200602 | |
| Lake Lawn Resort Condo Expansion P1 | Delavan | WI | 222 | 200603 | |
| Great Wolf Lodge Add Condos & IWP | Wisconsin Dells | WI | 128 | 38,000 | 200604 |
| Holiday Inn Holidome Convert to IWP | Elmhurst | IL | 214 | 25,000 | 200604 |
| Ramada Condo Hotel & Big Splash | Auburn | WA | 150 | 7,000 | 200604 |
| Grand Lodge & Waterpark of America | Bloomington | MN | 403 | 70,000 | 200605 |
| Holiday Inn East Add Rooms & IWP | Columbus | OH | 338 | 60,000 | 200605 |
| Mt Olympus I-OWP Add Rooms | Wisconsin Dells | WI | 56 | 200605 | |
| Schlitterbahn Resort & Waterpark | Galveston | TX | 0 | 70,000 | 200606 |
| Wilderness Convert O-Wave Pool to IWP | Wisconsin Dells | WI | 0 | 68,000 | 200606 |
| Ramada Casino Resort & IWP | Anacortes | WA | 135 | 14,000 | 200606 |
| Wilderness Glacier Canyon Condo Lodge | Wisconsin Dells | WI | 224 | 200606 | |
| Kalahari Resort Add Convention Center | Sandusky | OH | 0 | 200606 | |
| Comfort Suites Thumper Pond Add IWP | Ottertail | MN | 78 | 12,000 | 200607 |
| Chula Vista P1 Addition to IWP | Wisconsin Dells | WI | 0 | 80,000 | 200608 |
| LaQuinta/Fairfield WaTiki Indoor WP | Rapid City | SD | 255 | 30,000 | 200608 |
| Deer Valley Lodge & IWP | Barneveld | WI | 62 | 12,000 | 200608 |
| Chula Vista P1 Addition to Condos | Wisconsin Dells | WI | 166 | 200608 | |
| Chula Vista P1 Addition to Conference Ctr | Wisconsin Dells | WI | 0 | 200608 | |
| Ramada DFW North Big Splash Renovation | Irving | TX | 150 | 200609 | |
| Great Wolf Lodge Add Rooms & IWP SqFt | Williamsburg | VA | 100 | 200610 | |
| Jellystone Expand OWP, Add 3Bears HIWP | Warrens-Tomah | WI | 120 | 48,000 | 200611 |
| Great Wolf Lodge at Kings Island | Cincinnati-Mason | OH | 401 | 78,000 | 200612 |
| Sheraton Chicago Northwest Add IWP | Arlington Heights | IL | 426 | 65,000 | 200612 |
| Double JJ Ranch & Gold Rush IWP | Rothbury | MI | 235 | 60,000 | 200612 |
| Cherry Valley Lodge Add IWP | Newark | OH | 200 | 45,000 | 200612 |
| Arrowwood Condo Resort & IWP | Lake Okoboji | IA | 100 | 18,000 | 200612 |
| Lakeview Resort Add Rooms CC & IOWP | Canyon Lake | TX | 31 | 7,200 | 200612 |
| Kalahari Resort Golf Course Addition | Wisconsin Dells | WI | 0 | 200612 | |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting, December 2006. | |||||
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Hotels with the largest indoor waterparks are concentrated in Wisconsin Dells WI but the trend is moving nationwide.
| TOP 25 LARGEST HOTEL WATERPARK RESORTS IN USA | |||||
| Name | Location | Rooms | IndoorWaterparkSq Ft | Opened | |
| Wilderness Hotel & Golf Resort* | Wisconsin Dells | WI | 817 | 229,000 | 199501 |
| Kalahari Resort | Wisconsin Dells | WI | 738 | 125,000 | 200001 |
| Chula Vista With Phase 1 Additions | Wisconsin Dells | WI | 466 | 110,000 | 200608 |
| Scotts Hotels & Splash Lagoon IWP | Erie | PA | 270 | 102,000 | 200304 |
| Kalahari Resort Sandusky | Sandusky | OH | 596 | 80,000 | 200505 |
| Great Wolf Lodge at Kings Island | Cincinnati-Mason | OH | 401 | 78,000 | 200612 |
| Great Wolf Lodge | Pocono Mountains | PA | 401 | 78,000 | 200510 |
| Grand Lodge & Waterpark of America | Bloomington | MN | 403 | 70,000 | 200605 |
| Schlitterbahn Resort & Waterpark | Galveston | TX | 0** | 70,000 | 200606 |
| Wilderness Covered Wave Pool | Wisconsin Dells | WI | 0 | 68,000 | 200606 |
| Sheraton Chicago NW & CoCo Key | Arlington Heights | IL | 426 | 65,000 | 200612 |
| Mt Olympus Treasure Island | Wisconsin, Dells | WI | 302 | 65,000 | 199901 |
| Great Wolf Lodge | Williamsburg | VA | 301 | 64,000 | 200503 |
| Double JJ Ranch & Gold Rush | Rothbury | MI | 235 | 60,000 | 200612 |
| Holiday Inn East & Fort Rapids | Columbus | OH | 338 | 60,000 | 200605 |
| Mountain Grand & Avalanche Bay | Boyne Falls | MI | 200 | 58,000 | 200505 |
| H2Oasis Indoor Waterpark | Anchorage | AK | 0*** | 56,000 | 200302 |
| Lodge at Cedar Creek Resort | Wausau | WI | 140 | 50,000 | 200406 |
| Jellystone Park & 3 Bears Hotel | Warrens-Tomah | WI | 120 | 48,000 | 200611 |
| Grand Rios Waterpark Resort | Brooklyn Park | MN | 224 | 46,000 | 200409 |
| Cherry Valley Lodge | Newark | OH | 200 | 45,000 | 200612 |
| Great Wolf Lodge | Wisconsin Dells | WI | 309 | 44,000 | 199701 |
| Massanutten Resort | McGaheysville | VA | 1400 | 42,000 | 200507 |
| 7 Clans Casino Hotel | Thief River Falls | MN | 151 | 40,000 | 200105 |
| Blue Harbor Resort | Sheboygan | WI | 183 | 40,000 | 200406 |
| Country Springs Hotel & Waterpark | Waukesha | WI | 187 | 40,000 | 200505 |
Notes: * Wilderness includes covered wave pool and 224 condos at Glacier Bay. |
|||||
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Among the Top 5 largest resorts by room count, the average number of hotel rooms is 896 with an indoor waterpark of 99,200 sf or 110 sf per guest room. Among the Top 5, this sizing ratio varies from 30 sf per guest room for the Massanutten Resort to 280 sf per guest room for the Wilderness Resort. The Top 5 resorts have an average of 7.2 waterslides, 2.0 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 75,766 sf of meeting space and 42 meeting rooms. The Top 5 hotel waterpark resorts in 2007 have more rooms, bigger waterparks, more water features and more meeting space than the Top 5 resorts in 2006. Several of the Top 5 have condos pre-sold to individuals that are part of the hotel rental pool.
| PROFILE OF LARGEST HOTEL WATERPARKS BY ROOMS | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Avg # Rooms |
Avg SqFt Indoor WP |
Avg # Slides |
Avg # Pools |
Avg # Htubs |
Lazy River |
Wave Pool |
Water Coaster |
Meeting SqFt |
# Mtg Rms |
|
| Top 5 | 896 | 99,200 | 7.2 | 2.0 | 1.8 | 1.2 | 0.8 | 0.4 | 75,766 | 42 |
| Top 6-15 | 376 | 58,500 | 6.7 | 4.1 | 1.8 | 0.8 | 0.5 | 0.2 | 15312 | 6 |
| Top 16-25 | 277 | 41,220 | 5.6 | 3.1 | 1.6 | 0.8 | 0.2 | 0.0 | 3843 | 3 |
| Top 26-50 | 207 | 28,424 | 3.4 | 2.5 | 1.5 | 0.5 | 0.2 | 0.1 | 30286 | 11 |
| Top 51-100 | 122 | 16,335 | 2.5 | 2.0 | 1.2 | 0.3 | 0.0 | 0.0 | 6,084 | 4 |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting. December 2006. | ||||||||||
Among the next ten largest (Top 6-15) hotel waterpark resorts, the average number of rooms is 360 with an indoor waterpark of 54,000 sf or 150 sf per guest room.
Among the top resorts ranked 16-25 by room count, the average number of rooms is 274 with an indoor waterpark of 37,179 sf or 135 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 half of the smaller resorts have them.
About 70% 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 50 Largest Hotel Waterpark Resorts are clearly in the meetings & convention business to balance their seasonal and weekend-weekday mix of business.
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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.
For example, hotels with indoor waterparks more than 70,000 square feet average 453 rooms and 105,250 square feet of indoor waterpark --- a ratio of 231 sf of waterpark per guest room. That ratio decelerates as waterparks get smaller.
| PROFILE OF LARGEST HOTEL WATERPARKS BY SIZE OF WATERPARK | ||||
|---|---|---|---|---|
| Hotels With An Indoor Waterpark |
Avg # Of Rooms |
Avg Indoor Waterpark SqFt |
Indoor Waterpark Sq Ft Per Room |
Rooms Per 1000 Sq Ft Of Indoor Waterpark |
| Over 70,000 sf | 453 | 105,250 | 231 | 4.9 |
| 50,000 to 69,999 | 194 | 61,600 | 221 | 3.2 |
| 40,000 to 49,999 | 346 | 43,125 | 179 | 9.7 |
| 30,000 to 39,999 | 225 | 32,893 | 143 | 7.5 |
| 20,000 to 29,999 | 227 | 21,916 | 156 | 7.9 |
| 10,000 to 19,999 | 106 | 12,537 | 107 | 9.4 |
| Under 5,000 | 106 | 2,769 | 36 | 36.6 |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting, December 2006. | ||||
To illustrate, hotels with waterparks 40,000 to 49,999 sf average 346 rooms and 43,125 sf of indoor waterpark --- a ratio of 179 sf per guest room. Notice that hotels with about 100 rooms vary widely in the sizes of their indoor waterparks. Hotel owners and developers can use the chart above to help size their projects.
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Among the Top 15 Hotel Meeting Facilities with an indoor waterpark, the number of rooms varies from 100 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.
| TOP 15 HOTEL MEETING FACILITIES WITH INDOOR WATERPARKS | |||||
|---|---|---|---|---|---|
| Name | Location | Rooms | Indoor Waterpark Sq Ft | Meeting Sq Ft | |
| Kalahari Resort & Convention Center | Wisconsin Dells | WI | 738 | 125,000 | 125,000 |
| Grand Harbor Resort & Waterpark | Dubuque | IA | 194 | 25,000 | 120,000 |
| Kalahari Resort & Convention Center | Sandusky | OH | 596 | 80,000 | 95,000 |
| Chula Vista Resort | Wisconsin Dells | WI | 300 | 30,000 | 70,000 |
| BW Ramkota Hotel & Conference | Sioux Falls | SD | 226 | 3,000 | 60,000 |
| Double JJ Ranch & Gold Rush IWP | Rothbury | MI | 235 | 60,000 | 50,000 |
| Timber Ridge Lodge | Lake Geneva | WI | 225 | 30,000 | 50,000 |
| Grand Prairie Hotel & KS Splashdown | Hutchinson | KS | 218 | 30,000 | 50,000 |
| Great Wolf Lodge at Kings Island | Cincinnati-Mason | OH | 401 | 78,000 | 40,000 |
| Lake Lawn Resort Condo Expansion | Delavan | WI | 222 | 31,000 | |
| Hilton Center City (730) | Milwaukee | WI | 250 | 20,000 | 30,000 |
| Arrowood Resort & Conference Ctr | Alexandria | MN | 200 | 38,000 | 28,000 |
| Arrowood Condo Resort & IWP | Lake Okoboji | IA | 100 | 18,000 | 28,000 |
| Ramada Plaza | Fargo | ND | 185 | 10,000 | 25,000 |
| Wilderness Glacier Canyon | Wisconsin Dells | WI | 224 | 25,000 | |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting, December 2006. | |||||
The Kalahari Resort & Convention Center in Sandusky OH has 95,000 sf of meeting space with an 80,000 sf indoor waterpark with another 93,000 sf of indoor waterpark space under construction for opening in late 2007.
These 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.
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Of 184 hotel waterparks forecast to be open by end of 2007, 85 are affiliated with a national hotel brand while 99 are independent.
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. Properties in resort locations tend to be independent while properties in urban, suburban and highway locations tend to be franchised.
We counted the Great Wolf Resorts as branded properties starting in 2005 as they are considered an emerging brand in the hotel waterpark resort industry. Great Wolf Resorts Inc 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. We counted the two Kalahari Resorts as independents, although this familiar name is another emerging national brand as they seek their third location.
Wave Development Inc of Milwaukee WI, in partnership with Sage Hospitality of Denver CO and Horizon Investments of Milwaukee WI, have created an emerging brand of indoor waterparks called CoCo Key Resorts in six locations that are open and two locations under construction. Of the eight locations, four are affiliated with Sheraton, one with Holiday Inn and one with Marriott.
When indoor waterparks first emerged, developers had to educate the major hotel chains about the concept. Now two hotel chains, Marriott and Holiday Inn, are creating indoor waterpark prototypes. Marriott announced it would participate with Nickelodeon to build up to 20 specialty resorts using SpongeBob SquarePants to attract the family market. Holiday Inns (IHG) is working on prototypes for converting holidomes into indoor waterparks, adding new indoor waterparks to existing hotels and building a new brand of waterpark resorts.
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Tundra Lodge Resort --- Joe Buralli of Waterpark H2Otels USA LLC of McHenry IL purchased the 161-room Tundra Lodge Resort & Waterpark in Green Bay WI from Lombardi Ave Waterpark LLC in February, 2007. Closing is expected within 90 days. The resort has a 20,000 sf indoor waterpark. The resort had under-performed due to lack of conference space. "You have to sell rooms every day, including Sunday through Thursday," according to Buralli who plans to add 10,000 sf of conference space. He said the amount of lost business due to have no conference space is staggering. Buralli said he will contract with FLG Hospitality of Columbus OH to manage the operation. Regarding a flag, Buralli said Wyndham Hotels & Resort is interested in adding the Tundra Lodge to its network, but no decision has been made to affiliate with a brand.
Boyne USA --- In June 2007, Boyne USA purchased two ski resorts in Maine, Sunday River and Sugarloaf, from American Skiing Company for $77 million in cash. Closing is scheduled on or before July 31, 2007.
Sunday River features 131 trails spread across eight interconnected peaks serviced by 18 lifts, including four high speed quads, two full-service fractional ownership hotels, a recently constructed Robert Trent Jones golf course and other four-season resort offerings.
Sugarloaf USA boasts New England’s longest continuous vertical drop of 2,820 feet and only lift service above treeline skiing. The four season resort also features one fractionally-owned hotels, conference center and golf course.
Headquartered in Michigan, Boyne USA is a privately held company that has interests in seven North American resorts, including Big Sky Resort in Montana; Boyne Mountain, Boyne Highlands and Bay Harbor in Michigan; Brighton in Utah, Crystal Mountain in Washington and Cypress Mountain in British Columbia, Canada.
Boyne Mountain Ski Resort in Boyne Falls MI opened Mountain Grand Lodge, its 200-unit condo hotel and 57,000 sf indoor waterpark, Avalanche Bay, in May 2005 --- as part of their strategy to become a four-season resort. Could a indoor waterpark at a ski resort in Maine be far behind?
The Depot Hotel & Waterpark --- The Courtyard by Marriott at the Depot in downtown Minneapolis is under-going a multi-million dollar renovation, after which it will convert to Marriott’s more upscale Renaissance brand. The hotel has had somewhat of an identity crisis since it opened in 2000. "The downtown location draws business travelers during the week while the indoor skating rink and 10,000 sf indoor waterpark attracts families on the weekend," according Robb Hall, managing director. The owner, Minneapolis- based CSM Lodging, decided to switch to the full-service Renaissance flag in response to customer requests for more amenities. The hotel will add a business center, a conference room for teleconferencing, individual wireless work stations and a club room for frequent travelers. In mid May 2007, the hotel officially became The Depot, a Renaissance Hotel by Marriott.
Mt Olympus --- In March 2007, owners of Mt Olympus Water and Theme Park in Wisconsin Dells purchased the neighboring Treasure Island Resort and related properties that will be incorporated into a single Greek-themed entertainment complex.
The purchase included Treasure Island, Captain’s Quarters and Pleasant View lodging properties along with Bay of Dreams indoor waterpark and the former Family Land Outdoor Waterpark properties from Jim Mattei. All of the properties have been acquired by the sole proprietors of Mt Olympus, Nick and Eva Laskaris. All the properties will be renamed and upgraded to reflect the Greco-Roman theme.
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Twenty-two (22) hotel waterpark projects opened during the first half of 2007 with another twenty-six (26) scheduled to open in the second half of this year.
| HOTEL WATERPARK RESORTS SCHEDULED TO OPEN IN 2007 | |||||
|---|---|---|---|---|---|
| Name | Location | Rooms | Indoor Waterpark Sq Ft |
Open | |
| Clock Tower Resort Add IWP | Rockford | IL | 252 | 60,000 | 200701 |
| IWP at Sea Island on the Beach | Myrtle Beach | SC | 149 | 10,000 | 200701 |
| Holiday Inn & Suites & IWP | Maple Grove | MN | 136 | 25,000 | 200702 |
| Holiday Inn West Holidome Conversion | Topeka | KS | 197 | 11,000 | 200703 |
| Holiday Inn Express Add Rooms & IWP | Dundee | MI | 176 | 25,000 | 200704 |
| Bridges Bay Resort & IWP | Spirit Lake | IA | 72 | 19,800 | 200704 |
| Mt Olympus (former Capt Quarters) | Wisconsin Dells | WI | 200704 | ||
| Mt Olympus (former Familyland OWP) | Wisconsin Dells | WI | 200704 | ||
| Mt Olympus (former Pleasant View) | Wisconsin Dells | WI | 200704 | ||
| Harrah’s Casino Hotel & Domed Pool | Atlantic City | NJ | 172,000 | 200705 | |
| Sheraton Resort IWP Addition | Danvers | MA | 367 | 65,000 | 200705 |
| Canad Inns Splashers at Alerus Center | Grand Forks | ND | 192 | 40,000 | 200705 |
| Flying L Ranch Add Rooms & OWP | Bandera | TX | 76 | 200705 | |
| Kings Point Waterpark Resort | Storm Lake | IA | 100 | 20,000 | 200706 |
| Northern Bay Golf Resort & Marina | Arkdale | WI | 225 | 20,000 | 200706 |
| Quality Inn & Suites Rain IWP Addition | Sandusky | OH | 89 | 5,000 | 200706 |
| Chula Vista P2 Add Condominiums | Wisconsin Dells | WI | 150 | 200706 | |
| Chula Vista P2 Add Dome Sports Center | Wisconsin Dells | WI | 0 | 200706 | |
| Glacier Canyon Lodge Add Golf Course | Wisconsin Dells | WI | 0 | 200706 | |
| Best Western Aberdeen Convert IWP | Aberdeen | SD | 154 | 200706 | |
| Hotel Condos & Indoor Waterpark | Seattle-Woodinville | WA | 150 | 200706 | |
| BW Ramkota Hotel Convert IWP | Casper | WY | 229 | 200706 | |
| Isle of Capri Casino Hotel at Lost Island OWP | Waterloo | IA | 200 | 200707 | |
| Splash Universe Waterpark Resort | Shipshewana | IN | 154 | 25,000 | 200708 |
| Holiday Inn Suites & Dome Waterpark | Toledo-Maumee | OH | 106 | 22,000 | 200708 |
| Holiday Inn Central Add IWP | Omaha | NE | 383 | 40,000 | 200709 |
| Grand Cambrian Resort & I-OWP | Wisconsin Dells | WI | 308 | 35,000 | 200709 |
| Radisson Resort & Waterpark | Albuquerque | NM | 314 | 23,000 | 200709 |
| Glacier Canyon Lodge Add to CC | Wisconsin Dells | WI | 0 | 200709 | |
| Mt Olympus Treasure Island Add Timeshare | Wisconsin Dells | WI | 24 | 200709 | |
| Great Wolf Lodge at Grapevine | Grapevine | TX | 404 | 80,000 | 200710 |
| Great Wolf Lodge | Grand Mound | WA | 390 | 67,000 | 200711 |
| Sheraton North Add IWP Coco Key | Cincinnati-Sharonville | OH | 357 | 50,000 | 200711 |
| Great Adventure Water Resort (Days) | Bellevue-Omaha | NE | 129 | 30,000 | 200711 |
| Great Wolf Resort Add CC | Traverse City | MI | 200711 | ||
| Kalahari Resort IWP Addition | Sandusky | OH | 0 | 93,000 | 200712 |
| Silver Mountain Resort & IWP | Kellogg | ID | 268 | 45,000 | 200712 |
| Crowne Plaza IWP Addition | Asheville | NC | 0 | 42,000 | 200712 |
| Red Jacket Mountain View Add IWP | North Conway | NH | 162 | 40,000 | 200712 |
| Embassy Suites & IWP Phase 2 | Cincinnati-Forest Park | OH | 150 | 40,000 | 200712 |
| Split Rock Resort IWP Addition | Lake Harmony | PA | 500 | 40,000 | 200712 |
| Westgate Timeshare Resort Add IWP | Gatlinburg | TN | 0 | 40,000 | 200712 |
| Silverleaf Resort IWP Addition | Galveston | TX | 25,000 | 200712 | |
| Interlaken Resort & Spa Add Rooms & IWP | Lake Geneva | WI | 414 | 20,000 | 200712 |
| Wyndham Garden Condo & IWP | Kent | WA | 150 | 6,000 | 200712 |
| Kalahari Resort Condo Additions | Sandusky | OH | 288 | 200712 | |
| Hotels (3) + Indoor Waterpark at BIA | Buffalo | NY | 350 | 200712 | |
| Embassy Suites & IWP Phase 1 | Cincinnati-Forest Park | OH | 250 | 200712 | |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting. June 2007. | |||||
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In Canada, we have identified 114 hotel indoor waterparks that are open and operating in 2007. 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.
| 2007F | 2006 | 2005 | 2004 | 2003 | 2002 | Province |
|---|---|---|---|---|---|---|
| 42 | 42 | 41 | 41 | 38 | 35 | Alberta |
| 22 | 22 | 22 | 22 | 20 | 19 | Saskatchewan |
| 15 | 15 | 15 | 15 | 13 | 11 | British Columbia |
| 14 | 12 | 10 | 11 | 9 | 6 | Ontario |
| 10 | 11 | 11 | 9 | 9 | 7 | Manitoba |
| 6 | 6 | 6 | 6 | 6 | 2 | Quebec |
| 2 | 2 | 2 | 2 | 2 | 1 | Prince Edward Island |
| 3 | 3 | 3 | 2 | 2 | 1 | Nova Scotia |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting. | ||||||
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.
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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.
| TOP 15 CANADIAN HOTEL WATERPARK RESORTS BY SIZE OF WATERPARK | ||||
|---|---|---|---|---|
| Name | Location | Rooms | Indoor Waterpark Sq Ft |
|
| World Waterpark West Edmonton Mall | Edmonton | AB | 0* | 217,800 |
| Fallsview Indoor Waterpark | Niagara Falls | ON | 125,000 | |
| Great Wolf Lodge | Niagara Falls | ON | 404 | 103,000 |
| Ameri-Cana Resort | Niagara Falls | ON | 160 | 19,100 |
| Travelodge World Hotel | Ottawa | ON | 177 | 13,000 |
| Ramada Hotel & Suites | Lethbridge | AB | 119 | 13,000 |
| Best Western Jurassic Inn | Drumheller | AB | 49 | 6,200 |
| Medicine Hat Lodge Hotel | Medicine Hat | AB | 193 | 6,000 |
| Travelodge Hotel | Medicine Hat | AB | 92 | 5,600 |
| Riviera Hotel near West Edmonton Mall | Edmonton | AB | 5,500 | |
| Best Western Hospitality Inn | Calgary | AB | 261 | 5,400 |
| Douglas Fir Condo Resort | Banff | AB | 133 | 5,000 |
| Ramada Renaissance Hotel | Saskatoon | SK | 144 | 4,800 |
| Remai Regina Hotel & Convention Center | Regina | SK | 235 | 4,600 |
| Sheraton Cavalier Hotel | Saskatoon | SK | 249 | 4,400 |
| Source: Jeff Coy & Bill Haralson, Hotel Waterpark Resort Research & Consulting. October 2006. * Fantasyland Hotel at West Edmonton Mall has 355 rooms. |
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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.Back to Contents | Back to Article Archive
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.
| MEXICAN HOTEL WATERPARK RESORTS | ||
|---|---|---|
| Name | Location | |
| Hotel Balneario de Lourdes | Sta Maria SLP | Mexico |
| Hotel Balneario Spa La Caldera | Abasolo GTO | Mexico |
| CICI Acapulco Magico Waterpark | Acapulco | Mexico |
| Wet n Wild | Cancun | Mexico |
| Splash Hotel Parque Acuatico Nayrit | Mexico City | Mexico |
| Balneario Ixtapan Waterpark | Mexico City | Mexico |
| Persaventura Waterpark | Piedras Negras COA | Mexico |
| Balneario San Jose Waterpark | Quiroga MICH | Mexico |
| Balneario El Rollo | Morelos | Mexico |
| Tangamanga Splash | San Luis Potosi | Mexico |
| Parque Acuatico El Rollo | Tlaquiltenango | Mexico |
| Source: Hotel Waterpark Resort Research & Consulting. | ||
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Based on our review of consumer behavior, lifestyle changes and travel trends, here are 17 Predictions on the Future of Resort Development:
Recent announcements indicate that these predictions are coming true at an accelerating pace.
Investors continue their hunger for hotels, according to a recent report by Jones Lang LaSalle. Five major public hotel companies went private in 2006. In January 2007, Morgan Stanley Real Estate spent $6.6 billion to acquire CNL Hotels & Resorts, an unlisted REIT that owns a share of two Great Wolf Lodge waterparks in Wisconsin Dells and Sandusky OH. Contributing to the frenzy for hotel assets are low interest rates, strong industry performance, a glut of capital and smaller returns in other types of real estate. Lodging demand is expected to remain ahead of the rising hotel room supply pipeline.
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Construction of office building, hospitals, hotels and other non-residential buildings will increase almost 7% in 2007, driven by growth in the economy, compared to growth of almost 6% in 2006, according to the American Institute of Architects in January. If this forecast holds true, 2006 and 2007 will be the best two-year period for construction since the late 1990s.
Hotels are expected to show the biggest increase in construction, with a growth rate of 13.1%. Amusement park and recreation properties are next with 9.9% growth, followed by office buildings at 9%.
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Jeff Coy is president of JLC Hospitality Consulting based in Cave CreekAZ. You can reach him at 480-488-3382 or email him at jeffcoy@jeffcoy.com or go to www.jeffcoy.com. Bill Haralson is president of William L. Haralson & Associates of RichardsonTX. You can contact him at 505-802-1522 or email wharalson@aol.com or go to www.wlha-inc.com.
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