FEATURE STORY
Four New Markets
by Dan Martin
Spring 2008
Additional demographics that may fit into the new waterpark hotel business model.
Young families that can afford $200 a night are still likely to be your most profitable waterpark market because they’ll pay the premium ADR for waterpark access. But remember, there must be enough of them to make the waterpark worth it. Here’s the short course on why and how the four other potential demographics may fit into the new waterpark hotel business model.

1 Business travelers. Business travelers are a great complement to families. Throughout the year they come during the week, when families don’t. The overlap comes during spring break and summer, when business and waterpark patrons both show up on weekdays.

To attract this crowd, keep in mind that business travelers like hotels with standard brands such as Marriott, Sheraton, Hilton, Holiday Inn and Hyatt. These brands offer a predictable product at a specific standard for business. So you’ll be more likely to attract business travelers if you have a brand affiliation, which comes with standards, fees and discipline in return for the referrals from the reservation system. A brand affiliation also may help with financing because lenders understand that a flow of business comes with the better brand affiliations.

Business travelers also tend to be drawn to a specific level of accommodation and, looking ahead, you may want to think more about this mix. Some may want an upscale room with lots of amenities such as restaurants and meeting rooms, while others may just need a clean room and a workspace.

Some waterpark hotels already have rooms that look like budget hotel rooms, while others are clearly four-star. If your property is to appeal beyond the family waterpark market segment, it needs to have rooms and amenities that fit your new target. For example, if you’re after people who normally frequent lodgings similar to a Hampton Inn, you’ll want your rooms to look like those of the Hampton Inn. If you want to go after a more upscale Hilton crowd (from the same brand family as Hampton), your property needs to look like a Hilton on the inside.

One last note of caution in catering to the business crowd: For business travelers and meeting patrons (described later), it’ll be important to keep the bathing and business suits separate, but don’t let that concern you. It’s a solvable design issue.

2 Extended Stay Patrons. Two specific business hotel categories, extended stay and all-suite hotels, offer ideal accommodations for waterpark patrons. But extended stay properties typically have minimal services and many of the patrons stay over weekends, which is family market prime time.

Feasibility studies provide approaches to quantifying demand from this group based on the number and types of nearby businesses. A look at existing hotel capacity and the positioning of existing competitors will help you decide if there’s a piece of this market for you.

3 Meeting facility users. Like other business travelers, these patrons have similar patterns of weekday use. If your meeting space is not in use on many weekends, it can become event space for weddings, black tie dinners and other events. While these patrons may not pay top dollar for rooms, some clever couples (or clever marketers) may make the waterpark part of the event — a kind of destination wedding without the flight.

To understand whether this is a viable option for you, models exist that can help quantify demands for meeting and private event spaces while projecting the room night business they’ll generate. A survey of competing facilities and their utilization can help determine the state of the market.

4 Leisure guests. These patrons are more diverse than business travelers. If you’re in a metro area, especially an older Northern city, there are likely to be many travelers coming to town to visit friends and relatives — often called VFR tourism (short for visiting friends and/or relations).

If these guests are young families, clearly a waterpark hotel would be a great fit, particularly because few hotels really target young families. Adult amenities such as good restaurants, free breakfasts and spas will help attract adult-only traveling parties.

Analyses of local tourism statistics can help you determine the size of this market, while a survey of the success and quality of local competition will help you determine a likely market capture.




Dan Martin is a vice president of Economic Research Associates, handling waterparks and waterpark resorts.



MORE INFO
Seeing the Future
The waterpark resort business model is changing. Here’s how to prepare now to reap future rewards.

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