NATIONAL REPORT— When hotel owners started to experiment with waterparks, primarily in the Midwest, it was with the intention of raising occupancy levels that were on the decline several years ago. However, hotel owners soon discovered that waterparks could do more than boost occupancy, as they had the potential to extend seasons, increase value and drive revenue with higher rates.
“We’re not just selling lodging, we’re selling entertainment,” said John Emery, CEO of Great Wolf Resorts. “The reason waterparks are important is that they give a consistency of experience regardless of weather, regardless of time of day. It’s an inducement for staying at the hotel.”
Waterparks began popping up all around Wisconsin and Michigan in the mid-’90s as the hotel owners discovered that the slow days of winter were suddenly popular with families who were visiting nearby tourist attractions and were excited to have a place for their children to swim.
“Throughout the upper midwest you have good exposure so a lot of those families who stop in the area for the big theme parks will stop [here],” said Jon Kennedy, senior vp, marketing and development for AmericInn. “There was a big interest for a little bit more of an enhanced pool experience and we added a new dimension to it about two years ago called The American Splash Bay Adventure.”
The American Splash Bay Adventure is available at eight locations and includes waterslides and a host of children’s activities for the pool. Although they are only in their infancy, AmericInn has already seen positive numbers.
“We’re obviously seeing a more positive justification and right now our system-wide average rates are well above our averages,” Kennedy said. “We’re getting strong rates, especially on weekends. Normal weekend rates could be anywhere from $75 to $100 but we are in the $125 range, which is a good target with the waterparks.”
Emery said that historically returns on the property already developed in the Great Wolf family were great. “We just ran last quarter at 72% occupancy. For a a full year you’re closer to high ‘60s,” he said. The company plans to build two water parks a year and has its next four years of growth already planned out.
Victor Martin, who owns the Best Western in Sterling Heights, MI, has been ecstatic with the hotel’s rate of occupancy since it became the first Michigan hotel to offer a waterpark. The hotel features a 5,000 square-foot pool with a three-story water slide, lazy river and two whirlpools.
“In the winter we are jammed on weekends. Holiday periods we are certainly busy. In summer we rent the same amount of rooms for the water-park but they are spread out during the week,” Martin said. “Weekends are 100% in the winter time and accounts for 10% of occupancy in summer through the whole week.”
One challenge with offering a waterpark is that it creates some problematic staffing issues. Not only do the hotels need to live up to its state’s codes for lifeguards and on-site personnel, but it causes a ripple effect throughout the entire hotel.
“You have to staff to code so you can’t have people working on days you think it will be busy,” said Mark Snyder, senior vp, brand management, Holiday Inn Hotels & Resorts. “Water parks also appeal to school groups who generally pack 5 to 6 people in a room and that impacts housekeeping, the front desk, concessions, and enough staff needs to be on hand to handle the load.”
“There are always high arrivals at check-in times on Friday and Saturday because they want to maximize their time in the waterpark,” Martin said. “That requires more people to work at those times.”
Being Covered
Insurance is another area where things change for a hotel once a waterpark becomes associated with it. Hotels have done a great deal in recent years to eliminate risk by removing diving boards, making the pools shallow and disallowing some pool toys, but a waterpark changes insurance levels pretty dramatically.
“The dynamic of a waterpark includes slides, ladders, more activity and more sensory stimulation in the pools,” Snyder said. “The pendulum is swinging the other way now and rates are getting higher.”
“Insurance, energy costs, labor; we have all the challenges,” Emery said. “They are actually very, very complex operations to run. People are with you for the bulk of their stay, unlike a typical hotel where they are there when they’re sleeping.”
While leisure travelers are certainly getting the most out of the waterparks, however, Martin says that business travelers will also take advantage of the amenities.
“They bring their children with them on weekends or those with smaller kids will bring their whole families during a business trip,” he said. “There’s more opportunity for a corporate guy to do this than if he was staying at a regular hotel.”
Not that the midwest is the only place the waterparks are thriving. Great Wolf Lodge recently opened a site in Williamsburg, VA.
Meanwhile, the Best Western Pelican Beach Resort has gotten a lot of mileage out of its lazy river water ride in Fort Lauderdale. And on Memorial Day, the Nickelodeon Suites by Holiday Inn will open two much anticipated waterpark areas in its Orlando hotel.
Its Lagoon is a courtyard featuring a zero-depth entry pool anchored by a four-story interactive water tower featuring multiple slides, climbing nets, water jets, and a 400-gallon dump tank that splashes down unexpectedly. Its Oasis contains slides and flumes.
“It’s a whole new way of thinking,” said Terry Whaples, owner of the property. “Bookings have been very strong and we are very excited about the opening.”
“It really is a completely different operating model than a hotel,” Emery said about the waterparks. “Our revenue is lodge driven in a sense but what they are paying their $200-something a night for is the entertainment not just for the room.”