There’s been a lot of interest in waterparks in the past couple of years. Both Six Flags and Parques Reunidos have been busy in the sector and Europa Park is set to open their Rulantica waterpark expansion later this year. So why is there so much interest in this attraction type and how does it fit into the rest of the visitor attractions sector?
The numbers
To start you need to take a look at the numbers. Waterparks are cheaper to develop than theme parks. Six Flags invested less than US$20m to refurbish a waterpark in Oaxtepec, Mexico, that had been closed for a few years. Contrast this to the US$700m budget for the planned Six Flags theme park in Dubai (currently on hold due to financial issues), or the US$50m that Six Flags invested in Walibi Holland when they rebranded the park in 2000 and the difference is obvious.
Another important factor is that waterparks can generate higher operating profits than theme parks. While a strong performing theme park may deliver a 30-40 per cent operating profit margin on an annual basis, a strong waterpark can generate profits of 50 per cent or more.
Absolute revenues are very different – theme parks can generate far higher total revenues than waterparks – but having a number of profitable waterparks within a portfolio can be very good for business.
Six Flags, for example, has seven waterparks among its 20 operations and Parques Reunidos has 20 within its total group of 60 units. The profits from these operations are important for the overall business returns on these investments.
Weather warning
The most obvious issue for waterpark operations is the weather. With many of these attractions only opening for 100 or so days a year, and with 40-50 per cent of annual visits coming during their busiest month, just a couple of weeks of bad weather in the peak summer period can wipe out any potential profits.
This has led to waterparks in more northerly climes being developed indoors, however, that hasn’t always been a wise move. While an indoor waterpark can open all year round, demand is still stronger in the summer months than in the winter.
Opening all year also requires significantly more staffing, heating and other operational costs than a seasonal business and there are few free-standing indoor waterparks that can operate without some form of financial support. In many countries, this support often comes from the public sector.
Water gains
One way to make an indoor venture successful is to combine it with other activities. Operations such as Center Parcs and Lalandia in Europe, along with Great Wolf and Kalahari Resorts in North America have utilised the appeal of a year-round indoor waterpark and created large scale resort operations with significant accommodation offers.
Center Parcs’ resorts can accommodate up to 3,000 guests at one time within the accommodation and the Kalahari Resort in Pocono has a 22,000sq m (237,000sq ft) waterpark, 1,000 bedrooms and a 4,000sq m (43,000sq ft) entertainment centre. In these destinations, the waterpark serves to differentiate the resort and attract guests to stay over, with the hotel able to charge stronger room rates than other accommodation in the local area due to the presence of the waterpark.
While the Kalahari is large it’s dwarfed by Tropical Islands, a waterpark just south of Berlin, Germany, which opened in 2004.
Created within a 70,000sq m (753,000sq ft) former zeppelin hanger, the owners rapidly realised that the only way to make money from the business was to add an accommodation option.
Although the development was slow at first, an ambitious masterplan was developed for the 6.4sq km (2.5sq mi) site. This led to approval being received in 2017 for a resort expansion that would allow for the development of up to 9,000 bedrooms. This expansion potential was a major factor in Parques Reunidos decision to pay €226m (US$256m) for the waterpark and its associated real estate in 2018.
Another important area of waterpark development is as a second gate.
The majority of Six Flags’ waterparks are located alongside their theme park operations, PortAventura has had a waterpark since 2002, and the Looping Group has been adding waterpark elements to its park operations in recent years.
Global developments
The opening of Universal’s Volcano Bay waterpark in Orlando was the big news of 2017. The immersive waterpark experience attracted 1.5 million guests in its first year to complement the ever-increasing visitor volumes at the company’s other two Orlando theme parks.
There have been other new park developments around the world, many of these opening in Asia. China is now home to the world’s most visited waterpark, Chimelong Waterpark in Guangzhou, which attracted 2.7 million visits in 2017.
The latest major European waterpark expansion is at Europa Park, which is investing an estimated €150m (US$170m) in the creation of a 33,000sq m (355,000sq ft) waterpark with hotel accommodation (see p60). Called Rulantica, this, says Europa Park, will complement the existing theme park and help build on the 5.6 million people that already visit the resort each year.
While helping the team at Europa Park to plan this expansion, we examined a number of theme park and waterpark destinations around the world.
We discovered that waterparks built near to theme parks are typically able to achieve attendance levels of between 10-20 per cent of the associated theme park visitor numbers, and often the admission prices for the waterpark are not far below those of the theme park. This is a significant additional volume of visitors and revenues that can make a major contribution to the finances of a resort.
Technological leaps
As with theme parks, there’s a need for waterparks to invest regularly in their rides and activities to keep visitors returning, and there have been some exciting advances in waterpark rides in recent years.
The Master Blaster’s development in 1996 was a major advance as it allowed riders to be pushed uphill, creating a rollercoaster-style water attraction. This has been further developed with HydroMagnetic and Zip Coasters that create theme park-style thrills within waterparks.
In recent years, waterpark ride manufacturers have increased the size and impact of bowl rides, funnel rides and halfpipe slides. Whitewater West has also developed a looping waterpark ride.
Surfing technology has also rapidly improved through the years, with a range of different rides now available that allow guests to safely experience the thrill of surfing within either a waterpark environment or on a surfing lagoon.
Final thoughts
While the world is becoming ever more digital and virtual, family water play still has a refreshingly enduring appeal. This, combined with the exciting new rides and attractions that being developed each year, will serve to continue the industry well and drive more developments in the future.
Welcome to our blog post on the financial performance of water park business owners in the US! Water parks offer thrilling attractions and refreshing experiences for both locals and tourists alike. With the pay-per-ride or pay-per-day business model, water park owners have the opportunity to generate revenue through various channels, from ticket sales to food and beverage offerings. Let's dive into the latest statistics and explore the profitability, growth, and financial benchmarks of this exciting industry!
According to recent data, the water park industry in the US is experiencing significant growth. With an average annual growth rate of X%, water park businesses are making waves in the market. This growth can be attributed to the unique and enjoyable experiences water parks offer, attracting a diverse range of customers.
When it comes to revenue generation, water park owners have multiple streams of income. In addition to ticket sales, which contribute to a significant portion of the revenue, park owners can capitalize on food and beverage sales, retail operations, and rentals for lockers, tubes, and cabanas. These additional revenue streams enhance the financial performance of water park businesses and contribute to their profitability.
To determine the profitability of water park businesses, various factors come into play. The size and capacity of a water park, along with its location and attractions, heavily influence financial performance. Operating expenses, including staff wages, maintenance costs, and utilities, also impact profitability. It's crucial for owners to manage these expenses effectively and find the right balance to maximize their profit margin.
Regional differences in the earnings of water park business owners are also worth noting. The profitability of water parks can vary across different regions in the US due to factors such as climate, population density, and competition. Understanding these regional dynamics is essential for owners to make informed decisions and find opportunities for growth.
In summary, the water park industry in the US is flourishing, offering lucrative business opportunities for entrepreneurs. By analyzing financial performance indicators and industry benchmarks, water park owners can gain insights to optimize their operations and maximize profitability. Stay tuned as we explore these topics in more detail throughout this blog post!
The average revenue generated by water park business owners in the US varies depending on numerous factors such as location, size of the park, and the number of visitors. However, according to industry reports, water parks in the US typically generate an average annual revenue ranging from several hundred thousand dollars to several million dollars.
The key factors that contribute to the profitability and revenue of water park businesses include the park's popularity, the number and quality of attractions and rides, effective marketing strategies, and the park's ability to attract a diverse range of visitors including families, thrill-seekers, and tourists.
Here are some key factors that can contribute to higher revenue for water park business owners:
It's important to note that revenue can also be influenced by external factors such as weather conditions, the seasonality of the water park business, and economic factors that may impact consumer spending.
Overall, while there is no fixed average revenue that applies to all water park business owners in the US, a well-run and popular water park can generate significant revenue and provide a profitable business opportunity.
Water Park Financial Model
When it comes to running a profitable water park business in the US, several key factors play a crucial role. Understanding and effectively managing these factors can significantly impact the financial success of the business.
1. Location: The location of a water park is one of the most important factors contributing to its profitability. A park situated in a popular tourist destination or a densely populated area is likely to attract more visitors, leading to higher revenue. Additionally, proximity to major highways or airports can also increase accessibility for both local and out-of-town guests.
2. Seasonality: Seasonality plays a vital role in the profitability of water park businesses. The majority of water parks operate during the summer months when the demand for water-based entertainment is at its peak. Maximizing revenue during this limited operational period is crucial. Offering special events, promotions, and discounts during shoulder seasons or off-peak hours can help attract visitors and increase profitability.
3. Attractive Attractions: Having a diverse range of exciting and well-maintained attractions is key to attracting and retaining customers. Water parks with thrilling water slides, lazy rivers, wave pools, and other unique features are more likely to draw visitors and generate repeat business. Regularly updating and adding new attractions can also help keep the park fresh and appealing.
4. Marketing and Promotion: Effective marketing and promotion strategies are necessary to drive customer awareness and increase attendance. Utilizing various channels such as social media, online advertising, and partnerships with local hotels or travel agencies can help reach a wider audience. Offering discounts or packages for group bookings or season passes can also contribute to profitability.
5. Operational Efficiency: Efficient operations are essential for maintaining profitability. Streamlining ticketing and entry processes, ensuring quick and friendly customer service, and maintaining cleanliness and safety standards are all crucial aspects of running a successful water park. Efficient use of resources, such as energy and water conservation measures, can also reduce overhead costs and improve profitability.
The earnings of water park business owners can vary significantly across different regions in the US. Several factors contribute to these variations, including the population size and demographics, tourism rates, and climate conditions of each region.
Population Size and Demographics: Regions with a larger population tend to have a larger customer base for water parks, which can lead to higher earnings. Additionally, regions with a higher percentage of families and young adults are more likely to attract visitors to water parks, further boosting revenue.
Tourism Rates: Tourist destinations often have a higher demand for water parks, as visitors are looking for entertainment options during their vacations. Popular tourist regions, such as coastal areas, major cities, and vacation hotspots, can experience a surge in water park attendance, resulting in increased earnings for business owners.
Climate Conditions: The climate plays a significant role in the popularity and profitability of water parks. Regions with warmer and longer summers typically have a longer operating season for water parks, allowing business owners to generate higher earnings. On the other hand, regions with shorter summers or colder climates may have a limited operating season, impacting revenue potential.
The water park industry in the US has experienced steady growth over the years, with an average annual growth rate of approximately 3-4%. This growth can be attributed to various factors such as increasing disposable income, changing consumer preferences, and the desire for unique and entertaining experiences.
One of the key drivers of growth for water park businesses is the increasing popularity of recreational activities and the demand for family-friendly entertainment options. Water parks provide a fun and thrilling experience for individuals of all ages, making them a sought-after destination for both locals and tourists.
Factors contributing to the growth of water park businesses in the US:
Water park businesses in the US generate revenue through various primary streams.
The operating expenses of water park businesses in the US have a significant impact on their profitability. These expenses include the costs associated with maintenance and repairs, employee wages and benefits, utilities, insurance, marketing, and administrative expenses.
Maintenance and repairs: Water parks require regular maintenance and repairs to ensure the safety and functionality of the attractions. This includes the inspection and repair of water slides, pools, pumps, filtration systems, and other equipment. The cost of maintenance and repairs can be substantial and can directly affect the profitability of the business.
Employee wages and benefits: Water park businesses employ a significant number of staff members to operate and manage the park. These employees include lifeguards, ride attendants, maintenance workers, food and beverage staff, customer service representatives, and administrative personnel. The wages and benefits provided to these employees contribute to the operating expenses of the business and impact its profitability.
Utilities: Water parks consume a large amount of water and electricity for the operation of rides, pools, and other facilities. The cost of utilities, including water, electricity, and gas, can be substantial and can impact the profitability of the business.
Insurance: Water parks are exposed to various risks, including accidents, injuries, and property damage. Therefore, they require comprehensive insurance coverage to protect against potential liabilities. The cost of insurance premiums can be significant and can impact the profitability of the business.
Marketing: Water park businesses need to invest in marketing and promotional activities to attract customers and increase attendance. These marketing expenses can include advertising campaigns, website development, social media marketing, and other promotional efforts. The cost of marketing can impact the profitability of the business, as it directly affects the park's ability to attract and retain customers.
Administrative expenses: Water park businesses have various administrative expenses, such as rent for office space, office supplies, software licenses, legal and accounting fees, and other overhead costs. These expenses contribute to the overall operating expenses and can impact the profitability of the business.
The average profit margin for water park businesses in the US can vary depending on a range of factors including location, size, operating expenses, and overall financial management. However, industry data suggests that a healthy profit margin for water park businesses typically falls within the range of 15% to 25%.
Several factors contribute to the profit margin of water park businesses. One of the primary drivers is the ability to effectively manage operating costs such as labor, maintenance, utilities, and insurance. By optimizing these expenses, water park owners can increase their profit margin by reducing overhead.
Another factor that influences profit margin is the pricing strategy implemented by the water park. Striking a balance between affordability and generating revenue is crucial. Charging too high a price for entry may deter potential visitors, while setting prices too low may result in insufficient revenue to cover operational expenses and generate profit.
In addition to admission fees, water park businesses often generate revenue from other sources such as food and beverage sales, retail sales, and rentals. Diversifying revenue streams allows park owners to boost their profit margin by capitalizing on additional opportunities for income.
It's important to note that the profit margin of water park businesses can also be influenced by natural factors and seasonal fluctuations. For instance, parks located in regions with a shorter operating season may experience lower profit margins compared to parks in areas with year-round demand.
By focusing on these strategies and continuously monitoring financial performance, water park business owners in the US can aim for a healthy profit margin that supports sustainable growth and success.
The size and capacity of a water park play a crucial role in determining its financial performance in the US. A larger water park with a higher capacity has the potential to attract a larger number of visitors, which directly impacts revenue generation. Here are some key points to consider:
However, it's important to note that the financial performance of a water park is not solely determined by its size and capacity. Other factors like location, competition, marketing strategies, and overall management also play a significant role in the park's success.
The water park industry in the US has its own set of financial performance indicators that serve as benchmarks for measuring the success and profitability of businesses within this sector. These benchmarks provide valuable insights for water park owners and investors to assess the financial health of their operations and compare them to industry standards.
One of the key financial performance indicators in the water park industry is the revenue per visitor. This metric measures the average amount of money generated from each visitor who enters the park. It takes into account the revenue from ticket sales, food and beverage purchases, retail sales, and rental services. The industry benchmark for revenue per visitor can vary depending on the size and scale of the water park, but a higher revenue per visitor indicates better financial performance.
Another important benchmark is the occupancy rate, which measures the percentage of available capacity that is filled with visitors. A higher occupancy rate indicates better utilization of resources and attractions within the water park. The industry benchmark for occupancy rate in the US water park industry typically ranges between 60% to 80%, depending on factors such as location, seasonality, and marketing efforts.
The average cost per visitor is another financial performance indicator that helps gauge the efficiency of a water park's operations. This metric takes into account the expenses incurred per visitor, including labor costs, maintenance, utilities, and other operating expenses. Achieving a lower cost per visitor compared to the industry benchmark indicates better cost management and operational efficiency.
In addition to these indicators, the profitability of a water park business can also be measured through metrics such as net profit margin and return on investment (ROI). The industry benchmark for net profit margin varies, but a healthy range is typically between 10% to 20%. A higher net profit margin indicates better financial performance and the ability to generate profit after accounting for all expenses.
When it comes to ROI, the industry benchmark can vary significantly depending on factors such as the initial investment, park size, and location. However, a benchmark ROI of at least 10% is generally considered favorable. Achieving a higher ROI indicates that the water park business is generating a satisfactory return on the invested capital.
Understanding these industry benchmarks for financial performance indicators can help water park business owners set realistic goals, identify areas for improvement, and make informed financial decisions to enhance their overall profitability in the competitive US water park market.
In conclusion, water park business owners in the US have the potential to generate significant revenue through various channels such as ticket sales, food and beverage sales, and retail sales. The profitability of these businesses is influenced by factors such as location, park size and capacity, as well as operating expenses. While there is no specific data available on the average revenue or profit margin for water park businesses in the US, it is evident that the industry offers opportunities for growth and financial success.
The pay-per-ride or pay-per-day business model allows water park owners to cater to a wide range of customers, both locals and tourists, who prefer flexibility in their visit. Additional revenue streams can be generated through offerings such as food and beverage sales, retail sales, and rentals for lockers, tubes, and cabanas.
Regional variations may exist in terms of earnings for water park business owners, influenced by factors such as local population, tourism rates, and competition. The industry as a whole experiences an average annual growth rate, indicating a positive outlook for existing and prospective water park owners.
It is important for water park business owners to carefully manage their operating expenses to ensure profitability. By benchmarking against industry standards and continuously monitoring financial performance indicators, owners can make informed decisions and optimize their operations.
Water Park Financial Model
$169.00$99.00
Expert-built startup financial model templates