2015 Waterpark Industry Update

The waterpark industry has shown continued growth in 2014 with increased numbers of indoor and outdoor waterparks being developed throughout the United States and Canada. Our projections for 2015 show a number of new openings will occur throughout North America, which will boost the supply of waterparks and increase revenues for this growing industry.

As the amount of indoor waterpark square footage and number of outdoor waterparks increase in 2014 and 2015, many new parks are looking to the latest trend in recreational water entertainment to set them apart. Simulated surf machines provide a skill-based entertainment option and spectator sport. They are popular with older children, teenagers and young adults due to the inherent challenges in surfing.

H&LA defines various waterparks the following ways:

• An indoor waterpark resort is a lodging establishment containing an aquatic facility with a minimum of 10,000 square feet of indoor waterpark space inclusive of amenities such as slides, tubes, and a variety of indoor water play features.
• A resort with an outdoor waterpark is a lodging establishment with an outdoor aquatic facility with three or more waterpark elements requiring lifeguards such as slides, lazy rivers, or wave pools.
• A standalone indoor waterpark is an aquatic facility that is not attached to a lodging establishment with a minimum of 10,000 square feet of indoor waterpark space inclusive of amenities such as slides, tubes, and a variety of indoor water play features.
• An outdoor waterpark is an outdoor aquatic facility with three or more water slides. It often also includes other water elements requiring lifeguards such as lazy rivers, surf simulators, or wave pools. These parks will often offer additional splash features for younger children.

Waterpark Standings

The number of U.S. waterparks reached 858 by March 2015, with the majority being outdoor waterparks (most of which are municipally owned). This is a 24-park increase from our March 2014 waterpark industry overview, which indicated there were 834 waterparks in the United States.

2015 U.S. Open Waterpark Supply by Region

At 339 waterparks, the Midwest boasts the largest concentration of waterparks in the U.S. The Midwest leads in the number of indoor waterpark resorts and standalone indoor waterparks and is a close second to the South for outdoor waterparks. The Midwest will continue its indoor waterpark stronghold in 2015. Of the new indoor waterpark resorts and expansions scheduled, five are in the Midwest. The remaining two in the Northeast are by far the largest, however. A standalone indoor waterpark is expected to open in Canada as well.

Indoor Waterpark Resorts and Standalone Indoor Waterparks:

More than 400,000 square feet of indoor waterpark space and over 1,400 rooms are planned for 2015. The two largest indoor waterpark resorts, Camelback Lodge and Kalahari Resort, are opening in the Poconos region of Pennsylvania.

With 125,000 square feet of indoor waterpark, Camelback Lodge and Aquatopia is the largest resort set to open this year. The multi-level indoor waterpark is expected to offer seven pools, 13 slides, an adventure river, the longest indoor water coaster in the U.S., and a FlowRider. Accommodating five age groups, an immersive aqua-play structure will offer slides, nearly 100 water gadgets and play features, and a 1,000 gallon dumping bucket. A transparent roof will allow for natural sun light year-round. Snack shops, a swim-up bar, and private cabanas will round out the amenities.

The next largest indoor waterpark resort slated for 2015 is Kalahari Resort in the Poconos. The 106,000 square foot indoor waterpark will include a FlowRider, water coaster, lazy river, basketball pool, swim-up bar, two interactive splash structures for children of varying ages, five large slides, numerous smaller slides, and multiple whirlpools. The roof is retractable, and cabanas will be available for rent. The property will also house 65,000 square feet of meeting/event space, spas, shopping, multiple food and beverage outlets and restaurants, and Camp Kalahari with children’s activities. Additionally, there will be a 30,000 square foot family entertainment center with black-light mini golf, arcade games, 5-D theater, and black-light mini bowling. The outdoor pool will feature a swim-up bar and bungalows for rent.

South Dakota is expected to see the addition of a 14,000 square foot indoor waterpark to the Days Inn in Brookings; the addition of a 145-room hotel to the existing WaTiki Indoor Waterpark Resort in Rapid City; and the 77,000 square foot Rippin’ Rapids Resort and Adventure Sports, also in Rapid City. Rippin’ Rapids, originally slated to open in 2014, will be the largest indoor waterpark resort in South Dakota. It is expected to include a SurfStream, lazy river, numerous slides, whirlpool, and an interactive water play center. An outdoor waterpark, zipline, climbing walls and jumping cliffs are also planned. The property will also to offer 100 suites, an arcade, restaurant, fitness center, and sauna.

During the past year the Depot Indoor Waterpark at the Renaissance Hotel in Minneapolis, Minnesota closed (due to an expansion of the hotel), increasing to the number of indoor waterparks to 15, which have closed in the United States and Canada since 2009.

Outdoor Waterparks:

 The U.S. supply of waterparks is dominated by outdoor waterparks. In 2015, three private and 12 municipal parks are expected to open, for a total of 15 waterparks.

As is typical, the privately owned parks are significantly larger than municipally owned parks, with an average of more than six large slides planned compared to an average of fewer than three large slides at the municipal parks.

The three private outdoor waterparks and one of the municipal parks will open in Texas. Most of the municipal waterparks are located in the South as well. In all, 53 new large slides at outdoor waterparks are slated to open in 2015. Smaller slides are often not announced prior to opening but contribute to a larger number of total slides reported by year-end.

Four large outdoor waterparks opened in 2014, Hurricane Bay at Kentucky Kingdom; Cowabunga! Bay Las Vegas; Hawaiian Falls Waterpark in Pflugerville, Texas; and Hawaiian Falls Waterpark in White Settlement, Texas. Schlitterbahn Beach Waterpark in Corpus Christi, Texas, saw a partial opening in 2014 but expects to open all of the rides and concessions and part of the 90-room hotel in 2015.

Resorts with Outdoor Waterparks:

 Outdoor waterparks can enhance a hotel’s amenities and attract additional guests. They may be the deciding factor when it comes to family lodging options. Margaritaville is expected to open this year with surf simulators and multiple pools. Existing waterparks at Dollywood (Splash Country) in Pigeon Forge, Tennessee, and Legoland in Winter Haven, Florida, are adding hotels this year, taking them from outdoor waterparks to resorts with outdoor waterparks.

Legoland California opened as an amusement park in 1999, added a waterpark in 2010, and added a hotel in 2013. In 2014, it expanded its waterpark with a theme from its latest product line, Legends of Chima. Four Seasons Resort at Walt Disney World opened last August with two slides, lazy river, splash zone, and pools.

Surf Simulators: 

Many new and existing parks are looking to the latest trend in recreational water entertainment to set them apart. Simulated surf machines provide a skill-based entertainment option and spectator sport.  Surf simulator brands include FlowRider and FlowBarrel by WaveLoch, Whitewater West, and Aquatic Development Group; SurfStream by American Wave Machines; and StingRay by Murphy’s Waves.

They allow parks the opportunity to charge additional fees, sell additional passes, charge for lessons, increase merchandising, and host events. Many spectators purchase food and beverages while watching experienced surfers and boarders perform. While new boarders enjoy learning the sport, experienced boarders can develop and perfect new tricks, thus sustaining the attraction.

Of the waterparks opening in 2015, one of the resorts with an outdoor waterpark and the three largest indoor waterpark resorts will feature one or more surf simulators. Puerto Rico’s outdoor waterpark, Surf ‘n Fun, will be home to the island’s first double FlowRider surf simulator when it opens this year.

Conclusion: 

The waterpark industry continues to grow and thrive. Waterparks have proven themselves as fun, safe, and much desired vacation destinations for families with children. In an effort to select a vacation with children’s interests in mind, more families look to waterpark resorts to provide a true family vacation experience that has something for everyone to enjoy. At the local level, outdoor waterparks attract visitors from the surrounding areas who want the waterpark experience closer to home.

Although outdoor waterparks are less expensive to build, they are weather dependent, and poor weather during the summer season can negatively impact financial results. Successful indoor waterpark resorts can yield much higher profits but come with a much higher price tag. Not all ventures are successful, and funding is still challenging to obtain. Lack of funding is the main reason many proposed projects never see the light of day. With new expansions and openings comes increased competition. Waterparks need to work hard to distinguish themselves from competitors. The addition of surf simulators has proven to be a competitive advantage for waterpark operators. Not only do they offer an additional exciting amenity for guests, surf simulators are proven revenue generators that can positively impact the bottom line.

Because of the many factors that contribute to a project’s success, proper planning must be combined with professional waterpark feasibility and economic impact studies for any waterpark development. The development of an indoor or outdoor waterpark requires extensive research of supply and demand factors, demographics, income and expense levels, potential per capita spending, potential attendance, and profitability levels.

Author

David J. Sangree, MAI, CPA, ISHC, is President of Hotel & Leisure Advisors, a national hospitality consulting firm.  Mr. Sangree’s expertise is in the appraisal and analysis of hotels, resorts, indoor waterpark resorts, outdoor waterparks, amusement parks, conference centers, ski resorts, and golf courses. He has performed studies on more than 2,000 existing and proposed hotels in more than 46 states and internationally in all price ranges, including economy, full-service, extended-stay, and luxury hotels and resorts including indoor waterpark resorts. He has been an active appraiser/consultant since 1987 and also has 10 years of work experience in the hotel/restaurant industry, including management positions with four Westin Hotels properties.

Mr. Sangree is a nationally recognized expert on waterpark resorts and has visited most of the open waterpark resort properties in the United States and Canada.  He has completed more than 400 studies of waterparks resorts since 1999. Mr. Sangree was named one of Aquatics International Magazine’s “Power 25”. In its profile, Aquatics International named Mr. Sangree as one of the first consultants serving the waterpark resort industry and credited him with shaping some of the latest industry trends through his expertise and experience in the waterpark resort market. Mr. Sangree has appeared on Good Morning America and CNBC on special reports concerning resorts and waterparks. He can be reached via telephone at 216-228-7000 ext. 20 or via e-mail at dsangree@hladvisors.com. The author wishes to acknowledge Hollie Gibbs for her assistance with the article.