hat is the difference between a great idea and a great opportunity? A great idea is inspirational and visionary. A great opportunity is born out of a great idea — well vetted and meticulously planned — and the skills required to move from vision through execution are vast and varied, requiring an experienced team of individuals and consultants.
The initial planning stage of a waterpark development is as critical for seasoned owners/developers as it is for those that are new to the industry. Let’s start with the basics:
The source of the initial idea is usually organic, but may stem from one or more of several inspirations:
- A passion for the industry — if you are reading this article, this is you!
- Identification of a market void — there are no waterpark resorts in this area.
- Identification of a market strength — there are a lot of people visiting this area.
- Identification of a unique prospect — wouldn’t it be great if there were a waterpark next to this amusement park?
Everyone’s knowledge and experience is different. Analyzing the various details required to choose a waterpark development site takes a skill set so vast that most of us need help.
However, if you have the ability to set aside your passion and objectively assess the elements at play, you can position yourself for success. There are some basics related to market forces and the physical attributes of the development site. Generally speaking, choice of market comes first and then you search for your site.
Market considerations include demographics, competition and established market tendencies. Waterparks are places of joy that bring families together and are instrumental in creating lasting memories. However, don’t fall into the “If you build it, they will come” mindset. Unlike the Kevin Costner movie, you need more than passion, an idea and voices from a corn field. You need a solid business plan that can spur equity investors and lenders to action.
Most waterparks are drive-to destinations, and there are two very important metrics related to demographics: the population within a successive one- to four-hour drive radius, and the average household income of that population. Maximizing these two metrics is extremely important. How do you know what a good metric is for these prior to getting a professional feasibility consultant on board? Perform the same analysis on some other active and successful waterpark properties and benchmark your potential project site against them.
Understanding the competitive landscape is critically important as well. What type of a market are you planning to enter? There is no single rule of thumb when it comes to picking a winning market, but here are a few thoughts to ponder:
- Developing a waterpark far from any competition is not necessarily the goal. Waterparks are a destination type of amusement and destinations typically consist of a critical mass of other varied entertainment, amusement and commercial properties. People like to vacation where they can spend multiple days doing a variety of different activities. Even having other waterparks in the same general destination area can be a good thing.
- Know your competition and look for factors of differentiation. Catering to a specific demographic, positioning yourself in a high-visibility spot, assembling a unique aquatic program with several signature rides and activities and standing out with a fresh theme are all ways to help achieve that differentiation.
- Learn from your potential competition. What are their rates? Do they fill to capacity? What demographic are they targeting? What’s working for them, and how will you leverage that knowledge to better your offering?
Selecting the site
A site’s physical and legal characteristics are very important factors in choosing a property. These variables include buildable acreage, infrastructure capacity, constructability, zoning and the public incentive landscape.
Determining how large your site needs to be is primarily a question of what you ultimately want to put on it. It’s important to dream big. Budget is extraordinarily important, but too much focus on costs up front can frustrate creativity and ultimately stymie success. Choose a property that allows for future expansion and plan to phase your project to control your initial costs.Incentives may exist in many different formats and from various agencies including federal, state, county and local governments. Loans and grants may be available related to developing in certain areas, tied directly to job creation or building within a tax incremental district (TID) to name a few. These types of programs can significantly improve a project’s proforma and flip a project from “no-go” to “full go.”
Building the case
Of course, fully evaluating all of the above factors is not something one can do alone. Even when a developer does possess verifiable expertise, investors will often require a third party to provide opinion and/or certify the development as suitable. Your development team will need to consist of:
- Feasibility Consultant — As this is a specialized field, be sure that your consultant has experience in the industry. Investors appreciate known entities. A favorable report from a reputable firm is a must.
- Site Consultants — This includes civil engineers and environmental consultants to help guide you through entitlement work and ensure that you understand the schedule and costs for getting your project approved. A civil engineer that is plugged in with the local municipality can be key to navigating local political waters.
- Branding — Building a compelling pitch requires a cohesive story, and that’s where your brand strategy comes in. Your brand strategy will be used throughout your marketing deck and integrated with your design.
- Masterplanning & Architecture — Gaining traction with investors and local leaders is imperative. “Hey, I got this great idea!” isn’t going to get you far. You need someone to articulate your vision and brand on paper and get you far enough along to be able to construct a Rough Order of Magnitude (ROM) budget so that you can build your proforma and understand your ask.
- Operational — Investors want to know the key players that will ultimately operate the facility. Experience here is paramount. A proven track record will help investors feel confident that their participation is sound.
- Cost Consultant — Everything hinges on the veracity of that initial budget. A too-conservative estimate can kill your project, and too loose can start you down a path that you won’t be able to finish. The cost consultant may also be your construction manager; hired upfront on a consultative basis.
Converting a great idea into reality is a complex process that requires a lot of experience. The most important thing that you can take away from this article is to be methodical, check your boxes, find the right partners and don’t short-change the process. You need to be prepared for some of these expenses up front to properly vet the idea and get you prepared to take it to market. That initial investment in time, effort and money is your best opportunity for success.
About the Author
Jason Sorci is a principal with ADCI, the world leader in waterpark resort planning, design and architecture. Sorci’s experience spans more than 20 years, and his clients include Great Wolf Resorts, Kalahari Resorts, Wilderness Resorts and many other independent resort owners and operators.