There seems to be some concern about the occupancy rates (also here, here, and here) of a new downtown hotel connected to the Harrison Square project:
“The new hotel would have to change the hotel occupancy trend in the Fort Wayne area. Occupancy rates on an annual basis have not risen above 52 percent since 2001, and for the most part have remained between 47 and 51 percent, according to data from Smith Travel Research Inc. Those figures include hotels in and around the city.”
I thought it would be prudent to perform some preliminary research and due diligence for the waterpark idea. I found some excellent articles about the impact of waterpark hotels on overall Occupancy Rates and Average Daily Rates (ADR).
Here’s one from William L. Haralson & Associates, Inc., economic consultants for the waterpark industry:
The Hotel/Waterpark Resort as an Investment Opportunity
“Our research has shown that hotels with indoor waterparks consistently out-perform hotels without indoor waterparks. The best example of this comparison is found in the Wisconsin Dells, where the 18 properties with some type of indoor water features average 26 percentage points of occupancy more than the 44 properties without any type of indoor water features. In fact, the 18 properties with indoor water features account for 85 percent of room revenue compared to 15 percent for the 44 properties without such
features.”“…In addition to achieving higher occupancy rates, hotels/waterpark resorts also achieve higher ADR compared to properties without indoor water features. Again, using the Wisconsin Dells as an example, the 18 properties with indoor water features far out-performed the 44 properties without indoor water features. The extent of impact on ADR relating to indoor water features depends on the size and mix of entertainment components offered. Small indoor water parks with limited components may result in minimal impact on ADR, while larger indoor waterparks may generate as much as $25 per person per night. For this reason, the guest rooms associated with hotel/waterpark resorts should be designed to maximize capacity. In this regard, the best criterion is not room sales, but pillow sales.”
WLHA offers some other great articles on their website addressing the issues related to waterpark investment.
Here’s another article from Hotel Interactive which seems to corroborate WLHA’s findings:
Indoor Water Parks Create Occupancy Typhoon
“The Grand Rios has 45,000 square feet of water fun, which was incorporated into the $45 million renovation project that transformed an old Ramada Inn (with an ADR of about $70 and a 30% occupancy rate) into the Grand Rios (with an ADR of about $129 and an occupancy rate over 90%).”
“According to David Sangree, President of the hospitality consulting firm Hotel & Leisure Advisors, guests are willing to pay anywhere from $20 to $150 more per night for this amenity and that hotels with water parks achieve are getting anywhere between a five and 30 point occupancy bump over similar hotels without a water parks. “Indoor water parks will become a necessary amenity, particularly in seasonal resort communities for properties wanting to attract year-round demand,” Sangree predicted. “
David Merritt, Senior VP of Development for Marcus Hotels, which has two indoor water parks located in the Wisconsin area went on to add the following critical point:
“It’s crucial to make sure the property does not rely on the water park to fill its rooms year round. He said other amenities for business and leisure travelers, as well as area attractions are critical to help boost occupancy during the quiet times when school is in session. For example, Timber Ridge has restaurants, golf, skiing, horseback riding and more in the surrounding area. The Hilton Milwaukee is home to five ballrooms and 18 meeting rooms, which help buoy business year round.”
It would appear from this information that a Fort Wayne hotel connected to an indoor waterpark could expect occupancy rates in the range of 52% up to 81%.
