It was a problem Nikki Nolan had seen before. Since 1993, she had been advising leading amusement and water parks on how to manage increased revenue variability driven by weather and climate change. In 2007, as the recently appointed Managing Director of Global Business Development at Great Wolf Resorts, the world’s largest operator of indoor water parks, she saw an opportunity to leverage the company’s competitive advantage in the indoor market to build a robust platform for future growth. Like her previous role as Director of Strategic Planning & Development for Merlin Entertainment, a $4.5B operator of 124 attractions and hotels globally, her role at Great Wolf was created out of management’s growing concern about severe risks from weather related events to top and bottom line growth. 
The water park industry is a subset of the broader amusement park industry, with total revenues of $4.3B occurring during a peak season between April and September.  The majority of water park revenues comes from sales of admissions tickets (57.5%), food and beverage (24.2%) and merchandise (15.5%). In the US market, as much as 40% of revenue for an entire season is tied to 3 major holiday weekends—Memorial Day (May), Fourth of July (July) and Labor Day (September). 
Amusement parks fall into one of three types of parks, each with differing operating models and risks. Destination parks, such as Walt Disney Resorts and SeaWorld, attract visitors from out-of-state and overseas, are generally booked 6-12 months in advance, and have an average visitor duration of 3-5 days. Regional parks, such as Great Wolf, Six Flags and Cedar Fair, attract visitors from a 3-5 hour driving radius, are booked on average 1-4 weeks ahead of time, and have an average visitor duration of 6-10 hours. Beyond this, a wide range of local operators run amusement parks whose visitor attend more spontaneously and for duration of less than 4 hours. 
The 1990s and 2000s saw the build out of amusement park assets in the US and, more importantly, an increase two and three sigma weather events corresponding to prime amusement park locations. Several of these occurred in Texas and jeopardized a significant portion of Six Flags’ and Cedar Fair’s newly built locations. This, along with a need to find growth outside of the core Sunbelt region of the US, prompted the industry to bring analytics and forecasting talent in-house into prominent strategic planning and development roles. Companies that failed to respond to weather variability with increased investments in analytics and asset diversification found themselves either with significant net operating losses or the target of acquisition. Overall, this accelerated the consolidation and professionalization of management in the industry.  
Great Wolf Resorts
The question of how to increase the stability of the underlying business model of Great Wolf, while maintaining double digit revenue growth, was a top concern for the management team in 2007 as they began eyeing the possibility of a private equity buyout. Several strategies were considered, including expanding the business into the outdoor amusement park industry and competing directly with the likes of Six Flags and Cedar Fair. Underlying this was the question of how to better align the high fixed asset costs and 12-18 month reinvestment cycle with an increasingly shorter and sporadic consumer purchasing cycle driven by weather variability.
Ultimately, the company doubled down on the indoor segment, expanding the hotel capacity of existing locations and building covered assets in markets where outdoor parks were increasing infeasible. In doing so, they also repositioned their brand towards more stable customer segments such as corporate clients and families, and began introducing year-long season passes at discounts in order to improve revenue predictability. Furthermore, the company took a page out of the broader amusement park playbook and began expanding into off season sources of revenue to limit the reliance on the summer holiday season.
During this period, the company also began to see increased scrutiny from municipalities around water usage and conservation. It instituted Project Green Wolf and appointed a Green Officer at each park location. These officers reported directly to the COO and were assessed against specific sustainability metrics. By 2011, each location operated as a closed loop system, using advanced filtering, osmosis and recycling techniques to limit evaporation in the water parks and reduce water consumption in their hotels in everything from showers to laundry services. This allowed the company to expand into regions where water rights were of concern, and helped position the company as a partner to the community with minimal negative externalities. 
In 2012, Great Wolf Resorts was acquired by Apollo Global Management for $703M, and subsequently in 2015 by Centerbridge Partners for $1.35B. 
 Phone interview with Nikki Nolan, former Non-Executive Director and EVP & Managing Director of Global Business Development at Great Wolf Resorts, on November 1, 2016.
 IBIS report on Water Parks, September 2013.
 Phone interview with Meg Crofton, former President at Disney Parks & Resorts, on November 3, 2016.
 Reuters, “Centerbridge in $1.35 billion deal for Great Wolf Resorts”, March 24, 2015.
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