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U.S and Canada Waterpark and Resort Trends in 2020 | By David J. Sangree

9 April 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

At the beginning of 2020, the continuing trend of two decades of growth was expected in the waterpark industry. Major projects will open throughout the United States in both the indoor and outdoor waterpark categories totaling over $1 billion in investment in 2020. Fourteen new standalone waterparks and one resort with outdoor waterpark are anticipated to open. The indoor segment will total square feet of new waterpark space in 17 properties. However, the recent outbreak of the COVID-19 pandemic has thrown the industry into uncertainty in 2020. This article reflects the projected growth for the waterpark industry as it stood before the pandemic began. Much of this growth may change based upon the unfortunate effects of quarantines and social distancing requirements as the world grapples with the containment. The article does not reflect the possible postponements or closures that have or may occur in the industry based on the current crisis.

This year will see four top-tier indoor and outdoor waterpark openings including:

  1. 255,000-square-foot DreamWorks Waterpark at American Dream Mall in Rutherford, New Jersey (delayed from 2019)
  2. 500-room Great Wolf Lodge with a 95,000-square-foot indoor waterpark in Manteca, California
  3. 975-room Kalahari Resort with a 223,000-square-foot indoor waterpark in Round Rock, Texas
  4. 50-acre Soaky Mountain Waterpark in Sevierville, Tennessee

2019 WATERPARK STANDINGS FOR U.S. AND CANADA
As of February 2020, the United States and Canada had a total of 1,175 waterparks. Twenty-six of those properties opened in 2019. More than half of these openings were in the standalone outdoor segment (the most popular waterpark segment), with four new private facilities and 10 new municipal facilities. Eight openings contributed to the indoor supply, and four resorts opened new outdoor waterparks. The following bullets breakdown the numbers regionally:

The following chart shows the breakdown of waterpark properties by type:

U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

REVIEW OF 2019 NEW OPENINGS

Indoor Waterpark Openings: In 2019, eight indoor waterpark additions or expansions added 335,500 square feet of indoor waterpark space.

U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

The number of new rooms and indoor waterpark square feet in 2019 was lower than achieved in 2018. The larger projects include two privately developed indoor waterpark resorts and one municipal standalone indoor waterpark recreation center:

Outdoor Waterpark Openings: Fourteen new standalone outdoor waterparks opened in 2019.

U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

Though all meet H&LA's definition of having at least three waterslides, these new facilities vary substantially in size and scope. Most of the 2019 openings were municipal

facilities, and all but two were in the South or Midwest. Larger outdoor waterpark facilities that opened in 2019 included the following:

Resorts with Outdoor Waterparks Openings: Resorts with outdoor waterparks had the smallest number of additions in 2019, which is a trend likely to continue in 2020.

U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

Four hotels and resorts debuted outdoor waterparks. Florida features the two most prominent additions in this segment of properties that are attached to resorts but are also open to the public for day pass admission. They are profiled in the following bullets:

All Openings: The following map highlights the locations of the 2019 indoor and outdoor waterpark openings inclusive of resorts and standalone properties.

U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

OTHER CHANGES IN 2019

One of the more substantial changes in the waterpark industry in 2019 was the change made by Great Wolf Resorts to their day pass program. Previously, the company advertised and marketed that its resorts did not allow day passes as the waterparks were exclusive to resort guests. Starting in 2019, the company changed its policy and began selling day passes at many of its properties at a price of $50 or more. However, for its newer Arizona and California properties, they did not offer day passes initially. Their marketing strategy was revised to say that the resorts were only selling a limited number of day passes.

Blackstone Real Estate Partners acquired a 65% controlling interest in Great Wolf Resorts, Inc. in October 2019. Great Wolf had 18 resorts around the country at the time of purchase. As part of the transaction, Blackstone and Centerbridge formed a new $2.9 billion joint venture to own the company.

Three outdoor waterparks closed in 2019 including Wet 'n Wild Palm Springs, California; Schlitterbahn Waterpark in Kansas City, Kansas; and Water Wizz in Westerly, Rhode Island. The Palm Springs site is being redeveloped into the Palm Springs Surf Club, which anticipates opening in 2020.

PROJECTIONS FOR 2020
For 2020, we will see growth across all segments of the waterpark market with openings of 28 facilities. We also anticipate expansions of more than 33 existing facilities. Regionally, the South leads the U.S. with 15 projected openings, with the majority of these in Florida or Texas. The Midwest should see six openings, the West five, and the Northeast two. As of this writing, no major openings or expansions are anticipated for Canada. The following map highlights the locations of the properties.

U.S and Canada Waterpark and Resort Trends in 2020
U.S and Canada Waterpark and Resort Trends in 2020

Indoor Waterparks: With projections of 840,000 square feet of new indoor waterpark space and nearly 1,800 new rooms, 2020 will be a year of significant growth in this market segment. Two large indoor waterpark resorts will open in California and Texas along with smaller hotel additions to waterparks in Kansas and South Dakota. The largest standalone indoor waterpark in North America will finally open in New Jersey after numerous delays. There are also a number of municipalities adding standalone indoor waterparks as parts of their recreation centers. The following are highlights of the larger projects.

Outdoor Waterparks: Growth in the outdoor segment will continue with 14 new standalone waterparks and one resort with outdoor waterpark anticipated. Larger outdoor waterpark developments in 2020 include the following:

CHALLENGES FOR 2020
Operators of existing waterparks and attractions need to continually reinvest in their properties in order to keep them competitive with new waterparks and attractions opening up throughout the United States and internationally. Due to declining attendance and net income, Indiana Beach Amusement and Waterpark Resort in Northwest Indiana and Fantasy Island Waterpark in Grand Island, New York have closed for the 2020 season and beyond. Apex Parks, the owner of Indiana Beach, has also closed two additional attractions.

As of the writing of this article, there are increasing financial risks to the waterpark and travel industries as a result of the COVID-19 virus. Impact has occurred to waterparks globally forcing waterpark closures due to restrictive measures put in place by respective governments. Impact on indoor and outdoor waterparks in the United States will depend upon the extent to which the virus spreads and length of closures. Many waterparks have already closed their operations until May, and it remains uncertain when operations will resume for many of them. While this has mostly affected indoor waterpark resort operations, it also comes at a time when outdoor waterparks are readying to open for the 2020 summer season. With the amount of uncertainty surrounding the outbreak, it is difficult to predict the outcome. H&LA projects the pandemic will be resolved in 2020, and that operations will start to return to normal in 2021 and 2022.

CONCLUSION
Waterpark development continues in select markets in the United States and Canada with development costs for both indoor and outdoor waterparks increasing due to higher construction and labor costs affecting a wide range of real estate development. The new DreamWorks indoor waterpark at the Meadowlands in New Jersey which was scheduled

to open in 2019, has opened in March 2020. This major attraction, along with the new Kalahari Resort in Round Rock, Texas, will raise the bar on new waterpark developments as they become two of the largest indoor facilities in the world. Both projects received significant incentives from their respective municipalities and state governments, which boosted their financial viability.

Numerous outdoor waterpark facilities are being added, primarily at municipal facilities with a smaller number of privately developed venues. The Perfect Day at CocoCay in the Bahamas has the most elaborate facilities for cruise ship passengers as Royal Caribbean has found guest satisfaction and revenues to be higher for its new waterpark experience than previous cruise options. The international waterpark industry continues to expand its attraction mix offerings.

The year ahead will bring three major indoor waterpark resort openings and one major outdoor waterpark opening, in addition to a number of smaller openings. As the industry focuses on bigger, more amenity-rich properties, it will be interesting to see how smaller properties and markets are able to adapt. Today's savvy customers will have an unprecedented number of choices making it vital for all properties, no matter their size, to adopt proactive strategies on marketing and facility improvements. The COVID-19 has created widespread uncertainty in the industry, and its effect will be felt throughout the entire year and perhaps beyond as parks close, delay openings, or have truncated operating seasons. As always, H&LA continues to stay abreast of all the new additions, changes, and trends happening in this dynamic industry.

Contact

Heidi Banak
Phone: +1 216 228 7000 ext 14
Email: hbanak@hladvisors.com

Organization

Hotel & Leisure Advisors
www.hladvisors.com
14805 Detroit Avenue | Suite 420
USA - Cleveland, OH 44107-3921
Phone: 216-228-7000
Fax: 216-228-7320
Email: dsangree@hladvisors.com

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