A few open to the public at certain times using day passes. Most properties limit their waterpark admissions to hotel guests. For example, a 300-room waterpark resort running 70% occupancy with a customer mix of 60% individual leisure guests times 6 persons per room could expect waterpark attendance of 275,940 persons annually. Indoor waterpark attendance is a calculation of available rooms, occupancy, customer mix and persons per room/suite. The extent of the impact on ADR depends on size and entertainment value. Of course, for smaller hotels, the waterpark impact on the combined ADR is less. So an upscale resort without an indoor waterpark and suites costing $175 can now charge $325 - if it has an indoor waterpark. For a party of 6 persons in a suite, that adds a waterpark premium of $150 to the normal room rate. Having an indoor waterpark can add up to $25 per person to the room rate for an upscale hotel or resort. Most hotel waterpark resorts combine the room rate and waterpark admission into a package price that adds substantially to their ADR - average daily rate. So, the smart investor will insist that hotel waterpark resorts design their facilities for business travelers and conference attendees as well as the family market. Groups are needed during other low occupancy periods. Individual business travelers are needed during weekdays. Waterpark family users contribute to hotel occupancy only when school is out, so other types of customers are needed to run the highest possible occupancy. The hotels with indoor waterparks that run the highest occupancy have a balanced customer mix of business & leisure, group and individual. This upward trend begs the question, “How long can you succeed in Wisconsin Dells as a hotel without an indoor waterpark?” The haves are capturing a bigger and bigger market share while the have-nots continue to lose share. The 44 hotels without indoor waterparks split the leftovers. The 18 hotels with indoor waterparks captured 75% of the total hotel market room revenue in 2001, 77% in 2003 and 81% in 2003. Our research of the haves and the have-nots in Wisconsin Dells over the last several years proves the positive impact of having an indoor waterpark. They achieve higher occupancies up to 26 points higher than ordinary hotels. Hotels with indoor waterparks consistently sell more room nights than hotels without indoor waterparks. Urban entertainment centers will become more popular and include hotels with indoor waterparks. Urban locations will attract hotel waterpark investment to revive downtowns and convention centers. Ski resorts, golf resorts, beach & lake resorts and resort conference centers are ideal locations for hotel waterpark investments. Resort destinations are excellent locations for hotel indoor waterparks. Therefore, interstate access & visibility within 200 miles of a major population center are extremely important. Families are willing to drive 200 miles in the middle of January to spend a weekend at an indoor waterpark, but the highway must be clear of snow and safe to travel. Recreational locations with interstate highway access and within 200 miles of a major metro area are excellent targets for hotel waterpark development. Indoor waterparks greatly reduce lost business due to weather and helps to preserve those revenues already booked. Hotels and resorts with indoor waterparks save the day with a venue that is weather-proof. Weather is no longer a risk factor for hotel waterpark resorts. Many times, even in peak season, poor weather will result in trips, vacations and meetings being cancelled. Hotels/resorts with an indoor waterpark extend their peak seasons from 100 days to 365 days. Hotels with indoor waterparks fill rooms almost 100% every weekend and school break all year long. However, seasonality is no longer a risk factor for hotel waterpark resorts. Seasonal properties find it increasingly difficult to pay annual expenses with a short peak season. Ordinary hotels, especially resorts, have big gaps in their business from season to season, month to month and weekdays versus weekends. Here are the risk factors you need to consider: Resorts are hot! Thinking about investing in hotel waterpark resorts? Eleven percent of all new hotel and resort projects in the pipeline have a condominium component. In 2004, resorts achieved higher occupancies and revenues than any other type of lodging investment. Three major ski resorts have opened or will soon open indoor waterparks to create weather-proof vacations and capture year-round revenues. Hotels and resorts with indoor waterparks now total 104 in 2005 with 52 under construction and another 121 in development.
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