Game Plan

Games form a key revenue component. Here’s how to reap the rewards.

Water and games mix well together when you know the right formula. While guests like to hang out in the waterpark, they also want to enjoy some dry entertainment. Games and family attractions not only accomplish this need, but also provide an opportunity to generate huge revenues for the indoor waterpark resort. Families have a chance to bond while playing, and saving redemption tickets or points for a desired prize is a key reason guests return to the resort.

Still not convinced you should add games to your waterpark resort mix? Consider that coin or debit card-operated amusement games produce the highest revenue returns per square foot of any other revenue source (with the exception of casino slot machines). In fact, a properly run amusement game center will average $200 to $300 per week per game. On 75 games, that translates to $750,000 to $1 million annually.

For larger hotels (300 + rooms) with larger indoor waterparks (more than 50,000 square feet), this equates to game revenues that exceed $30,000 per week, or $1.5 million per year. Today, redemption (games in which tickets are won) is the top game category. Redemption games generate up to 75 percent of the total game revenues, with video/novelty and instant win games, such as cranes, equally making up the remaining 25 percent.

Many existing resorts have the capability to increase game revenues. Unrealized revenues can be staggering. One simplified method for tracking game revenue is by per occupied room, aka REVPOR. Divide the daily game revenue by the number of rooms occupied the night prior, and add them up for a week. For facilities that only permit hotel guests to use the indoor waterpark, REVPOR ranges from $10 to $40 for the games alone.

The REVPOR depends on the hotel type: economy, mid-range or high-range; how many other amenities are available (retail, food and beverage, dry attractions plus spending opportunities outside the property); number of people per room, ages and number of children on site. When outside guests are permitted to use the waterpark and the games (for example, birthday parties, group events, waterpark day passes), this additional spending on games needs to be tracked and added to REVPOR. These revenues can be tracked through the use of a debit card system.

When choosing games for your waterpark hotel, here are some costs and accounting to consider:

• The average cost of a game is $4,000 to $4,500 with a mix of new and reconditioned units.
• Other expenses — including bill changers, ticket eaters/centers, coin and bill counters, redemption tickets, tokens and a one-month supply of prizes — will come to approximately 20 percent of the total game cost.
• Use $200 a week per game as an average revenue figure to help you determine how many games to install. Note that a game could earn double or triple this amount during peak weeks when the hotel is fully booked with families.
• Make sure you have as many of the “workhorse” games (the 20 percent that earn 80 percent of the revenues) for each category (redemption, video, instant win, novelty). These games are positioned to maximize revenues.
• See to it that the redemption games’ ticket payout percentages are balanced according to the inverse of each game’s entertainment value. The total cost of sales (prizes redeemed) should average approximately 25 percent of gross redemption revenues.
• Location and design of the game space is critical. Resort owners and managers should always have an expert experienced in games and dry attractions on the design teams from the project’s beginning. Architects should not be expected to know how to properly locate and design a game space.
• When planning a game space, the first thing to do is situate it in the hub of the traffic flow. The best location is on the main level between the hotel and the indoor waterpark entrance, so guests will pass by or through the game area. Don’t place it at the end of a corridor or far inside the hotel, where it must be discovered by hotel guests.
• If in a closed space, make sure the entrance doors are double glass — and plenty of it so that guests can see into the bright space. Higher ceilings (a minimum of 12 feet) will draw more attention. Control the area’s temperature and humidity because many patrons will be in wet bathing suits. Be sure to seal the space off from the waterpark climate to avoid dampness and mildew.

Here are other spacing suggestions

• Use 50 square feet per game for space sizing purposes. This square footage includes aisle space, redemption prize center, a small prize storage area, and space for bill changers, ticket centers and other related equipment.
• Locate the video games away from the redemption and instant win machines so the video players (mostly male teens) will be separated from the parents with young children.
• Keep the redemption games near the redemption prize center, with high visibility from the outside. Place instant win games near entrances and exits.
• Lay out the games in clusters of up to four in the middle of the room. Keep circular games by themselves so players can walk around them.
• Use indirect lighting to minimize glare on video screens and machines. Keep the game space bright and inviting for parents with young children.
• Assign one floor attendant for every 50 games. This person will be in charge of loading tickets, unjamming coins and tickets, and interacting with customers.
• Finally, keep in mind that it takes a minimum of 90 to 120 days of planning to properly design, coordinate and set up a top-quality game space. But the time, expense and effort are well worth the potential returns.

About the Author

Frank Seninsky is president of the Alpha-Omega Group, which includes Amusement Entertainment Management, LLC, based in East Brunswick, N.J. He is a frequent speaker and writer for the leisure entertainment industry.