NEWTON, MA – During 2007, thirty-three hotels with indoor waterparks opened, including new additions and expansion projects, bringing the total to 169 hotels with 28,888 rooms and 4,132,469 square feet of indoor waterpark space. The room supply at waterpark hotels grew 20.9% in 2007 compared to room supply growth of 1.4% at ordinary hotels.

Eighty-three new hotel waterpark additions and expansion projects are under construction or expected to break ground during 2008. A total of 55 hotel indoor waterparks with 14,615 rooms and 2,287,840 square feet of waterpark are expected to open by year end 2008. Another 33 properties already are scheduled to break ground in 2008 with opening dates in 2009 and 2010.

Hotel Waterpark Resorts That Opened in 2007

Of the 33 properties that opened in 2007, a few have special features worth mentioning:

Westgate Resorts, a division of Central Florida Investments, opened a 60,000 sf indoor waterpark, Wild Bear Falls, at their Westgate Smokey Mountain Timeshare Resort in Gatlinburg TN. Wild Bear Falls features a state of the art retractable roof and showcases the artistic creations of local artist W. R. Fannin. Other features include a lazy river, body slide, tube slide, zero entry pool, toddler play area and a treehouse with tipping water bucket. Westgate has timeshare properties in Las Vegas, Orlando, Branson, Williamsburg, Mesa, Park City, Miami and Myrtle Beach. You can reach company president, David Siegel, at 877-584-0012.

Owners of the Mt Olympus Water and Theme Park in Wisconsin Dells WI purchased the neighboring Treasure Island Resort and four other properties that have been repositioned as a single Greek-themed entertainment complex. The 156-acre resort features 358 rooms, the 65,000 sf Bay of Dreams indoor waterpark, numerous outdoor water facilities and one of the world’s largest surf pools called Poseidon’s Rage. The $7 million surf pool is similar to Disney World’s 2.7 million gallon Typhoon Lagoon, the largest in the country. However, Poseidon’s Rage, the second largest at 1.5 million gallons, makes a wave that can be adjusted from 5 feet to 9 feet high. To make the waves, manufacturer Whitewater West explained that eight chambers are filled with a combined 160,000 gallons of water. The waves are created when doors on the chambers release a surge of water. “Poseidon’s Rage is the closest thing to ocean surfing and allows surfers to use their own surf boards,” according to the sole proprietors of Mt Olympus, Nick and Eva Laskaris.

Harrah’s Atlantic City Casino Hotel opened The Pool, part of a $550 million expansion featuring a walk-up bar under a 90 foot high glass dome, which provides UV protection. The 172,900 sf water entertainment complex features an Olympic-size indoor adult pool amid a tropical setting, 12 cabanas and 7 hot tubs. Not exactly an indoor waterpark, it is one of the largest indoor leisure pools in the country. “It really turned out beautifully,” according to Gary Loveman, ceo of Harrah’s Entertainment Inc of Las Vegas.

Wave Development LLC of Milwaukee purchased the 367-room Sheraton Ferncroft in Danvers MA, completed a major renovation and opened a new 65,000 sf indoor waterpark called Coco Key in May 2007. Coco Key cost $20 million and features 4 waterslides that range from 286 to 353 feet in length, 320-foot long rapid river and a tipping water bucket. The company partners with Horizon Construction Group of Verona WI and Sage Hospitality Resources of Denver CO for construction and management.

In November 2007, Wave Development opened a 50,000 sf Coco Key waterpark resort at the 357-room Sheraton in Cincinnati-Sharonville OH, a hotel it acquired and renovated. The company has a strategy of acquiring under-performing hotels in good markets, renovating them and constructing its own brand of indoor waterparks to balance the business-leisure customer mix and achieve higher occupancies and revenues. Wave Development LLC has hotel waterparks in Chicago-Arlington Heights IL, Rockford IL, Newark OH, Danvers MA, Omaha NE and Cincinnati-Sharonville OH. New developments are underway in Kansas City MO, Mt Laurel NJ, Waterbury CT and Fitchburg MA. The company is expected to surpass industry leader Great Wolf Resorts in terms of the number of properties owned/managed. You can reach the partners, Mark Flaherty, Ed Carow and Chuck Heath, at 608-848-4500.

Chula Vista Resort owner Mike Kaminski embarked on a 4-year $200 million expansion plan that started in 2005. When the expansion is completed in 2009, Chula Vista Resort in Wisconsin Dells WI will have about 1000 condos and hotel rooms, 100,000 sf of waterpark and 200,000 sf of convention space. In 2007, Kaminski opened 150 new condos and an 80,000 sf sports dome that can handle conventions and major sporting events. Future plans call for a 150,000 sf conference center, a second 80,000 sf sports dome and major additions to his existing 80,000 sf indoor waterpark. Chula Vista is now positioned among the top three largest hotel waterpark resorts in the nation along with Kalahari Resort and Wilderness Hotel & Golf Resort. You can reach Mike at 608-254-8366.

In December 2007, Great Wolf Resorts Inc opened its 402-room Great Wolf Lodge and 80,000 sf indoor waterpark in Grapevine TX. Called Bear Track Landing, the indoor waterpark features 6 pools, 9 waterslides, a 12-level climbing structure, a 1000-gallon tipping water bucket and an enclosed 6-story Howlin Tornado extreme funnel ride. For the first time, Great Wolf will offer its teenage guest a dedicated tech center with a Tech Jockey concierge to help with internet stations, karaoke staging, movies and musical entertainment. The resort also offers an 84,000 sf outdoor waterpark. Great Wolf Resorts Inc will open its next property at Grand Mound WA in March 2008 in partnership with the Chehalis Tribe of Indians. Future projects have been announced for Charlotte NC, Bloomington MN, Mashantucket CT and Lake Lanier GA. Talk to John Emery, ceo of Great Wolf Resorts Inc, at 608-251-6400.

In December 2007, Todd Nelson more than doubled the size of his Kalahari Resort in Sandusky OH --- making it the nation’s largest hotel indoor waterpark. Nelson added 288 new rooms, bringing the total to 884 and making it the largest hotel in Ohio. The indoor waterpark more than doubled in size from 80,000 sf to its current 173,000 sf. Features include 12,000 sf wave pool, a 4-lane Mat Racer slide where racers can compete with fellow racers, a bowl funnel slide and a second FlowRider, where surfers can ride a sheet of water flowing under them. Kalahari Resort Sandusky OH is the site of a Developer’s Workshop, called Developing & Financing Hotel Waterpark Resorts, scheduled for February 28 & 29, 2008. To register, go to www.hotelwaterparkworkshop.com. Kalahari owner Todd Nelson recently announced the construction of his third waterpark resort in Fredericksburg VA. You can reach Todd at 608-254-3750.

Here is a completed list of all hotel indoor waterparks and resorts that opened during 2007, along with locations, room counts and waterpark size:

USA Lodging Industry Performance Was Good in 2007

Year 2007 hotel industry occupancy was 63.2%, down 0.2 percent versus 2006. However, average room rates increased 5.9 percent to $103.64, and revenue per available room (RevPAR) gained 5.7% to $65.50, according to Mark Lommano, president of Smith Travel Research. “The US lodging industry turned in another good performance in 2007. We expect another good year in 2008. Room supply growth will reach the long term trend number of just over 2 percent. Demand (rooms sold) growth should continue but will likely be lower than supply growth, resulting in declining occupancy,” said Lommano. Average room rate growth will totally drive RevPAR gains of 4.0 percent to 4.5 percent in 2008.

PriceWaterhouseCoopers expects that the US hotel occupancy will drop only slightly to 62.9% in 2008 compared to 63.2% in 2007, according to PWC’s principal Bjorn Hanson. This is “within a few tenths of an occupancy point of the highest occupancies in 10 years,” he said. PWC expects 2008 supply growth will be greatest in the upscale hotel tier.

During 2007, the cost of materials rose between 3 percent and 5 percent, pushed by cement and steel, while increases in copper also are expected, according to a June 4th article in Hotel & Motel Management. The increased prices on copper as well as freight increased about 15 percent for hotel chains in the northeastern region. Higher fuel prices affected both the manufacturing and delivery of goods, such as hotel furniture, fixtures and equipment.

What’s Ahead for 2008?

While there are signs of a slowing economy --- due to higher fuel costs, higher construction costs and a residential mortgage crisis that is affecting hotel lending --- there are also positive signs for the hotel industry, especial regional resorts with indoor waterparks.

A weaker US dollar attracts hundreds of thousands of international visitors to the USA, which is good for the hotel, travel and attractions industry. The merging of lodging, recreation and entertainment concepts are making drive-to regional resorts very competitive with the fly-to national resort destinations. And hotels with indoor waterparks typically out-perform the hotel industry in terms of higher occupancy, higher room rates and higher revenues.

Hotel Construction Is Increasing

Smith Travel Research reports 211,000 hotel rooms in the development pipeline in December 2007 compared to 156,000 in December 2006 --- a 35.5% increase.

The 2008 Lodging Industry Construction Pipeline stood at 5,438 projects and 718,387 hotel rooms at the end of 2007 --- representing a 36% increase over last year, according to Patrick Ford, president of Lodging Econometrics of Portsmouth NH. New hotel openings were increasing in 2007 with a growth rate of 2.2%. New hotel supply growth is forecast at 2.8% for 2008 and 3.4% for 2009 taking into account anticipated market conditions. However, “2009 could decline slightly if economic and lending conditions worsen more than expected,” says Ford.

Will Money Be Available for Hotel Lending?

At America’s Lodging Investment Summit (ALIS) a few days ago, 3000 attendees met to discuss future hotel deals. Jubilation faded, but most insiders felt that while some hotels would get financed, others would find it more difficult --- primarily due to the negative news of home foreclosures spilling over to hotel lending. Most experts are sitting on the fence regarding the economy in 2008, but say that hotel room rates will remain strong throughout the year. Upsets in the financial markets usually do not cause a dip in the hotel industry until six months later, that is, even if one occurs. Developers may experience a longer wait in 2008, but things will be fine in 2009.

For years, leisure travelers and families with kids have sustained the hotel industry, while the business traveler segment was up and down. Consumers represent 2/3rds of the American economy, and history has shown that families continue to getaway on weekends and mini-vacations --- even during economic downturns --- so recreational regional resorts are expected to do well. Hotel waterpark resort developers will continue to analyze markets and determine economic feasibility. And while it may take a little longer to find the money, the best deals will get financed.

Here is a list of hotel waterpark resort projects that are already under construction and expected to open during 2008.

What’s Ahead for 2009 & 2010?

Here is a list of hotel waterpark resort projects that are under construction or expected to break ground during 2008 and scheduled to open during 2009 and 2010. Realistically, not all of these projects will get funded.

What’s the future?

In the long term, here are our predictions about the future of hotel waterpark resorts:

• Hotel waterpark resorts are not a fad.
• Hotels with indoor waterparks will continue to grow faster than the hotel industry.
• Hotel waterpark resorts under construction will continue to rise each year.
• Indoor waterparks will increase hotel occupancy, increase room rates and increase room revenues over typical hotels without indoor waterparks.
• Resorts are excellent candidates for indoor waterparks.
• Recreational locations with interstate highway access within 200 miles of a major metro area are excellent targets for hotel waterpark development.
• Ski resorts will continue to be prime candidates for indoor waterpark development.
• The first hotel with an indoor waterpark to open in a new market will become first choice among leisure travelers.
• Almost all major markets will attract a hotel waterpark developer in the next few years.
• Almost all future hotel waterpark resorts will be designed as indoor-outdoor combinations.
• Every hotel owner and developer will DO SOMETHING with water.

In the short term, hotel construction will increase during 2008 causing occupancies to soften slightly, but hotel room rates and revenues per available room (RevPAR) will remain strong. Negative news from residential foreclosures may spill over to hotel lending. It may take longer to find the money, but the best deals will get financed.

Copyright 2008 Questex Media Group, Inc. All rights reserved. From http://www.hotelmotel.com. By Jeff Coy and Bill Haralson.
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