Industry Outlook and Trends

1
Industry Outlook and Trends
David J. Sangree, MAI, CPA, ISHC President Hotel
Leisure Advisors, LLC 14805 Detroit
Avenue Suite 420 Cleveland, OH  44107 Phone
216-228-7000 Fax [phone] Email
dsangree_at_hladvisors.com Web www.hladvisors.com  
2
What is an indoor waterpark?

• Aquatic facility within or connected to lodging
• establishment
• Minimum of 10,000 square feet of indoor waterpark
  space
• Amenities such as slides, tubes, and a variety of
  
• water-play features

Industry Outlook and Trends Session
3
Major Discussion Topics of Two Sessions

• Outlooks and Trends Session
• Types of indoor waterparks
• Indoor waterpark growth
• For-sale facilities
• Trends in facilities
• Concerns
• Green indoor waterparks
• Presentation by Tiffany Woodward and Ericka
  Lewandowski of Wave Development
• Feasibility Session
• Components of feasibility analysis
• Demographic discussion
• Supply and Demand analysis
• Occupancy and average daily rate performance of
  indoor waterpark resorts
• Financial performance
• Financial statistics

Presentation by David J. Sangree, MAI, CPA, ISHC
4
Types of Indoor Waterparks
Presentation by David J. Sangree, MAI, CPA, ISHC
5
Why Build an Indoor Waterpark?

• Indoor waterparks are year-round destination
  resorts and are less affected by the ups and
  downs of a seasonal tourist location
• Indoor waterparks minimize weather-related
  vacation risks
• Water-based recreation appeals to a wide range of
  people
• An indoor waterpark can theme its property to
  make the resort more appealing
• There is increasing demand for short drive-to
  getaway vacations
• Many indoor waterparks are located close to their
  customer base
• Many indoor waterparks are located within an
  established family vacation market

Presentation by David J. Sangree, MAI, CPA, ISHC
6
Amenities and Location

• Type
• Franchised Vs. Independent
• Amenities
• Outdoor Waterpark - Themed Lobby - Fitness
  Center
• Kids Club - Dry Play Area - Gift Shop
• Spa - Arcade - Multiple F B Outlets
• Wider range of room types than a traditional
  hotel
• One and Two bedroom suites - Kids rooms with
  bunk beds
• Larger traditional rooms - Jacuzzi suites
• Fireplace rooms - Theme rooms.
• Location
• Tourist Destinations Vs. Urban

Presentation by David J. Sangree, MAI, CPA, ISHC
7
Indoor Waterpark Growth
Presentation by David J. Sangree, MAI, CPA, ISHC
8
Indoor Waterpark Growth
Presentation by David J. Sangree, MAI, CPA, ISHC
9
Indoor Waterpark Growth
Presentation by David J. Sangree, MAI, CPA, ISHC
10
Existing Supply
Presentation by David J. Sangree, MAI, CPA, ISHC
11
Proposals and Under Construction

•  

Presentation by David J. Sangree, MAI, CPA, ISHC
12
2006 Openings
Presentation by David J. Sangree, MAI, CPA, ISHC
13
2007 Openings
Presentation by David J. Sangree, MAI, CPA, ISHC
14
For Sale Facilities

• The 204-room Americana Conference Resort and Spa
  in Niagara Falls, Ontario, was listed for sale by
  CB Richard Ellis in September 2006.
• CB Richard Ellis listed for sale the 300-room
  Double JJ Resort in Rothbury, Michigan, which
  includes a 34,000 square foot indoor waterpark in
  July, 2007.
• Tundra Lodge Resort in Green Bay was listed for
  sale in June 2005 for 21 million or 130,435 per
  room by CBRE. The property was taken off the
  market. In 2006 the property was listed for sale
  with HREC for 17 million, and as of December
  2006 it was under contract for slightly over 15
  million. The property is again for sale.
• HREC listed for sale the 338-room Holiday Inn
  Fort Rapids Indoor Waterpark Resort in Columbus,
  Ohio in July, 2007. The property includes a
  45,000 square foot indoor waterpark. The
  property was to be sold at auction later in
  August 2007, but no appropriate offers came
  through.

Presentation by David J. Sangree, MAI, CPA, ISHC
15
For Sale Facilities

• In October 2005, Great Wolf Resorts announced the
  sale of the Great Wolf Lodge resorts in Wisconsin
  Dells and Sandusky to a joint venture that is 70
  owned by CNL and 30 owned by Great Wolf Resorts.
  The total sale price was 114,500,000 or 197,414
  per room.

Presentation by David J. Sangree, MAI, CPA, ISHC
16
Trends in Facilities

• Kalahari Resort in Sandusky, Ohio, is slated to
  open its 93,000 square foot indoor waterpark
  expansion in December, 2007 with the addition of
  288 condominium hotel keys to open shortly
  thereafter. The 50 million expansion will
  include an African-themed restaurant and bar and
  a transparent roofing system that will stream in
  sunlight.
• Marriott Hotels announced plans to partner with
  Nickelodeon to create a new chain called
  Nickelodeon Resorts by Marriott. By 2020,
  Marriott plans to open 20 such resorts worldwide
• A number of ski resorts are adding indoor
  waterparks, following the lead of Boyne
  Mountains Avalanche Bay project. These include
  the Silver Mountain resort in Kellogg, Idaho,
  Greek Peak ski resort in Cortland, New York
• CoCo Key Waterparks

Presentation by David J. Sangree, MAI, CPA, ISHC
17
Trends in Facilities

• The 414-room KeyLime Cove indoor waterpark resort
  is under construction in Gurnee, Illinois. It
  includes a 64,500 square foot indoor waterpark,
  Crazy Toucan bar grill, Andersons Ice Cream
  Eatery, kids craft room, 12,000 square feet of
  flexible meeting space, convenience store, retail
  shops, arcade, spa, and an exercise facility
• Three Bears Lodge is a 93 guest room full-service
  hotel attached to the indoor waterpark with a
  total of 178 villas open
• Chula Vista added 162 condominium units which are
  rentable as one-, two- and three-unit condo hotel
  units. It offers a 55,000 square foot indoor
  waterpark Lost Rios, 30,000 square foot smaller
  indoor waterpark, and the 120,000 square foot
  outdoor waterpark Adventure Lagoon

Presentation by David J. Sangree, MAI, CPA, ISHC
18
Trends in Facilities

• Wilderness Resort added the Glacier Canyon resort
  development which includes 224 luxury condominium
  units, a 25,000 square foot conference and
  wedding facility, and a large outdoor waterpark
  area.
• Bluegreen Corp purchased seven acres of land
  adjacent to Treasure Island to develop 75 two-
  and three-bedroom timeshare vacation unit

Presentation by David J. Sangree, MAI, CPA, ISHC
19
Concerns

• Availability of capital
• Cost of building an indoor waterpark resort
  increasing every year
• Oversupply in a few markets
• Need to upgrade rides and attractions
  periodically
• Could become the next Holidome

Presentation by David J. Sangree, MAI, CPA, ISHC
20
Future

• Market has not saturated. Plenty of opportunities
  still exists.
• Capital will continue to be the most important
  factor influencing the health and development of
  the indoor waterpark business. A few projects may
  get delayed due to the recent credit-crunch
• Strong success of properties due to popularity of
  water features and desire by families to spend
  time together
• Indoor waterparks will remain popular as they
  provide Weather Insurance and are open year
  round
• Indoor waterparks targeting older kids with new
  exciting rides (e.g. Flowrider) and arcade games.
  
• The market shows a trend towards newer and bigger
  resorts as smaller hotels with indoor waterparks
  achieve reduced premiums from their waterparks
• Green Indoor Waterparks

Presentation by David J. Sangree, MAI, CPA, ISHC
21
Green Indoor Waterparks

• Leadership in Energy and Environmental Design
  (LEED) Green Building Rating System
• Economic Benefits
• Reduce operating costs
• Enhance asset value and profits
• Optimize life-cycle economic performance
• Improve employee productivity and satisfaction
• Only Indoor Waterpark applied for LEED
  Certification - Proposed Hope Lake Lodge and
  Indoor Waterpark in Virgil, New York

Presentation by David J. Sangree, MAI, CPA, ISHC
22
Green Indoor Waterparks

• Potential Savings
• 30 of Energy Costs
• 35 of Carbon Costs
• 30-50 on Water Use Costs
• 50-90 of Waste Costs

Presentation by David J. Sangree, MAI, CPA, ISHC
23
Questions?
David J. Sangree, MAI, CPA, ISHC President Hotel
Leisure Advisors, LLC 14805 Detroit Avenue,
Suite 420 Cleveland, OH  44107 Phone
216-228-7000 Fax [phone] Email
dsangree_at_hladvisors.com Web www.hladvisors.com
Presentation by David J. Sangree, MAI, CPA, ISHC