Challenges when it Comes to Financing an Indoor Waterpark

Water parks are a great place to go especially during hot summer days. They are a great place to cool off and have fun at the same time. Water parks have become so popular that they are now being built indoors inside malls, hotels, and other large places. The great thing about this is that you have a place to cool off during summer without having to worry about the hot sunlight since you have a nice roof over your head.

Water Park Contractors

long water slides

However, trying to finance an indoor water park can be quite challenging. People who want to build indoor water parks are left to make a lot of decisions when it comes to financing and looking for good Water Park Contractors. Sometimes, indoor water parks can be more difficult to fund compared to hotels and other types of properties used commercially. The main reason why funding one is quite challenging is due to the fact that indoor water parks take the elements of both a hotel and an amusement park. Today, we are going to go through the three biggest challenges when it comes to financing an indoor water park resort; scale, risk, and branding.

1.) Scale – Indoor water park resorts are big, far bigger than regular water parks and other amusement parks. In general this type of water park has a more grandeur scale which in turn will require it to have much bigger loans for its development. In addition to that, the cost of building an indoor water park is quite big even compared to other hotels. There are properties in which the cost can range in between 150k – 300k dollars per room when you include the cost of having an indoor water park. Water Park Restoration costs can go quite high as well considering the sheer sizes of the water parks.

2.) Risk – One of the risks about financing an indoor water park is that they rely on income much like a hotel which means the income is dependent on the occupancy of the water park. This creates a slight unstable form of cash flow and less predictable for leases that see it as a high risk investment. In addition to that the water park also has to take care of its facilities as an amusement park. Bankers don’t generally like to finance properties focused on amusement.

Another thing risky about financing indoor water parks is that there aren’t many of them. Traditional water parks yes but not indoor ones. Because of this, investors, lender, and bankers aren’t that familiar with the works of indoor water parks and how different they are from outdoor ones.

3.) Brand – If you are trying to finance an indoor water park franchise, then you won’t encounter much of the problem since the franchise itself is already an established brand. However, when it comes to independent water parks, it can be difficult finding some capital. When it comes to maintaining, if you don’t have much capital you might not be able to prepare for the costs of Water Park Restoration. It is better to go with an established franchise so as to have support.