ANALYSIS
The indoor waterpark at Great Wolf Lodge, Niagara Falls, Ontario
There were key challenges and areas of
uncertainty during the post-IPO phase in Great Wolf’s evolution, involving questions around customer segmentation, geography – would the concept resonate in areas outside the upper Midwest? – and, from a market / valuation standpoint, around costs and (lack of) direct comparables. But, with its team in place and mission
clear, challenges were addressed head on. The period from 2004 to 2008 represented a real step-change in company scale, mar- ket reach and the product offer, including a number of new openings (see Table 1).
TABLE 1 GWR Openings 2005-2008 2005
Williamsburg, Virginia Poconos, Pennsylvania 2006
Niagara Falls, Ontario Mason, Ohio 2007 Grapevine, Texas 2008
Grand Mound, Washington Concord, North Carolina (opened early 2009)
2004 - 2008 KEY DEVELOPMENTS ● Scale: Introduction of the 400-600 room resort prototype, a vastly expanded indoor waterpark footprint and – in selected locations – signifi cant conference facilities. ● Product offer: Signifi cant expansion of resort amenities and secondary revenue
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attractionsmanagement.com
Outgoing CEO, Kimberly Schaefer, joins the Great Wolf board in 2016, as Ruben Rodriguez takes the helm
centres, including both self-branded and third-party branded F&B; and multiple non-waterpark attractions and activities including the Cub Club, Scooops children’s spa and the Northern Lights arcade. ● Operations: Increased operation effi ciencies through improvements to the development model, coupled with investments in new standards and systems, including early adoption of RFID technology, green technology and more. These radical improvements at company and resort level signifi cantly boosted not only operating margins, but also key customer metrics including revenue per occupied room (RevPOR), guest satisfaction and repeat visitation. However, by 2008, Great Wolf – like many fast- growing companies involved in ground-up real-estate development – was caught out. In addition to macroeconomic challenges, the company’s property portfolio was exposed to many of the hardest-hit markets
in the industrial heartland of the US. That included the upper Midwest and Ohio Valley, and core markets which had been over- developed with competitive offers during the market and sector boom: by 2009 the Dells had no fewer than 16 other resorts and hotels with some type of indoor water- related activity or amenity. Facing strong market and investor
headwinds, GWR shifted away from expansion and development, hunkering down to focus on its balance sheet. Cost savings were made from central offi ce overheads, operating effi ciencies were made at the resort level and non-core assets – such as the Blue Harbor Resort in Sheboygan, Wisconsin – were sold. Many properties and brands wilted during the economic downturn, but GWR soldiered through, further solidifying its position as market leader and by 2011 – with brighter skies on the horizon – it was exploring a reverse-privatisation to better enable its continued growth and development.
THE APOLLO ERA In April 2012, following a well-publicised bidding war with KSL Capital, Apollo Global Management agreed to acquire GWR for $798m (£511m, €734m). At $7.85 a share, the deal valued the company’s equity units at a signifi cant discount to the 2004 IPO price, but it came as a relief to many who had seen shares trade in the low single-digits during the economic crisis.
AM 3 2015 ©CYBERTREK 2015
PHOTOS: GREAT WOLF RESORTS
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