Profits That Flow!

Today I played hooky. Yesterday Chris and I took the kids to the Coco Key Indoor Water Park. We planned an overnight on a Sunday to take advantage of lower rates and less crowds. Well... that was what we had planned.

My business hat came on as soon as I walked into this place. I really didn't know what to expect, but I was intrigued that investors determined that an indoor water park in south NJ near Six Flags Great Adventure would be a money-making endeavor. The admission fee for 1 day was $39.00 regardless of age. So, OK, I could see that weekend traffic would bring in a decent revenue - but I still couldn't see the profitability opportunity for a venture that seems geared for the colder months and would see most of the business on weekends since kids are in school during the week. Then I got there.

They are smartly marketing to the under 12 crowd. Yes, there are activities and rides on which older kids and parents can enjoy - but this is a place for the kiddies. So, let's think about this market segment. This is the population that parents want to keep corralled. Indoor, space is finite - there is no wandering off to Animal Kingdom. These are also the ages where kids have more flexible schedules, and most are not even in school yet. So, local parents who are trying to figure out in what activities to engage their children say, "hey, why not a fun water park today?" If they buy a seasons pass and go once every couple of weeks, it works out well.

We had planned on enjoying the park to ourselves on Monday, figuring that most kids would be in school. We are so naive! The place was almost as full as Sunday. Granted there were mostly smaller children this time, but there were also quite a few older kids with whom our seven- and ten-year olds were playing. I looked at the schedule and the park is smartly closed on Tuesday and Wednesday, which would most likely be dead days.

This indoor water park is capitalizing on the Chuck E. Cheese business model: a place where parents can let their kids have fun, but be within arms length of a million activities. Unlike Chuck E. Cheese it would seem that their overhead is much higher, so I am curious as to what those numbers look like (all that water and those lifeguards!). Still, I can see the consistent profits even in the summer months just from parties alone. And they smartly have a strategic alliance with the Marriott, offering "stay and play" packages.

Personally, I don't know if I would invest in such a venture - but it is always interesting to look at how others develop a business idea that seems successful. I am tempted to revisit in the summer to see how they are faring - if nothing else, the kids would be happy!