Market Feasibility Report

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  • Topic: Waterpark, Hotel, Wisconsin Dells, Wisconsin
  • Pages : 9 (2787 words )
  • Download(s) : 67
  • Published : December 28, 2012
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What’s the Market Feasibility Process for
Hotel Waterpark Resorts?
A Guide for Owners & Developers
By Bill Haralson & Jeff Coy
Within the past five years, a new concept has developed --- the waterpark resort, a pairing of lodging facilities with an indoor waterpark.
The concept was conceived in the Wisconsin Dells, when the Polynesian Resort added indoor water features in an attempt to improve that property’s occupancy rates. The project was an immediate success and other properties quickly followed suit with indoor water features of their own. At last count, there were 18 properties in Wisconsin Dells with some type of indoor water features. In addition, some 30 waterpark resorts have been developed throughout the Midwest.

The increasing popularity of the waterpark is illustrated by the concept’s success in the Wisconsin Dells. A study of the Dells lodging industry revealed that 18 hotels with indoor waterparks accounted for 85 percent of the market room revenue, while 44 properties without indoor water features accounted for the remaining 15 percent. As a group, the waterpark resorts in the Dells had a combined occupancy rate that was 26.9 points higher than the other 44 properties. And average room rates were $69 higher for the haves compared to the have-nots. Given the astounding performance of hotel waterparks in Wisconsin Dells, it is little wonder that the concept is proliferating at an increasing rate.

Despite the success of the waterpark resort, as with any venture, there are challenges and pitfalls. Since this is a new industry, data is generally limited regarding waterpark resort planning. Questions abound regarding such issues as sizing of the hotel, the guest rooms and the waterpark “box” or “footprint”. Lacking solid information, many would-be waterpark developers are making the trek to the Dells to “see how it is done”. Herein lies the problem: What is best for the Dells may not be best for the next market.

Although we have learned that the success of the Dells is transferable and repeatable in other markets, there are significant differences in new markets that must be understood --- population, households, families with kids up to age 14, incomes and certainly the mix of visitors to each market --- business travelers, meetings, social groups and leisure travelers. Each market needs to be analyzed in depth to measure the demand for a hotel waterpark resort. A market study helps the developer avoid these pitfalls.

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Over the past few years, we have made a concerted effort to become better educated regarding waterpark resorts, seeking to learn what works and what doesn’t work so well.
We have developed a database of more than 50 waterpark resorts in the U. S., and approximately 80 in Canada. We are now working on Mexico, Europe and the rest of the world. We have made numerous contacts among waterpark owner/operators as well as designers, architects, engineers and builders. Many of these people serve on the World Waterpark Association’s resort task force and participate in the annual waterpark resort workshop held in conjunction with the WWA convention.

Surely but slowly, the hotel waterpark resort industry is beginning to jell and develop a set of standards that has been a hallmark of the outdoor waterpark industry for over 20 years. More and more, it is becoming apparent that for the waterpark resort industry to achieve its full potential, individual projects must be designed and built with the help of professionals that understand the waterpark resort concept and that possess the expertise to analyze each market and site for conversions and new construction.

Generally, the planning process for any income property should begin with a market and financial feasibility study. Until fairly recently, few such studies had been conducted, and the body of knowledge required for such studies was limited. That situation has changed rapidly as more waterpark resorts are built and their operating...
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