Waterpark Resort Business Plan: Begin with the Feasibility Study

The feasibility study is the first step in starting a new waterpark resort, and should be prepared before the business plan. Leisure Business Advisors LLC (LBA) specializes in conducting this study, which is generally required by financing institutions. The study provides market and financial analysis and projections that will be used in the developer's business plan.

The study also provides critical physical planning recommendations for the waterpark resort business plan. It is critical that design plans are in line with market needs and expected cash flow. These planning guidelines need to be in place before the construction and building can start. Designers, planners, and managers can all benefit from the guidance provided in the study.

As part of the feasibility study, LBA can work closely with you in preparing the initial image package that would assist designers in the planning stage of development that follows the feasibility stage. We could provide a walk-through description and 3D computer graphics conceptual images of your new waterpark resort seen through the eyes of a typical visitor. These would preliminarily suggest its planned "look and feel" in business financing and marketing presentations.

The following paragraphs outline the major tasks typically involved in conducting a feasibility study.

Task 1: Orientation Meeting

An initial meeting would be held to discuss the waterpark resort project in more detail and to see the prospective site if one has been chosen.

Task 2: Site and Area Evaluation

The site and local area would be evaluated to determine its effect on potential usage. Factors include:

  • Market proximity
  • Physical limitations or constraints
  • Access routes
  • Traffic patterns
  • Surrounding development
  • Potential complementary and competitive facilities

Task 3: Concept Description and Industry Trends

The waterpark resort concept would be described and industry trends discussed. Readers of the feasibility study may be unfamiliar with the concept and this section of the report provides an introduction before specific project-related issues are examined.

Task 4: Market Analysis

The market areas would be defined based on distance from the site. Demographic characteristics for the resident market would be analyzed to provide an indication of support. This would typically include:

  • Population growth
  • Age distribution
  • Income distribution

The tourist market would be defined and analyzed. Based on available information, this analysis would likely examine:

  • Current size
  • Historic growth
  • Other characteristics

Task 5: Evaluation of Comparable Facilities

Selected comparable waterpark resorts would be examined. Available reported information would be provided on individual characteristics, including:

  • Name and location
  • Physical description
  • Financial performance
  • Development costs

Task 6: Annual Usage

Potential annual usage for the proposed waterpark resort would be estimated for the first five years of operation based on a number of factors, including:

  • Planned components
  • Size of the available markets
  • Qualitative market characteristics
  • Market performance achieved by comparable resorts
  • Location and potential competition

Task 7: Physical Planning and Concept Development

LBA would make physical planning recommendations needed to service expected market demand. The specific parameters vary from one waterpark resort to another. Physical planning parameters may include:

  • Recommended types of activities
  • Recommended mix and sizing
  • Recommended visitor service space
  • Minimum land area or building space needed

Initial conceptual efforts may also be provided. These could include:

  • Functional layout diagram for the new waterpark resort
  • Narrative description of a typical visit from the perspective of a typical family
  • 3D computer graphics visualizations of selected activities

The final report could also include a video presenting the results of the feasibility study with a "fly-through" or "walk through" computer animation of part of the new waterpark resort.

Task 8: Financial Analysis

The financial analysis for the proposed resort would be based on the selected concept and potential usage. Financial estimates for the first five years of operations would include:

  • Revenues by category
  • Operating expenses
  • Operating profit or surplus
  • Return-on-investment for equity investors, if applicable

Task 9: Warranted and Typical Development Cost

LBA would determine the warranted development cost or investment based on potential profitability. This is the recommended maximum amount that should be spent to effectively develop the project and return a reasonable return-on-investment to equity investors. This warranted amount would be compared to the actual development costs for other comparable resorts. Relative size would be taken into consideration. This comparison would provide guidance as to whether the proposed waterpark resort could be developed for its warranted investment. If it can be, the project is considered financially feasible.

Past Resort Consulting Projects

John Gerner, LBA's managing director, has conducted feasibility studies for many resorts over the past 30+ years. These include:

Great Wolf Lodge Waterpark Resort (Greene County, New York USA)

Great Wolf Resorts is the world's largest chain of indoor water parks, and operates its family resorts under the "Great Wolf Lodge" brand. The resorts also offer specialty restaurants, arcades, spas, fitness rooms and children's activity areas. The first Great Wolf Lodge location opened in 1997 in Wisconsin Dells, Wisconsin. The chain has since added eleven additional locations, with more currently in development.

In 2012, Leisure Business Advisors LLC (LBA) conducted an independent consultant audit of the market feasibility study for a proposed Great Wolf Lodge in the Catskill Mountains tourist destination region. The client was the Greene County Department of Economic Development, Tourism and Planning. As part of this assignment, LBA conducted a series of financial stress tests on the anticipated payment revenues for the proposed infrastructure bonds. Click here to download this publicly available report.

Holiday Village Resort (Ulaanbaatar Area, Mongolia)

Leisure Business Advisors LLC (LBA) was retained by National Venture Capital to evaluate the market and financial feasibility of a proposed themed four-season holiday village resort hotel near Mongolia's capital city of Ulaanbaatar. The entire assignment involved evaluating the concept, analyzing the market, estimating market potential, and gauging financial performance.

Wisp Resort Expansion (McHenry, Maryland USA)

The Wisp Resort is a popular tourist destination that has been rated as one of the top ski resorts in the Mid-Atlantic region. It is a 2,700-acre planned real estate development, with government approvals for approximately 2,500 residential units (townhomes, condominiums, and single family homes).

The Wisp Resort Hotel & Conference Center is located at the base of the mountain.  The seven-story hotel includes 102 suites & 67 standard rooms. Since 2001, the entire resort has undergone more than $30 million in renovations and additions.  Future plans include a mountaintop village, retail shops, restaurants, and additional skier services.

The resort community is considered a four-season market.  Adjacent is Deep Creek Lake, the largest inland lake in Maryland, with more than 65 miles of shoreline.

As a subcontractor to Norton Consulting, Leisure Business Advisors LLC (LBA) analyzed future development options and prepared market share projections for expanding the Wisp Resort in 2008. The client was Signal Hill Capital Group LLC on behalf of Wisp Resort Development, Inc.

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Leisure Business Advisors LLC
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Richmond, VA  23223  USA

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