Funworld June 2010

If You Build It, Will They Come?

WHAT THE INDUSTRY HAS LEARNED ABOUT HOTEL-WATERPARK OPERATIONS

by Marion Hixon

The hotel-waterpark trend exploded in the early 2000s, with both midsize properties and destination resorts adding waterparks to their properties. As the industry learned the differences between standalone waterparks and waterpark resorts, there were both successes and struggles.

Now, after a decade of transitioning from a new trend to established industry segment, hotel-waterpark operators and consultants are taking a step back and examining the results. Here they share with FUNWORLD the best practices learned through experience.

Feasibility Study
One of the most valuable tools an investor or operator can use before embarking on a hotel-waterpark is a feasibility study. “Room rates and occupancy levels of the existing hotel are key things to consider,” says David Sangree, president of Hotel & Leisure Advisors (www.hladvisors.com), a hospitality consulting firm. Sangree says if the existing hotel is doing well, adding a waterpark may only improve conditions. However, if hotel business is poor, a new waterpark could split the interest of the current clientele, rather than attracting new customers.

“Also, operators should look at how many family households exist in their region and at what income level,” says Sangree, noting residents or tourists with enough expendable income are needed to make the park successful.

Interest from local residents can be an asset to a hotelwaterpark, especially during its early stages when word-ofmouth marketing is vital. One waterpark project whose development garnered significant interest over the past four years—and opened its doors in March—is Radisson Hotel & Water Park Albuquerque (www.waterparknewmexico.com).

“We’re very fortunate in that we expect to be successful right off the bat, even though we’re not opening in peak season,” says Arthur Cooper, director of sales and marketing at the hotel-waterpark. The project has acquired an e-mail list of more than 3,000 subscribers interested in the attraction’s progress; Cooper attributes much of this intrigue to an eager group of New Mexicans. “We’re unique to town, and people have been watching the waterpark’s construction for the last three years—and heard about it since before then,” he says.

If locals don’t fill the rooms in the Radisson during its first season, management is confident tourists will, thanks largely to its location on Interstate-40, the major east-west highway going through Albuquerque. “If you’re going anywhere in the Southwest to visit people or see the Grand Canyon, you’re probably going to pass us along the way,” Cooper says. It’s also important to note there are no other hotel-waterparks in the direct vicinity of the Radisson.

“If you’re planning a waterpark at a hotel, make sure you do your due diligence concerning location,” Cooper says. “Some people have an ‘if you build it, they will come’ mentality, but that’s not always best when investing $18-20 million into a structure. Make sure your overall market, city, and state location are a good match.”

Understanding the demographics and interests of potential consumers is also necessary in planning marketing tactics. The Water Park of America (www.waterparkofamerica.com), connected to the Radisson Hotel Bloomington in Minnesota, attracts more than just the typical overnight guest. Guests from nearby traditional hotels, school groups, and even local residents visit the park as well—a task made easier by the city’s rail system. “Everyone is a target!” says Angela Reed, director of sales and marketing. The facility’s advertising campaigns range from the traditional hotel sales— RFPs (request for proposals), consortia programs, and GDS (global distribution system) marketing— to entertainment and direct and social marketing campaigns, like coupons, e-mail blasts, TV, radio, and copartnerships. “The best part of my job is working with a variety of consumers,” she says. “One day, I am having dinner with a major corporate executive, and the next day I am scheduling a mascot for a community fair.”

Big or Small—Make Your Call
When incorporating a waterpark at a hotel, investors and operators should decide if they want the attraction to be an added amenity to a hotel in an already competitive area, or a destination resort—where families come solely to spend the entire weekend at the facility. Both can be successful.

“Adding a waterpark at a smaller hotel in a vacation destination city gives the hotel an advantage,” says Sangree, highlighting the Comfort Inn’s Splash Harbor waterpark in Bellville, Ohio (www.splashharbor.com). “The waterpark helps business and is sometimes the reason people choose this hotel over others; whereas, some of the larger facilities lure people in for the whole weekend, solely based on their waterpark.”

“With the big resort destinations, you go big or go home as far as the waterpark’s concerned,” says Daryl Matzke, a project manager at Ramaker and Associates (www.ramaker.com), a consulting engineer firm specializing in hotel-waterparks. Facilities in high-tourism cities—like Chicago, Minneapolis, or Indianapolis—don’t have to be as large. “If you’re already going to Indy because of a basketball tournament or a swimming or racing event and you have a young family, you’ll choose the hotel with a waterpark over one without.”

Heads in Beds
As with any attraction, having a solid knowledge of the customer is paramount—and this is where hotel-waterparks differ greatly from standalone parks. Waterparks in hotels attract a much broader clientele regarding age and the reason they visit. So strategy is important when deciding how to tackle a changing customer base.

“Many of the hotels we’ve worked with target corporate guests during the week and families on the weekends,” says Sangree.

Matzke says many hotels have been capitalizing on nearby conference facilities and through them, building up a diverse clientele—although business professionals are the ones filling the rooms during the week, a hotel with a waterpark gives them the option to bring family members along for the weekend.

“The goal is to have heads in beds throughout the week, not just on weekdays or weekends,” Matzke says. “The way to do this is through diverse clientele and building up weekend business.”

Integrating a waterpark into a hotel may bring in additional customers and enhance the facility’s appeal, but owners and operators should prepare themselves for the inevitable effect it will have on hotel business in the meantime. More weekend customers mean a higher demand for food, clean rooms, and possibly more staffers. “You go from having 1.4 people in your hotel rooms per night to having 4 to 5 on the weekends—and that’s great, but there’s definitely an impact,” says Cooper at the Radisson property, which increased its housekeeping staff and added a food and beverage location with the opening of the waterpark. “If you have 150 rooms with four people in each of them, you’ll have 600 people who want breakfast in the morning.”

Also integral to the success of an on-site waterpark is putting just as much effort into enhancing the hotel side of the attraction. “The ownership at Radisson did renovations to the hotel at the same time as putting the waterpark in, and we continue to improve the products and services to make it an attractive match,” Cooper says.

Overnight Guests vs. Day Passes
After buzz spreads about a waterpark, local residents may want to visit the facility for pleasure. Radisson Hotel Albuquerque Waterpark has found its regional clientele has a vested interest in the waterpark’s success. The hotel cannot currently offer a day pass to locals due to a state zoning law, for which they’re currently seeking a variance. “It was our original intent that we would sell day-pass packages that included a private room to change in and leave your belongings for several hours,” says Cooper. “We invited locals to our soft opening, and they all enjoyed the waterpark all day but returned to their rooms when it closed, changed clothes, and were home by 10 p.m.,” Cooper says.

Currently the majority of hotel-waterparks don’t offer day passes for local visitors, only allowing park access to overnight guests at the hotel, and research conducted by Hotel & Leisure Advisors shows resorts that don’t allow outsider day passes are more profitable. “In my mind, a waterpark resort is almost better off not offering the local rate,” says Sangree. “Then if the locals want to stay overnight, they have to buy a hotel room.”

However, Sangree adds all these factors are dependent on location. Certain hotels, like Minneapolis/St. Paul’s Radisson, which houses the Water Park of America, profit from offering day passes because their visiting tourists are higher than most facilities.

“The Water Park of America has the luxury of proximity to the Twin Cities and the Mall of America,” says Reed, adding that day and half-day passes have been a huge success in overall revenue generation for the property. “By managing online ticketing and day-pass sales, the hotel has been able to accommodate the local residents as well as function as a traditional indoor hotel-waterpark.”

Attractions and Amenities
Working with a hotel-waterpark with more limited space than a standalone park, operators must be efficient in their attraction selection. It’s all about choices—and the more variety, the better. One surefire crowd pleaser is a raft slide, which Ramaker’s Matzke recommends because it accomplishes two key objectives—shared experience and family time.

More important than large, expensive features, however, is how well a ride suits the waterpark’s theme, image, budget, and clientele. Matzke says when targeting mostly younger children, operators need to focus on less-aggressive features like wading pools, lazy rivers, splash pads, or openflume slides that are less likely to be scary. “The inner-tube rides are some of the most accommodating, because parents can go down them easily with 2- or 3-year-olds,” he says. “We also want to get the facility the best value for their money. The AquaLoop (by WhiteWater West) is a more expensive slide, but Jay Peak Resort in Vermont wanted an iconic piece in their waterpark, and thrill rides to match their mountain mentality and their risk-taking clientele.”

For a well-rounded hotel-waterpark, theming and amenities are what truly grab guests’ attention. “We’ve worked very hard to provide other things for families to do and tie in the regional Southwest theme,” says Cooper at the Radisson Albuquerque Hotel Waterpark. The facility offers an arcade; Tin Works, a craft workshop where customers make and paint their own tin; a make-your-own-cuddly-critter workshop; and several restaurants, including the locally known Telly’s Deli. To attract older kids and teens, the waterpark reflects a “kids night club” vibe, complemented by the daily video screens and color-changing lights timed to music played by a live, in-park DJ.

Wanting to offer an original theme and grow its weekend clientele, the Holiday Inn in Maple Grove, Minnesota (www.venetianwaterpark.com), got creative and hired a theater set designer to maximize its smaller waterpark area. The designer created a three-dimensional feel to the Venicethemed attraction, which includes two water slides, a kids’ activity pool, and party rooms for birthdays and family reunions. Ramaker concealed the waterpark’s ductwork with a ceiling featuring twinkling lights to mimic stars in the Venetian sky. “You don’t always have to put the biggest and baddest features in there to be a success,” Matzke says. “You just have to be creative and make sure you can envision 6- year-olds playing there.”

Contact Departments Editor Marion Hixon at mhixon@IAAPA.org.