Great Wolf Lodge: Allow Them Their Business Model

Conny MillardBy Conny Millard
Published: Jan 24, 2016
 
 
IT WON’T be an exaggeration to say that the world has finally taken note of Squamish. It’s true: We are no longer a sleepy town on the way to Whistler. Our new-found fame has also brought with it some big-name businesses and one among them hoping to make a splash is the Great Wolf Lodge, North America’s and, in fact, the world’s largest chain of indoor water parks.
As any mom can tell you, splashing around in a water park with your kids can feel at times the very definition of bliss. So, it’s not too hard to understand the disappointment many may have felt when they found out only hotel guests are allowed use of the waterpark. Putting away my mother hat and my business consultant hat on, I find myself agreeing with the company policy.
The very idea of business expansion is an affirmation that a certain business model is working and can be successfully replicated elsewhere. Business expansion is possible because of a trusted business model and in this case, Great Wolf Lodge has expanded to 14 locations on a specific business model: By ensuring the resort guests are getting an exclusive deal on their property. This is their tried-and-tested business model. Replicating tried-and-tested models builds brand loyalty and that attracts new and existing customers. It seems to be working quite well for Great Wolf Lodge, from right when they first established their first location in Wisconsin in 1997.
 And let’s not forget what the patrons are willing to pay for this experience. Patrons are prepared to pay a premium of over $400 per night for a family of four based on the type of experience they are investing into. Surely, they would expect the company to manage potential overcrowding and long line-ups. And over 40 per cent of customers are repeat customers so maintaining the same brand experience is critical to maintaining such high level of customer loyalty.
And then, of course, there is the question that even the most successful business mulls over and over again: Will it work here? Is this the correct decision? Companies like Great Wolf Lodge are no different. Their investment is said to be $150 million that they are planning to invest and that means an acutely sharp analysis of risk and rewards—and a closely studied replication of successful and existing business model. As amazing as it would be for them to make an exception for Squamishers, to change the business model to accommodate the wishes of one community is simply put, bad business practice.
The numbers even for this successful business are quite significant: For the sizeable investment of $150 million plus estimated $14 million per year in payroll plus annual expenses, the Pattison group will need to sell 450,000 nightly stays to recoup their initial upfront first-year investment. Gambling with altering their business model to allow day passes only in Squamish does not make sound business sense.
And yet, we stand to gain. I think there are some great community benefits to having a resort like the Great Wolf Lodge locating here. They are anticipating about 20 months of construction jobs and then, of course, there are the jobs of about 400 full-time equivalent jobs with 50 managerial positions. In terms of the recent rebranding initiative of Squamish and our local economic strategy as a tourism-focused destination, the resort would fit well. Even though I’d love to have a local family pass, I look forward to spending some time with our family at the Great Wolf Lodge—but as a guest.
Conny Millard is a mother and business consultant

Comments

  1. Dave Colwell says:

    Anyone who has ever stayed at an an All Inclusive Resort (and there are many in Squamish who have) will have certainly ventured out from their accommodations from time to time to sample what the surrounding area has to offer and, dare I say it…spend some of their money there and do some shopping. So, what’s the problem? Most of these resorts promote such things including ancillary activities.
    Just because you can’t use the water slide or any other internal facility, there should no reason to object to such a plan.
    Quit the nay-saying already! When is your next visit to Cuba or Puerto Vallarta?

    • brendan baines says:

      Another Canadian location would stop my family from venturing to Washington. I would much rather keep my dollars here if we are talking about a similar product. Kudos to the Pattison group for talki about a Sqaumish location as it would let us visit a few more times a year.