The number of hotels in theme parks has mushroomed in recent years. In the USA, top attractions such as Disney World and Universal Studios boast a wide range of on-site accommodation, and while the European market is some way behind, it continues to grow. According to a recent report by consultants PricewaterhouseCoopers, 14 of the top 29 European theme parks now offer accommodation, including 29 hotels and four hostels - 20 of which have opened in the past two years, with a further three due to go live this year.
The obvious logic behind putting a hotel in your theme park is that guests are kept on the premises for longer and spend more money. A hotel can also help the park to tap into new markets such as conferences and short breaks.
Robert Barnard, director of hotel services at hospitality consultancy PKF, says on-site hotels can work very well provided they are not overly reliant on theme park customers.
"Theme parks are destinations and as such they lend themselves to hotelkeeping," Barnard says. "If they can service not just the theme park but other segments such as conferences they can work very well. In terms of occupancy, that can be a very attractive proposition. It's a yield management exercise."
Putting a hotel on site can help a park to evolve from being a day-visit attraction to an "experiential resort destination", says PricewaterhouseCoopers researcher Liz Hall, and can represent a good opportunity to reinforce the central theme or values of the park.
However, while Hall says that the UK has a "mature" theme park market, there are challenges for on-site hotels. Most UK theme parks close for the winter, which usually means around October to March, and many have a largely local appeal or are simply too small to warrant putting a hotel on site.
For those that do decide to put a hotel on site, a major issue is deciding whether to operate the hotel themselves or to get a third party to run it. Some of the larger theme parks have a mixture of both, but the obvious danger here is that the third party offerings will cannibalise demand for the incumbents. In January, Euro Disney, for example, said the opening of several new third-party hotels at its Disneyland Paris park had hit turnover figures for its hotels division in the three months to 31 December 2003, contributing to a year-on drop of 1%.
"You would have to work out if [running a hotel] was your core business or not and I would suspect that it wouldn't be," Barnard says, adding that the third-party option offers an income from the hotel operator plus the potential benefit of the third-party brand and the hotel chain's international network. Jonathan Langston, managing director of TRI Hospitality Consulting, agrees, adding that the third-party model is especially suited for parks aiming to reach customers other than theme park guests.
UK theme park Alton Towers has two on-site hotels that are open year-round, although the main park is open from March to October only. Both are themed hotels, owned and operated by park owners The Tussauds Group.
Mark Davies, head of hotels at Alton Towers, says the park decided to open its first property, the Alton Towers hotel, in 1996 after continued growth in the early 1990s. "It became obvious that a few hours in the park were just not enough, and the demand for overnight accommodation soared," he says.
While the two hotels are aimed in the main at the family market and theme park visitors, they actively court alternative revenue streams such as residential conferences. The recently opened Splash Landings waterpark hotel, for example, is marketed as "an unusual yet professional" venue for conferences and has a 550-delegate conference centre.
To keep occupancy levels up out of season, the park operators offer short winter breaks, with the main lure being the 40,000sq ft, all-weather waterpark, Cariba Creek. On selected weekends, and during the February half-term holiday, hotel guests can access park attractions. And in December the Tussauds Group opened a spa at the Alton Towers Hotel.
Another big UK attraction that has a hotel is Blackpool Pleasure Beach: the three-star Big Blue hotel is part of the Best Western consortium but is operated by the pleasure beach and located next to the south entrance.
Big Blue general manager Martin Jackson says that although the Pleasure Beach is closed for the winter, there is a variety of other local attractions that open year round, with conventions and conferences helping to boost occupancy. Jackson says the hotel has also benefited from the influx of Ryanair passengers flying to Blackpool Airport from London Stansted and Dublin airports. The hotel has a stand at the airport and is just one mile away. "We're the first big hotel they see," he says.
The Big Blue purposefully aims to attract a broad mix of guests to boost occupancy. Most of the 116 bedrooms are family rooms, with bunk beds, TVs and PlayStation 2 games consoles for the children. But there are also two luxury suites, 20 standard rooms for budget travellers, "executive rooms" for businesspeople; and a dedicated business centre with video conferencing and conference facilities for up to 60 delegates. A 140-seat brasserie-style restaurant completes the picture.
Jackson says the hotel achieved 99% occupancy for the four months over last summer, and managed about 50% in December, despite closing for a week at Christmas. Buoyed by the success of the Big Blue, Pleasure Beach owner and managing director Geoffrey Thompson is considering building a 40-room extension to the hotel and building a hotel at the north end of the park and another at his Southport theme park Pleasureland.
Other theme parks, such as Drayton Manor Park in Staffordshire and Chessington World of Adventures in Surrey, are also considering putting hotels on site.
But not everyone is convinced of the benefits. While Legoland Windsor is one location where PKF's Barnard feels a hotel could work well, the park insists it has no such plans at present. Instead it has developed a list of 18 "preferred hotel partners" which each pay £1,000 to be featured on the Legoland Windsor website and in its promotional literature. "It's a really good partnership," says park spokeswoman Penny Frankel. "Over the past three years we've increased sales both ways."
So what, then, is the future for theme park hotels in the UK? According to TRI's Jonathan Langston, we only have to look to the skies. "I don't think we'll see a whole swathe of hotels being built on, or next to, theme parks in the UK," he says. "The main problem we have is the weather."
|Theme park hotels overview - Of the 29 top European theme parks, which account for more than 71 million visitors annually, 14 have accommodation on site and five have plans to add further facilities. - The 14 parks with accommodation provide a total of 33 establishments (including hostels), with 11,821 rooms. - Most of the 14 parks with accommodation (60%) cited customer demand as the prime reason for adding accommodation, while half said extending the length of stay of park visitors was a key aim. - Two-thirds (69%) of those with accommodation expect it to become more important in revenue terms in the next five years. - Three-quarters (78%) reported increased secondary revenues as a result of developing accommodation, while two-thirds (67%) reported increased primary revenues. - The average length of stay for the hotels in the survey was 2.8 days, although this included one park where the average length of stay was 15 days. The average without this result was 1.7 days. - Of the 15 parks with no accommodation on site, five plan to add facilities. *Source: PricewaterhouseCoopers' Theme Parks and Accommodation Survey 2004*|
|Alton Towers theme park, Staffordshire Alton Towers' two hotels are open all year round. The Alton Towers Hotel, which opened in 1996, has 175 bedrooms and seven themed suites, with different offerings aimed at adults and children. The 216-bedroom, Caribbean-themed Splash Landings hotel (below), which opened in June 2003, markets itself as Europe's first waterpark hotel and has a 300-seat restaurant, amusement rides and "an indoor and outdoor river". According to Mark Davies, head of hotels at Alton Towers: - The number of park visitors overnighting in the area has increased from 9% in 1995 - before the first on site hotel opened - to 36%. - The total number of sleepers rose from 138,000 in 2002 to 220,000 in 2003, representing almost 10% of the park's total visitors. - Occupancy for Splash Landings for the first six months after opening was 77%. - Sleeper density is around 3.9, showing the appeal to the target market, families. - Conference business has tripled from about 4,800 rooms in 2002 to 12,500 in 2003. - The total number of roomnights sold in 2003 for the Alton Towers Hotel and Splash Landings, which opened in June, was 72,766.|
|Think before you build - What is the hotel competition like in the local area? - Is the pull of the theme park local, national or international? - What is the typical guest profile? - Do you intend to open the hotel in the winter when the main theme park is closed - if so, how will you fill the rooms? - Should you run the theme park yourself, or bring in a third party?|