Guest Article

David J. Sangree and Nuresh Maredia assess the impact of COVID-19 on US waterparks and waterpark resorts in 2020

he current COVID-19 crisis continues to have a significant negative effect on the waterpark industry. Waterparks play a major role in providing

entertainment, supporting job creation, fostering small business opportunities, and contributing to robust economic growth. Due to COVID-19, many outdoor waterparks delayed their season openings while others have decided, or were mandated, not to open at all in 2020. Many resorts with waterparks and standalone indoor waterparks were forced to close for several months, and some have yet to reopen. With the largest database of waterparks and waterpark

David J. Sangree, MAI, CPA, ISHC, is president of Hotel & Leisure Advisors (H&LA), an international hospitality  appraisals, feasibility studies,   support for the lodging and leisure industries. Sangree, a   is an internationally recognised expert on waterpark resorts and  studies of indoor and outdoor  one of Aquatics International  People” and received the  World Waterpark Association   CNBC and has written articles 

resorts across North America, H&LA has tracked the openings and closings of standalone waterparks and resorts with waterparks in 2020. Our data has been confirmed via online or property-level sources and is the latest data available as of the date of publication. With this data, we were able to estimate the total losses in revenue and attendance to the U.S. waterpark industry. H&LA estimates an overall impact of $2.9 billion in

lost revenue and 57.5 million in lost attendance for all outdoor waterparks, resorts with outdoor waterparks, standalone indoor waterparks, and indoor waterpark resorts in the United States between March and August 2020. Standalone indoor and outdoor waterparks account for $1.2 billion in lost revenue and 40.2 million in lost attendance, while resorts with an indoor or outdoor waterparks account for $1.7 billion in lost revenue and 17.3 million in lost attendance. Attendance was down 69% from 2019 at U.S. waterparks due to the closures and mandates associated with COVID-19.

Methodology We analysed waterparks by type (outdoor vs. indoor, resorts vs. standalone) and grouped them by size and operating status (open vs. closed). We estimated attendance and per capita spending for each group based on our waterpark financial and attendance database, interviews with various parks, industry publications, SEC filings, and other industry sources. We also considered whether the waterparks are private or municipally owned. We then estimated impact from COVID-19 for each of the groups based on the number of days open and potential impact from reduced


demand and limited capacity. For resort properties with waterparks, our analysis focused on leisure guests that utilize the waterpark and did not estimate impact on the resort from lost group and commercial guests. For the six-month period of March through August

A tough road ahead T

2019, we estimate the industry attracted approximately 83.5 million attendees. When comparing that to the same six-month period in 2020, the industry saw only 26 million attendees, for a negative impact of 69%. Waterpark resorts had a larger total revenue impact than standalone properties because of their size and numerous departments such as rooms, food and beverage, spa, etc. that exist. The table marked ‘1’ shows standalone and outdoor waterparks had a slightly higher percentage of impact than resorts with waterparks.

Impact With the mandated closures, limited capacities, and travel restrictions, the waterpark industry has been one of the industries hardest hit in the midst of the COVID- 19 pandemic. Unlike other recreation businesses that are open year-round, outdoor waterparks have a short operating season, and closing for even a week has a substantial impact on the bottom line for these properties. Most resorts with indoor or outdoor waterparks were closed starting in mid-March and did not start reopening until May or June. Some are still closed and may not reopen until 2021. The uncertainty, drastic decreases in tourism numbers, and government restrictions resulted in huge economic loss for waterparks across the United States. Some waterparks have been impacted significantly, and our research indicates that they may not rebound from the economic downturn. We project these negative impacts to continue in 2021

until an effective vaccine or treatment for COVID-19 is developed. Our estimate of an overall impact of $2.9 billion in lost revenue for the waterpark industry does not include the impact on manufacturers, suppliers, and other businesses that cater to the waterpark industry. If capacity limits continue in 2021, waterpark operators will have to re-think their operating season schedule, operating hours, ticket and season pass pricing, and amenities offered in their parks and resorts.

Outdoor Waterparks: For most outdoor waterparks, the season typically begins around Memorial Day and ends between mid-August and Labor Day. For resorts with outdoor waterparks, although the resorts are open year-round, their waterparks may be seasonal, except in Florida, where some of the waterparks are open year-round. As the 2020 waterpark season kicked off, the vast majority of waterparks decided to delay opening or were mandated not to open,

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