Before a developer or organization considers construction of a new indoor or outdoor waterpark resort and/or outdoor waterpark, the mortgage lender and investors generally require a feasibility study. A feasibility study is typically performed by an independent third-party consultant who specializes in analyzing the performance of waterpark and hotel projects. The purpose for performing the feasibility study is to determine if the proposed waterpark development is economically feasible. A proposed project is economically feasible if the value of the proposed project equals or exceeds the development costs when completed and operational. The feasibility study will analyze revenues, expenses, and net…
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You have your plans and reports in hand and are ready to start your indoor waterpark resort. Where does the money come from?
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Indoor waterpark resorts are a relatively new phenomenon in the United States and are spreading to new locations across the country. Many of the indoor waterpark resorts are achieving occupancy levels and average daily rates well in excess of hotels without indoor waterparks. The appraisal of an indoor waterpark resort has many similarities to the appraisal for a typical hotel property with some important differences in analysis and scope of the project. As an indoor waterpark resort is an entertainment based hospitality property, it has the potential to achieve substantially higher revenues than a typical hotel property although it also has additional risk inherent in its operation. This article will discuss methodology for preparing an appraisal on an indoor waterpark resort as well as financing for resorts in this difficult lending environment.
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A Developer’s Guide to New Ideas, Feasibility & Funding November 2010 – During the fourth quarter of 2010, it looked like the hotel and leisure industries were making an economic recovery in the USA and around the world. Hotel occupancies were up over last year, but hotel room rates continued to drop — indicating the road to recovery would be a long hard road. Museum and small attraction attendance was up but people were spending less money. Some major theme parks and regional outdoor waterparks reported gains in attendance, while others saw a decline. The road to a rapid economic…
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