Waterpark

Appendix H
Scarborough Waterpark Feasibility Study
March 2014
Leisure Development Partners LLP
leisuredevelopment.co.uk
Contents
Introduction, concept and disclaimer.....................................................................................................6
Introduction ........................................................................................................................................6
The Project/Concept ...........................................................................................................................6
Disclaimer............................................................................................................................................7
Site Analysis & Regional Context ............................................................................................................9
Introduction ........................................................................................................................................9
The Site ...............................................................................................................................................9
Regional Context...............................................................................................................................10
Available markets....................................................................................................................................6
Introduction ........................................................................................................................................6
Available markets................................................................................................................................6
Resident market size.......................................................................................................................6
Resident market characteristics......................................................................................................8
Tourist market.....................................................................................................................................9
Tourist market size..........................................................................................................................9
Summary and Implications ...............................................................................................................12
Waterpark Overview & Trends .............................................................................................................13
Introduction ......................................................................................................................................13
Evolution of the Waterpark & Overview ..........................................................................................13
Visitor Origin and Market Penetration at Waterparks .....................................................................15
Indoor Waterparks........................................................................................................................15
Outdoor Waterparks & Resort Waterparks ..................................................................................16
Revenues...........................................................................................................................................17
Cost of Goods Sold ............................................................................................................................18
Operating Expenses ..........................................................................................................................19
Summary and Implications ...............................................................................................................20
Revenue Forecast..................................................................................................................................21
Introduction ......................................................................................................................................21
Attendance & Markets......................................................................................................................21
Market Penetration and Attendance............................................................................................21
Admission and Revenues ..................................................................................................................23
Per Capita Spend...........................................................................................................................24
Other Revenues ............................................................................................................................25
Implications.......................................................................................................................................25
Physical Planning...................................................................................................................................26
Design Day Assessment ....................................................................................................................26
Food & Beverage and Retail..............................................................................................................27
Parking ..............................................................................................................................................28
Operating Expenses and Profit & Loss ..................................................................................................30
Introduction ......................................................................................................................................30
Staffing Requirements ......................................................................................................................30
Full Time Management Team .......................................................................................................30
Part-Time & Seasonal Team..........................................................................................................30
Other Operating Costs ......................................................................................................................31
Cost of Goods Sold ........................................................................................................................31
Marketing......................................................................................................................................31
Repairs & Maintenance.................................................................................................................32
Administration & General .............................................................................................................32
Water, Energy and Utilities ...........................................................................................................32
Insurance, Rates and Other Costs.................................................................................................32
Pre-Opening Expenses ..................................................................................................................33
Rent...............................................................................................................................................33
Reinvestment ................................................................................................................................33
Financial Appraisal ............................................................................................................................33
Financial Bases Tables...................................................................................................................34
Profit & Loss & Implications..............................................................................................................37
Appendix ...............................................................................................................................................42
Introduction, concept and disclaimer
INTRODUCTION
Leisure Development Partners LLP (LDP) is a specialist firm in leisure real estate economics and
operational advice. We work worldwide for new and existing leisure and entertainment projects to
help them achieve economic viability. Our experience includes all forms of leisure real estate, from
visitor attractions, to sports and music venues, resorts and retail & entertainment developments.
LDP have been commissioned to provide market research, analysis and a feasibility study for a
proposed waterpark to be located in the North Bay area of Scarborough. In this report we outline a
waterpark overview and trends, available markets and our financial forecasts and feasibility
assessment.
The report and analysis has been overseen and carried out by Michael Collins and James Kennard,
respectively Senior Partner and Partner in LDP. Frea Nunn, Research Coordinator, has led the desk
based data gathering exercise.
THE PROJECT/CONCEPT
The concept we have tested is for a class leading largely indoor waterpark with an exciting mix of
slides, pools and activities. Plans and drawings were shared with our team and have been used to
inform our understanding of the concept and subsequent analysis. Our scope of work does not
include capital cost analysis and we have assumed the allocated budget is sufficient to deliver the
project as described to us. Our own sense check of this suggests that is likely to be the case.
Based on discussions with the project team, potential operator, developer and on our review of the
plans, it is clear that the intent is to provide a high quality, dynamic experience with a number of
compelling signature elements which will help market the park and drive repeat visits. Indeed given
relatively modest local resident markets it is imperative that the waterpark drive day trip visits as
well as visits from tourists staying in Scarborough and nearby. Scarborough is already well
established both as a day trip and overnight destination and we feel that the waterpark will benefit
from this, as well as providing a new reason to visit or to revisit for lapsed visitors.
Our assumptions and forecasting rely on the promised quality being delivered and on extremely
effective marketing and operations.
The plans include some outdoor elements as well as outdoor expansion (including further significant
outdoor attraction elements) and we feel this is wise. While it is extremely important to offer
climate controlled indoor space in this climate, during fine weather visitors naturally want the
chance to go outside.
We are pleased to see that reinvestment and expansion have been considered from the off with
reinvestment built in to the development agreements and plans for compelling additions. As
discussed later in this document, reinvestment is of paramount importance and generous budgets
are allocated for this within our later forecasts.

London, United Kingdom
The plans include a spa element which we view positively as this will help the attraction appeal to a
broad cross section of the population, providing an attractive element for parents and grandparents
visiting with children and for independent adults. We view the spa alongside other indoor elements
as particularly important drivers of low season usage.
The waterpark plans for the first phase illustrates a high octane attraction with signature thrill rides
(which will address older children, teens and adventurous adults), more accessible features for the
whole family, waterplay for younger guests, spa for adults, lounging and dining space. In our view it
provides for a very complete offer as compared to most UK waterparks. This mix of active, passive,
thrill and spa elements should combine very effectively to address a wide age range, while the
inclusion of outdoor space, helps deliver wider seasonal appeal. In Scarborough, but also around the
UK, there is increasingly a trend for grandparents to have short breaks and day trips with children,
often while parents are working and as such the age range within many visitor groups covers a wide
span. We view the concept as forward thinking and well matched with the market.
Some previous UK waterparks have failed to provide visitors with enough content to justify a long
length of stay (an attribute which encourages spending and provides for a strong perceived value).
In some cases waterparks have been conceived as municipal style pools with a couple of basic slides,
little space for lounging and relaxing and poor presentation. They have also often lacked attractive
food and beverage and retail elements. Our discussions with the project team have provided
comfort that all of these aspects are primary considerations and are addressed both in planned
design and operating approach. Our analysis assumes an average stay of 3.5 hours is achieved and
that the food and beverage provision is of a high quality.
We understand that Alpamare is to be the operator and we view this positively as they have good
experience and quality of offer. Our analysis assumes that Alpamare (or an equivalently experienced
operator) operates the park to the high standards we would expect. A couple of UK waterparks have
arguably been poorly managed and have suffered for this, gaining reputations for poor upkeep and
service. We view the decision to attract a highly reputable and experienced operator as of
significant importance.
DISCLAIMER
This report is based on estimates, assumptions and other information developed by Leisure
Development Partners LLP (LDP) from its independent research effort, general knowledge of the
industry and consultations with management at various businesses and stakeholders near the site
and other comparable developments elsewhere. No warranty or representation is made by LDP that
any of the projected values or results contained in this Report will actually be achieved.
All intellectual property rights in this Report including any forecasts, benchmarks, spreadsheets,
tables or other materials provided are the property of LDP. You may use and copy such materials for
your own internal use.
Unless required by law, you shall not provide this Report to any third party without LDPs prior
written consent, which LDP may at its discretion grant, withhold or grant subject to conditions.
Possession of this Report does not carry with it the right to commercially reproduce, publish, sell,
hire, lend, redistribute, abstract, excerpt or summarise this Report or to use the name of LDP in any
manner without first obtaining the prior written consent of LDP.

Leisure Development Partners LLP P a g e |7
Site Analysis & Regional Context
INTRODUCTION
This section of the document provides a review of the proposed site for the waterpark. Clearly the
positives and negatives associated with the site are well known to the client team but this provides
an independent overview of the suitability of the site to this kind of development.
Two LDP Partners visited the site and surrounding businesses and feel that it is extremely well suited
to a development of this nature. This section reviews our qualitative findings in relation to the site.
Scarborough is among the best of the UKs seaside day trip and tourist destinations, with a wide
range of accommodation at different price points and quality levels in a town with striking
topography and excellent beaches. Having worked in a number of major British seaside towns in
recent years (including Blackpool, Margate, Hastings, Brighton, Barry) Scarboroughs tourism
infrastructure feels very complete and the town well cared for.
The North Bay area of Scarborough is an attractive destination for tourists and is easily accessible for
tourists staying elsewhere in Scarborough or residents. The site takes a prominent and visible
position and is among a cluster of leisure and entertainment focused uses. The plans for further
accommodation will enhance the on-site population, further strengthening this position.
The North Bay area is becoming increasingly strong in terms of its accommodation provision and
plans surrounding the waterpark are set to accelerate this. The Sands development offers an
alternative and high quality accommodation offer and the open air theatre has a proven track record
of adding animation with big name events. We feel the waterpark has an excellent fit in this area
and is readily accessible to all visitors.
THE SITE
Our typical check list when reviewing the suitability of sites for developments of this nature consists
of the guidelines illustrated below. While not all are relevant in every situation, it is desirable to
achieve a significant proportion of the following criteria.
The site should:
Have direct access to/from a major road and a major public transportation link.
Have strong regional transport links by road.
Be within easy access of a significant resident market base.
Be proximate to tourist markets and various forms of tourism accommodation.
Be of a size and scale to allow the creation of a critical mass of activity required to generate
attendance, or be in a location that benefits from the interest generated by other attractions
and/or passing traffic.
Be large enough to develop sufficient on-site parking.

The size and shape of the site should be sufficient to account for the planned program and
allow for a suitable flow from element to element.
Be as flat as possible to minimize ground-shaping infrastructure costs.
Be in a location where surrounding land uses are compatible with leisure development, i.e.
not heavy industry or dense primary residential development.
Be in single ownership or require purchase negotiations with few current owners.
Be in an area with a positive image and in proximity to other complimentary visitor

attractions or natural features.
Not be bisected by any significant natural or man-made features such as rivers, canals,
pipelines, power lines, roads or railway lines.
Not include areas of significant scientific, ecological or environmental importance.
Figure 1 assesses the site in light of these criteria, scoring the site on a 1-10 basis (1 being very weak
and 10 being very strong), and then weighting the criteria according to importance to this particular
project.
Access to the site is extremely good from within Scarborough and Scarborough is well connected by
rail to hubs such as York with fast inter-city connections. As shown, accessibility to major and
regional road links, and accessibility to quality public transport all score relatively highly.
The site has relatively modest resident markets but by contrast, the tourists market, although not
large compared to some cities, is of a good size and is highly localized around the site area. The site
also scores very highly when considering scale and topography: the site is more than sufficient and
has capacity to allow for sufficient development and flow between uses and car parking. The site is
also flat, which is ideal for this type of development. The site is highly visible and extremely
strategically located close to accommodation, the open air theatre, the Sea Life Centre and beach, all
of which are synergistic.
From our perspective there appears to be relatively few man-made features which are likely to
impede development or connectively at the site, and we are not aware of areas of issues which
make the site unsuitable for this type of development.
Having scored the site according to this range of criteria and weighted these criteria to reflect the
concept, we have given the site a score for attraction development of 127 of out a possible 150 - a
very high score reflecting a strong site for this project.
REGIONAL CONTEXT
Appendix Figure 1 illustrates a broad cross section of the attractions and leisure businesses
operating in the area. There are a number of wildlife attractions including the Sea Life Centre
located very close to the site, as well as the heavily invested The Deep aquarium in Hull.
Entertainment attractions include a number of golf, play and entertainment centres, as well as
Flamingo Land, although this is some distance and we would view this as complementary to the

Leisure Development Partners LLP P a g e | 10
waterpark, with both helping cement the wider destination for families. There are several heritage
related attraction elements.
In general there is a clear gap in the market for high quality water leisure following the closure of the
Atlantis Waterpark. These regional attractions inform our later pricing analysis and our view on the
competitive environment.
We have reviewed market penetration rates for the most comparable regional visitor attractions
(including the Sea Life centre which is located close by and Flamingo Land). These are both
successful attractions, with Flamingo Land being the clear market leader. In general terms the
waterpark is complimentary to these attractions and together they help create the wider
destination.
Appendix Figure 2 provides attendance context for leading paid-entry attractions in the region. We
note, however, that attractions are not obliged to share this information. We have data which we
cannot publicly share on a number of other attractions which would make this top ten if they were
to share information.
This does illustrate the drawing power of Flamingo Land, a quality entertainment-focused attraction
which appeals to both residents of the region and day trip and overnight tourist guests. While
waterparks tend to penetrate markets at a lower level than theme parks, we have been able to use
penetration information to provide a view of relative performant for our later analysis.

FIGURE 1 SITE ASSESSMENT FOR THE SCARBOROUGH WATERPARK
Weak Strong
Weighting 1 2 3 4 5 6 7 8 9 10
1 Accessibility to major road links 1.0 X
2 Strength of regional road links 1.0 X
3 Accessibility to major / quality public transport 1.0 X
4 Access to a significant resident market base 1.5 X
5 Proximity to tourist markets and accommodation 1.5 X
6 Size and scale of development / critical mass of entertainment 1.0 X
7 Adjacency of other attractions / developments that drive passing footfall 1.0 X
8 Capacity to develop sufficient on-site parking 1.0 X
9 Capacity to allow the planned programme and flow between elements 1.0 X
10 Flatness of site to minimise ground-shaping infrastructure costs 1.0 X
11 Compatibility of adjacent land uses i.e. not heavy industry 1.5 X
12 Ownership and ease of purchase negotiations 1.0 X
13 Image of immediate area and proximity to complimentary uses 0.5 X
14 Impediment by natural or man-made features e.g. rivers, power lines 0.5 X
15 Presence of significant scientific, ecological or environmental importance 0.5 X
Source: LDP

Available markets
INTRODUCTION
In the following section we evaluate the size and profile of the available off-site markets for the
proposed waterpark. Normally attendance levels at visitor attractions are a function of a range of
factors including: the size and characteristics of available resident and tourist markets; the extent
and nature of competitive facilities; and the quality, marketing and management of the developed
components. In this section we investigate the size and profile of the off-site available markets.
Given the close proximity to accommodation to be developed around the park there will also be an
effective on-site population, for which it will be extremely easy to visit the waterpark. We have not
analysed this separately as to do so could risk double counting.
AVAILABLE MARKETS
Resident market size
We have measured the available markets based upon drive-time isochrones. Waterparks tend to
draw the bulk of visitors from within 60 minutes, with the most local residents visiting more often.
Larger, more heavily invested waterparks have proven able to draw day visits from up to two hours
away.
Given Scarboroughs proven day trip success, the critical mass of its day tourism offer and the scale
and expected quality of the waterpark it is reasonable to review a two hour market. Given
decreasing propensity to visit as drive-time increases we have subdivided the resident market 0-60
minute and 60-120 minute drive-time segments. Those people visiting the site but who live more
than two hours from the site are likely to stay in the area overnight and are thus considered in the
domestic tourist market.
Figure 2 demonstrates the extent of the various drive-time isochrones. As shown, the two hour
market reaches Sheffield, Darlington and Sunderland. More importantly York as well as other
important seaside locations such as Whitby and Bridlington can be reached within the hour.

FIGURE 2 DRIVE TIME MAPS
Source: LDP and MapPoint
Figure 3 summarizes the available resident markets. In 2014, the estimated total population within
two hours of the site is projected to be approximately 6.8 million. The 0-60 minute drive time
accounts for only approximately 440,000 and the secondary market the remaining 6.4 million. The
primary market is small but the secondary offers a significant opportunity, although clearly
significant marketing budgets will be required to communicate with them. In terms of perception,
some large population centres within the secondary market are on the edge of an hour.
The challenge of a modest primary market effects many seaside towns around the British coast and
strong attractions must have the drawing power to drive more distant visits and clearly to address
the tourist markets.
To forecast future populations we have utilized official population projections. All market segments
are expected to see a relatively modest annual growth in the population over the next 10 15 years,
at around 0.8 percent per annum.

FIGURE 3 AVAILABLE RESIDENT MARKETS
Market Size (000s)
Market category Catchment Size 2014 2016 2018 2019
Primary 0-60 minutes 438.9 446.0 453.2 460.4

Secondary 60-120 minutes 6,383.9 6,486.4 6,590.6 6,696.5
Total residents 0-120 minutes 6,822.8 6,932.4 7,043.8 7,156.9
Source: LDP, MapPoint, Ons
Resident market characteristics

The age profile of the residents within the catchments is fairly unremarkable by Western Europe
standards and the population is expected to slowly grow older in the future. As a part of our
analysis we reviewed 2011 census data for Scarborough, North Yorkshire, the North East and
England to make comparison and sense check points of differentiation from comparable waterparks
available population.
In general, the resident catchment market is similar to England as a whole in terms of age profile
with a slight bias towards older rather than younger residents (the same can be said of the North
East which is broadly representative of the two hour market). There are proportionally slightly
fewer children and a bias towards older residents. While this is not uncommon in seaside locations
which are often considered attractive retirement locations, we note that it is true of the wider
region. We provide an age profile chart as Appendix Figure 4. A similar profile is seen in several
other locations with strong performing coastal waterparks in the UK (which are included in our
benchmarking comparables for market penetration).
As discussed elsewhere in the document, the waterpark plans include lounging and spa elements
which are well placed to appeal to older guests (and proven to do so in certain waterpark case
studies we have reviewed, such as Tropical Islands in Germany, where a spa has proven an
extremely popular addition with older guests). The UK population is ageing and the grey market is
increasingly important to visitor attractions and has proven to include generous spenders,
particularly when visiting with their grandchildren. We feel the waterpark offer is well balanced to
address multiple market segments including older guests.
Relative wealth of residents plays in to pricing decisions. As shown in Figure 4, the average weekly
household income around the study is modest compared to some areas, particularly towards the
major conurbations. This suggests that nearby residents may be value conscious and clearly it will
be important to make the attraction accessible for them. Low entry fee offers during the shoulder
season could be one example strategy. We note that within the one and two hour market there are
some pockets of relatively high income households which is encouraging. Household income is a
useful gauge of spending power which in turn is important factor when looking at potential demand.
In our later pricing analysis and per capita spend analysis we have considered the spending power of
local residents and have assumed healthy levels of discounting will be employed to attract them,
particularly in the shoulder seasons. That said, some of the UKs price leading attractions are in
markets with relatively low disposable income locally and have found that families are willing to

spend for occasional high perceived value days out. We do still take a prudent view in our later
assessment.
FIGURE 4 ESTIMATED AVERAGE WEEKLY HOUSEHOLD INCOME, BY MSOA, 2011
Source: Neighbourhood Statistics
TOURIST MARKET
Tourist market size
The tourist market will also provide an important source of visitors to the proposed development
and in our view the waterpark will become a key marketing message for Scarborough tourism,
alongside the resorts many other positive attributes. Tourists generally travel for up to a maximum
of one hour from their holiday base when visiting attractions. Therefore, we have defined the
tourist market as comprising people staying away from home in locations within one hours drive
of the site.
In our work we have found that it is extremely rare for tourists to travel more than one hour from
their holiday accommodation for day out entertainment and leisure amenities. As such, to look at a
broader market definition would likely significantly overstate potential demand. We typically
subdivide the market into domestic and international tourists as behaviour can vary between these

groups, but in reality international tourism is very modest and as such we are viewing a largely
domestic market.
Such a market definition allows comparison of market size and potential at the proposed project to
existing leisure developments and attractions around the world (and is critical if we were to proceed
with a penetration analysis).
Based on the provided catchment market isochrone for 0-60 minutes, we have weighted tourist
arrivals and overnights (the overnights weighted figure is used to compute the weighted length of
stay shown in Figure 5) for individual areas within Yorkshire and Humber to include all areas within a
60 minute drive. This unqualified market includes guests staying in hotels, serviced accommodation,
self catering and camping and caravan sites. The most recent complete figures are up to and
including 2010.
In Figure 5 we summarize the available tourist markets. As shown in the table, before we have
qualified the markets and the total projected tourist market in 2010 equaled just less than 2.9
million tourists. This was a significant increase on the 2008 figure and represented a low point
during thedownturn.
The average length of stay across the 60 minute market was 3.2 nights in 2010. Anecdotal evidence
suggests within Scarborough itself many guests stay a full week or more, while others are enjoying a
weekend visit. A stay of several days certainly allows time for attractions visits. A particularly
encouraging factor is that in 2010, 74 percent of overnight tourists in the market were holiday
makers, which is high relative to many other locations in Britain and reflects a market dominated by
leisure visitors.
Prior to applying market penetration rates to the market, it is imperative that we qualify the
available markets to remove tourists staying within the catchment market area who also live
within the resident market. This step is undertaken to prevent them from being double counted
when forecasting attendance, and missing this step has the potential to significantly overstate
potential demand.
Those found to live within the two hour resident market were removed from the forecast. This step
includes the removal of domestic tourists (e.g. UK tourists who live within the two hour resident
market but also go on holiday within the one hour tourist market).
Our review of available statistical data highlights that around 41 percent of total visitors to
Scarborough are from Yorkshire and Humber. However, this includes the many day visitors from the
market who are excluded from this analysis as we have reviewed overnight guests only, as such we
need only exclude the overnight guests from Yorkshire and the Humber which total 20 percent.
The qualified tourists markets for 2008 to 2010 are also provided in the figure and illustrate around
2.3 million arrivals in 2010. This means 2.3 million guests who stay within one hour of the site and
who do not live within the resident catchment markets (for the avoidance of doubts this is a
headcount not overnights). It is this assessed figure (and the future forecasts of it) which market
penetration rates for tourism are applied to. This is intended to ensure no double counting and a
fair assessment.

We have reviewed some strategy information relating to the growth of tourism in Scarborough and
the surrounding area and feel positive steps are being taken to grow demand and ensure that
Scarborough enjoys continued success. That said, we feel it wise to take a conservative growth and
within our financial modelling have allowed only 1 percent annual growth. Our forecast suggests
almost 2.4 million qualified visits by 2018 and growth towards 2.6 million over the longer term. We
would hope that this could well be exceeded but feel this allows for prudent forecasts. It is these
forecast markets which are utilised within our later financial assessment.
FIGURE 5 AVAILABLE TOURIST MARKETS

Market Size (000s)
Market category Catchment Size 2008 2009 2010
2,661 2,814 2,847

0-60 minutes
Unqualified market - arrivals
Average Length of Stay 3.39 3.44 3.24
Percentage Holiday Makers 69.5% 71.9% 74.0%
2,134 2,257 2,283

Qualified market - arrivals 0-60 minutes
Source: LDP
Scarborough attracts a very wide cross section of tourists, performing well with families, with older
guests and offering a wide range of accommodation in both typology and price point. As well as
reviewing official statistics, we have been provided with a number of papers relating to tourism
strategy and have discussed tourism with several operators of accommodation within Scarborough.
Our research highlights the diverse array of visitors to the market with a broad age range of guests.
The family market is strong and spikes during school holidays while there is also strong grey market
support throughout a wider season. Anecdotal evidence highlighted a growing number of older
tourists travelling with grandchildren.
According to the Visit England Seaside Tourism Survey for 2012, Scarborough is the top ranked
seaside destination in terms of overnight tourist trips, having overtaken Blackpool in recent years.
The same survey highlights the broad spread of holidaymakers visiting seaside destinations like
Scarborough, with C1s and ABs both contributing an equal 29 percent of visits to seaside
destinations and C2s an additional 22 percent.

As with most markets, the ageing population, improved health and attractive disposable income of
the grey market are factors in Scarborough. Alongside this there is the emerging trend for extended
families to travel together in multi-generational groups. In our view the waterpark offer described
to us is well suited to this emerging environment since it provides the high octane thrills demanded
by younger guests but also lounging, spa and quality food and beverage provision demanded by
parents and older guests.
Our discussions highlighted a high degree of loyalty amongst many Scarborough visitors, with many
repeating regularly. There is a very broad range of accommodation available to guests including
branded hotels, more traditional hotels, bed and breakfast, self-catering and a variety of camping,
recreational vehicle and caravan parks. The availability of quality accommodation aimed at very
different market segments has resulted in a wide range of visitors in terms of socio-economic profile.
Scarborough tourism is highly seasonal and this is something that those in strategy are trying to
address through programming and marketing. Clearly the underlying pattern of a summer peak is
likely not to change but efforts can bring guests during other times of year. The waterparks indoor
and spa elements will help play their part in making a visit during poor weather more appealing.
Within our benchmarking analysis we review a tourist market of only those guests staying overnight
as day trip visitors will invariably also be counted within the resident market (or drive in excess of
four hours round trip for a day out which is a rarity). While this is important in terms of
methodology, we have also endeavored to understand the buoyant day trip market to Scarborough.
As well as being a leading tourism resort for overnight guests, Scarborough is very well established
as a day trip destination and figures from the 2012 Cambridge Model Volume and Value Report
suggest as many as 6 million day trips within Scarborough District. While this figure does not directly
feed into our analysis, it supports the findings from our local research which highlight that
Scarborough is a regular day visit destination for many residents within two hours and supports our
penetration assessment of the secondary resident market. The waterpark programme will provide
another reason to visit and repeat for this already loyal market. It will also help encourage new and
lapsed visitors to come to Scarborough.
SUMMARY AND IMPLICATIONS

The primary resident market is modest in size, with the secondary market being of a generous scale,
highlighting the importance of generating visits from distant markets. However, Scarborough is a
proven day trip as well as tourism destination and is perceived as the coastal day out of choice for
many cities and towns in the region. The tourist market is relatively large and heavily leisure biased
and, along with day trips, represents a solid opportunity for the waterpark.

Waterpark Overview & Trends
INTRODUCTION
In this section we review the performance and characteristics of water attractions, including more
typical waterparks and more niche water attractions which include beach and surf components.
EVOLUTION OF THE WATERPARK & OVERVIEW

The modern waterpark emerged in the late 1970s when leisure developers in both the private and
public sectors recognised the broad popularity of water recreation and developed a concept linking a
number of water attractions in one gated park. This waterpark concept evolved rapidly from simple
slides and pools to the present product offering, which often consists of a broad mix of attractions,
with waterparks increasingly evolving and differentiating their offers. Of late, additions such as
beaches, surfable waves, flowrider surf simulators, master blaster water coasters and ever more
extreme slides have further pushed the boundaries of waterpark design.
These waterpark facilities have proven over time to be both popular and profitable when compared
to some other forms of more capital intensive attractions. Waterparks typically incorporate slides
and flumes balanced by more passive swimming and sunbathing/lounging experiences as well as
eating and drinking facilities, which help to increase length of stay and improve economic
performance.
As with all attraction types, the longer the duration of stay, the higher the price which can be
charged and the greater the level of secondary spending. However, as much of the time spent at
waterparks is rather passive, for example sunbathing or swimming, spend per hour tends to fall
below other attraction types.
Many waterparks derive the majority of their attendance from the local resident base, typically
within a one hour drive, although others are more resort guest focused as is anticipated in this
situation. Due to the dependence on the local market for some parks, repeat visits are typically
important, with implications for both pricing and reinvestment requirements. As with theme parks,
waterpark owners must regularly reinvest in their facilities to ensure ongoing appeal to resident
markets and to generate repeat visits from their primary population bases. Manufacturers and
suppliers of equipment for waterparks constantly innovate to satisfy this need for new experiences
and costs associated with waterpark capital items have grown significantly over the past twenty
years.
Resort waterparks located in strong tourist markets which derive significant visits from domestic and
international tourists can face reduced pressure to provide new experiences each year and
reinvestment can be somewhat lower. This is a pattern we have seen in high volume tourist
locations on the Spanish Costas for example. In Scarborough, there are high repeats amongst
tourists and also a definite need to generate repeat visits from residents and day trippers and as
such, refreshment is a critical element of the business model.
As the country where waterparks originated in the 1970s, the U.S. has a mature and well developed
waterpark market. However, growth in the development of waterparks slowed during the late

1980s as markets became saturated. Recently though, a new phase of development has taken place
where waterparks have been developed successfully as second gates at regional theme parks, or as
fully themed experiences, with investment levels closer to that of a theme park, such as the
waterparks to be found in Orlando. Internationally, this level of theming and finish was recently
inaugurated in Abu Dhabi at Yas Waterworld which joins Wild Wadi and Aquaventure in Dubai as
among the best and most heavily invested recent waterparks. These offer a full waterpark
experience in a highly themed environment, with dedicated and specialised retail facilities and food
and beverage to complement the offer.
In addition, a new, high quality indoor waterpark product has emerged in the formerly under
developed northern US markets. These parks have seen more intense experiences and better
presentation within an indoor park setting (often associated with accommodation). The ability to
mitigate against poor weather while still providing a compelling product has opened up new
markets. This new breed of indoor park is often built as a core component of resort hotels. Located
primarily in the Wisconsin dells (Great Wolf etc.) these waterpark hotels have successfully driven
tourism and established new weekend destinations that cater to regional residents as well as
corporate groups.
Waterpark development in Europe has seen growth over recent years and Spain, which saw
significant growth in the 1980s and early 1990s, is amongst the most developed markets. The
Southern European waterpark offer is typified by outdoor regional waterparks, many of which are in
strong tourist markets.
In Northern Europe, indoor water leisure offers are more typical. The indoor waterparks in Germany
and the U.K have often lacked quality and intensity and in some cases have struggled to repay
capital. Many were public sector lead projects associated with municipal leisure centres and
provided little more than a pool with a few slides. There are a few examples of innovative indoor
projects, such as Splash Landings at Alton Towers, a themed waterpark with extensive water play
features, constructed as a component of one of the hotels at the Alton Towers resort and as a
second gate for the theme park. There are a new generation of indoor waterparks with a few
notable examples built and more in planning. This project is similar in that it embraces a level of
intensity of experience and plans to provide a pleasant and fun environment which will encourage a
long length of stay.
Costa Caribe which opened at Port Aventura in Salou was constructed to provide additional content
alongside the theme park and resort offer, as per Splash Landings. This is one of Europes best
parks, if somewhat small given its potential, with extensive theming and some major signature water
rides such as a Master Blaster.
The higher end water offers in Europe have begun to expand and differentiate their offers with the
addition of standing waves (flowriders) and major slides such as the Master Blaster water coaster.
PRINCIPAL CONCEPT TYPES SUMMARY

Waterparks are a diverse attraction industry segment with many different forms which have
variation in terms of scale, capital, weatherization, activities and other factors.
In climates such as Northern and Western Europe, the indoor waterpark is the most typical
concept type, but within this there are several forms. Many have been swimming pools with

a handful of slides, presented as municipal pool plus. These tend to be relatively cheap to
visit but also have a low perceived value. At the higher end of the industry, indoor
waterparks have comprehensive slides, waterplay and even signature elements such as lazy
rivers, master blaster water coasters and themed waterplay these offer a longer stay and
higher perceived value and are the segment most relevant to the Scarborough Waterpark.
Themed outdoor waterpark - heavily themed, outdoors and located in major tourist markets
(e.g. Orlando), these parks are at the forefront in terms of capital expenditure, attendance
and revenues.
Outdoor regional waterpark - typically built in locations with good climates and often in
tourist areas, these tend not to be heavily themed but offer thrilling slides, family slides,
waterplay and lounging areas.
Indoor waterpark hotels - these all inclusive waterpark concepts have developed in the US
primarily in areas of inclement weather such as the Wisconsin Dells, and have proven
integral to a developing tourism industry.
VISITOR ORIGIN AND MARKET PENETRATION AT WATERPARKS

Indoor Waterparks
Market penetration rates for a cross section of indoor waterparks are shown in Figure 6. As with all
our reporting we show ranges and averages as this information is considered confidential by
operators and this ensures they remain willing to share their data with us.
For most indoor waterparks primary resident market penetration is by far the highest of any market
segment. The majority are not in resort areas and have a more resident focus (often with
significantly larger primary resident markets than available in Scarborough. Two extremely high
performers achieve around 15 percent, one is large scale and heavily invested (although now
somewhat dated) and the other is in a modest market with little competition (as is the case for the
Scarborough primary market).
For the secondary market we see a significant drop off in penetration for almost all parks, highlight
decreasing propensity to visit and repeat visit as drive time increases. Most parks achieve between
0.5 percent and 5.0 percent in this segment with only a few outliers. Several achieve in the region of
2 to 3 percent.
Among typical indoor waterparks located in cities or other non-resort locations, tourist penetration
is often modest with an average of just one percent of tourists within an hour and several achieving
around two to three percent. A UK waterpark in a heavily tourist orientated market but with intense
competition for leisure spending achieved towards the top end of this range.
Although excluded from this Figure due to their resort accommodation links, penetration rates
amongst the indoor waterpark hotel examples such as those in the Wisconsin Dells and Alton Towers
tend to be much more skewed towards tourists as they are actually the tourism driver and linked to
guest nights. While in absolute terms penetration is not always higher, the visitor mix tends to be
more tourist biased. We review resort orientated waterparks in the next segment and these are
also an important benchmark set given Scarboroughs resort focus.
For more resort focussed waterparks the majority of guests still come from the broader region (3-4
hours from the site) as they are often weekend destinations. Costa Caribe at Port Aventura (which is

mostly outdoors but has an indoor area) achieves a high percentage of international visitors given
the visitor mix in its hotels driven by the theme park and its nature as a second gate to the park.
FIGURE6 MARKET PENETRATION FOR SELECTED INDOOR WATER PARKS
Primary Secondary Domestic

(0-60 min) (60-120 min) (0-60 min) International
Max 15.2% 12.6% 2.8% 0.9%
Min 1.5% 0.4% 0.1% 0.0%
Median 5.1% 1.3% 0.6% 0.0%
Average 6.7% 2.5% 1.0% 0.2%
Source: LDP
Outdoor Waterparks & Resort Waterparks

Most waterparks are resident biased, particularly typical indoor parks. In tourism resort destinations
some perform well with tourist market segments. Those that are able to target tourists in significant
numbers are located in very strong tourist markets and are typically within a couple of minutes of
leisure orientated hotels, resorts and beaches.
Despite the strong performance of some of the parks in their tourist markets, resident market
penetration rates are typically higher than tourist market penetration rates with an average of
around seven percent as compared to two percent and slightly less than three percent in the
domestic and international tourist market respectively. This illustrates that although some of the
parks are tourist focused, take up among tourists is still relatively modest, with parks requiring large
markets.
Resort orientated waterparks linked with accommodation have a slightly different penetration of
tourist as they get a good majority of their visitation from on-site guests. Typically they achieve 30-
50 percent of total visits from their on-site resort guests. Nevertheless, they are still able to achieve
strong penetration rates of the regional resident markets.
The following chart (figure 7) shows levels of penetration amongst the varied types of waterparks.

FIGURE 7 WATERPARK MARKET PENETRATION
Market Penetration
0-60 60-120 Domestic International
US regional waterparks
MAX 50.2% 11.4% 9.0% 0.9%
MIN 1.4% 0.5% 0.1% 0.6%
MEDIAN 8.0% 1.1% 1.8% 0.8%
AVERAGE 11.9% 3.2% 2.8% 0.8%
US waterparks including destination parks in Orlando

MAX 61.1% 11.4% 9.0% 6.1%
MIN 1.4% 0.0% 0.1% 0.4%
MEDIAN 7.6% 0.7% 1.8% 2.2%
AVERAGE 12.3% 2.1% 2.6% 2.5%
European Water Parks

Maximum 16.50% - 4.90% 9.60%
Minimum 3.70% - 0.40% 0.40%
Median 7.20% - 2.00% 2.80%
Weighted Average 6.80% - 2.10% 3.50%
Resort Water Parks 13-15% 4-6% 0-5% 7-11%
Source: LDP
REVENUES
Revenues from waterparks are driven primarily from admission, with the exception of waterpark
hotels where it is often included in the room rate. The following table (figure 8) shows the
distribution of revenues amongst more typical stand-alone waterparks in the Europe and the US.
As shown, admissions typically account for the greatest share of total waterpark expenditures,
representing between 65 and 70 percent at European parks, and a similar, if slightly broader range
of between 59 and 74 percent at US parks. Next is food and beverage, typically accounting for
around a fifth of revenues.
Merchandise comprises on average just one percent of total visitor spending at European parks
largely due to a lack of merchandise outlets, little or no theming or branding, and a high proportion
of resident visitors at these facilities. US parks, which tend to offer a wider range of branded
merchandise and in some cases derive a higher proportion of visits from tourist markets, generate
slightly more revenue from this source but it still represents only a modest income stream.

FIGURE 8 COMPARATIVE PER CAPITA EXPENDITURE LEVELS AT EUROPEAN AND US WATERPARKS
Selected European Waterparks Selected US Waterparks
Category Range Average Range Average
Admissions 65% - 70% 67% 59% - 74% 64%
Food & Beverage 18% - 30% 22% 15% - 22% 18%
Merchandise 0% - 4% 1% 4% - 8% 5%
Other 5% - 12% 10% 6% - 17% 13%
Total 100% 100%
Source: World Waterpark Association, Individual parks and LDP
In cases such as the fully themed Orlando parks, and the recently opened Yas WaterWorld in Abu
Dhabi, retail expenditure has managed to surpass F&B as the variety and quality of the offer has
appealed to tourists as part of the overall experience.
Other miscellaneous expenditures, including locker rentals, tube rentals (for use on certain slide)
and photos can be important, bringing in around a tenth of the total revenue.
Revenues from water sports facilities can vary significantly based on the activities on offer, similar to
adventure sports parks. As they are capacity constrained, pricing and throughput by individual
activity is the norm.
Admission yield is a typical key performance indicator for all forms of visitor attractions and
represents the average spend on admissions expressed as a percentage of the full adult admission
price. In the UK there has been some downward pressure on yields over the past decade or so, with
an increasing expectation of promotions. Yields which were typical in the region of 65-75 percent,
now range from around 55 percent to approximately 70 percent (although some outliers exceed this
range). At the lower end of that typical range, we see some of the large theme parks which have a
high price for peak season with heavy discounting elsewhere. Within our analysis we have assumed
a less aggressive summer season pricing policy.
COST OF GOODS SOLD

The cost of goods sold is a major area of expense at all attractions. The cost of goods sold generally
consists of the purchase of food, merchandise and game prizes. The ratios are extremely consistent
across all attraction types and across the world. Things that might lead to a variation in these figures
might, for example, include the presence of branded merchandise which would push up the

merchandise cost of goods sold up or the large buying power of a major group which can reduce
cost of sales:
Cost of sales for food and beverage at most attractions is generally between 28 and 35
percent of related revenues
o we have seen instances in the mid to high 20s, sometimes where the food offer is
simple, or where buying power is very high, but these cases are rare
o we have also seen very sophisticated food offers, or specialist food offers at as much
as 40 percent , although around 30 percent is very typical
The industry range for merchandising cost of goods is broadly 45 to 55 percent.
o again there is little variation between attraction types
o in general a focus on particularly high quality or branded merchandise can push
towards the upper end of the range and simple souvenirs and confectionary can
sometimes be lower than the illustrated range
OPERATING EXPENSES
Operating expenses within commercial attractions fall in to relatively tight ranges for the most part
but with some variation depending on attraction type. The following Figure 9 shows typical
operating costs as a percentage of revenues. Labour costs always constitute the largest part of
operating costs, followed typically by marketing.
Utilities can be above the range shown for indoor waterparks which consume large amounts of
electricity for climate control, as well as water costs. Maintenance is a factor clearly at all forms of
attraction and particularly those which are hardware dependent. Waterparks tend to have relatively
high costs for the maintenance and renewal of plant and the fabric of their buildings. Slides
themselves compare favourably in maintenance terms to ride based attractions.
FIGURE 9 OPERATING COSTS (MIN, MEDIAN & MAX) AS A % OF REVENUES

45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Staff Marketing Maintenance Utilities Admin & Other
Source: Individual Attractions and LDP
Operating costs among more traditional outdoor waterparks are fairly consistent with theme parks,
with the majority of costs attributable to labour (representing up to 50-60% of total costs). Normally
outdoor waterparks can achieve EBITDA margins of 35-45%.

Operating costs amongst indoor parks are typically higher due to the increased utility costs for
climate controlled environments. Although smaller in footprint than outdoor parks, the increased
utility costs can have an impact on overall profitability. As a result, many indoor waterpark hotels
tend to package many of the operating costs within the overall opex of the hotel. Similar to outdoor
parks, staff costs make up the majority of the costs and need to be built up to reflect the individual
size of the park, throughput and local market labour costs. While municipal and basic indoor
waterparks have sometimes struggled to make reasonable operating margins, more commercial
ventures can achieve significant margins, into the 30s percent and even close to 40 percent EBITDA
margin in strong markets and with solid management.
SUMMARY AND IMPLICATIONS

Waterparks are a diverse attraction industry segment with many different forms with variation in
terms of scale, capital, weatherization, activities and other factors. There are many different types
of waterparks and we feel that this project represents both an indoor and a resort waterpark and is
being planned to provide the increased intensity and quality of service and presentation that is
becoming prevalent across the waterpark sector.
Penetration rates at waterparks in general are easily highest across the primary resident markets,
although resort waterparks tend to achieve strong penetration across the tourist markets. Revenues
at waterparks are primarily driven but admissions, although recent waterpark developments have
provided better food and beverage and retail offers and have succeeded in increasing spend levels.

Revenue Forecast
INTRODUCTION
In the following section we review both the attendance potential and the revenue potential for the
proposed Waterpark. The attendance, which is the primary driver of revenues, is calculated by
measuring the likely capture of the available markets. We have analysed benchmark penetration
rates and the scale of the available markets in earlier sections of this report. Clearly there is a
strong relationship between price and volume and as such we address both of these key drivers in
unison.
ATTENDANCE & MARKETS

The success of any attraction is a function of the scope, scale and nature of the markets there to
support it, as well as other external factors, such as levels of competition, disposable income etc. As
part of the analysis for the project, we have conducted an analysis looking at levels of potential
attendance, based on potential drawing power of the attraction given the markets and levels of
competition.
Market Penetration and Attendance

While there are attractions in Scarborough such as the Sea Life Centre, some amusement rides,
museums, play centers and family activities, we feel that as they largely serve the tourist market and
they are for the most part fairly low key, the addition of the waterpark is likely to strengthen the
overall offer. Other attractions are short stay, with the exception of Flamingo Land which is further
away and a weekend or long stay visitor can enjoy multiple attractions during a single visit.
Figure 10 shows the forecast potential attendance for the waterpark. We have based our attendance
on an opening year of 2016. We discuss what we view as potential stable year penetration rates,
but in the financial model, we have allowed for an evolution of rates typical of new attractions
(often nearby resident uptake enjoys a champagne effect on opening, while more distant markets
take longer to reach full awareness for example).
The penetration rates associated with each market are based on the comparables we reviewed
earlier and other operational examples. We have assumed a penetration rate of 11 percent across
the 0 to 60 minute market which in order to be prudent is lower than the UKs leading examples but
nevertheless represents a strong performance reflecting a relatively small market size and little
relevant competition. Typically penetration is often high in modest markets, where it is relatively
easy to reach people through marketing efforts. To achieve this level it is imperative that the
waterpark is not prohibitively expensive.
Scarborough is a well-established day trip destination for residents beyond an hour drive away and
we feel this relatively large market offers extremely solid potential. We have assumed a penetration
rate of three percent in this market segment. We feel that a great deal of this will come from the
market area just beyond one hour, where this is the natural seaside and waterpark destination of
choice and in terms of perception is only just over an hour drive. To the more extreme boundaries
of this catchment there is more competition for guests leisure spend and we feel demand will be
more muted.

At three percent, the penetration forecast for secondary residents is slightly above average indoor
waterparks but significantly lower than leading examples. We believe with a modern and appealing
offer and given Scarboroughs proven day trip prowess with this market segment, that this is
achievable and could be exceeded if the park is particularly well received.
The site at the core of Scarborough tourism is well placed to attract overnight guests to Scarborough
and elsewhere within the catchment market. Many Scarborough guests will find the waterpark to
be walkable from their accommodation and for all it will be extremely accessible. We feel this
segment offer very strong potential and have forecast what we believe is a conservative 4.5 percent
penetration rate. Within overnight guests to Scarborough itself this will likely be exceeded but as
outlined in the catchment market analysis the available market includes other towns. This
performance exceeds that of the more basic indoor waterparks but is lower than achieved by many
European seaside waterparks and resort focused waterparks.
As seen in figure 10, we estimate potential attendance to range between approximately 300,000 and
400,000 per annum, with the mid-case attendance equating to 350,000. We have reviewed the
client team/operator forecasts and feel that the while the highest scenario is somewhat ambitious
that the worst case should be easily exceeded with the right pricing policy and assuming the quality
of the offer is as strong as described to us. For the purposes of the following financial analysis we
use our medium case.
FIGURE 10 - SCARBOROUGH HIGH MEDIUM AND LOW ATTENDANCE FORECASTS

2016 Low Medium High Low Medium High
Resident
Primary 445,993 10.0% 11.0% 12.0% 44,599 49,059 53,519
Secondary 6,486,442 2.5% 3.0% 3.5% 162,161 194,593 227,025
Total 6,932,434 206,760 243,652 280,545
Tourist
Qualified Arrivals 2,329,393 3.5% 4.5% 5.5% 81,529 104,823 128,117
Total Forecast Attendance 288,289 348,475 408,661
Source: Leisure Development Partners
As a further sense check of the attendance forecasts, we performed an additional analysis

comparing paying visits at theme parks, with paying visits at waterparks operating nearby. In
general terms theme parks, which are far more heavily invested, tend to achieve significantly higher

attendance and penetration than waterparks, which although extremely effective in penetrating
their markets, fall some way behind full theme parks.
We made comparison of parks such as: the Blackpool Sandcastle to the Pleasure Beach, Blackpool;
Disneys Typhoon Lagoon to Disneys Animal Kingdom; Aquabouleveard in Paris to Parc Asterix; and
Alton Towers Waterpark to Alton Towers. We found that the majority fell into a reasonably tight
range with the waterpark accounting for between 16 and 27 percent of the nearby theme parks
visits. Drawing comparison with Flamingo Land and applying the range of 16 to 27 percent suggests
a range of just less than 250,000 to slightly more than 400,000. While this is not as scientific and
nuanced a process as the above penetration assessment in nevertheless serves as an interesting
sense check.
ADMISSION AND REVENUES

Total admission revenues are a function of the perceived value of the experience as well as the
length of stay of the visitor. To gauge pricing and perceived value we use a measure called
entertainment value (EV) this expresses prices on an hourly basis to allow for comparison between
attraction types. The undiscounted adult price divided by the average length of time spent on site
provides the entertainment value or price per hour.
A key reason we review the entertainment value (EV) is to gain an understanding of the current level
of value the average consumer places per hour of entertainment at an attraction. This allows us to
look at other attractions around the country and region and apply our learnings.
In general the longer a guest stays at an experience, the more they are willing to pay for said
experience. However, it is important to note that this is often based on the headline price (i.e. the
perceived price) and not necessarily the amount they spend. The guest has a certain expectation of
the quality and level of the experience and as such will take their perception of value form other
experiences and apply it to this one.
Pricing must match the visitors experience and the link between willingness to spend and average
duration of stay at attractions is extremely strong, with visitors willing to pay more for a longer visit.
It will be critical to balance the price for the entertainment with an appropriate average length of
stay. Based on the most similar comparables and our review of the plans and our discussion with
the project team we feel an average stay of 3.5 hours should be achievable. We are aware that
management plan to exceed this and have discussed sound strategies to do so with us, but we are
taking a more cautious view as an annual average.
We have assumed that the spa is provided within the entry cost and understand this is the planned
approach. There may well be opportunities over time to add up-charge treatments that could offer
upside beyond the revenues calculated here but we have chosen to take a prudent view and have
not included these.
Based on the average EV calculated from a wide range of UK comparables, we would recommend
using an hourly EV of approximately 5.50 in 2014 values. This measure even compares with
commercial leisure activities such as cinemas and bowling. By way of comparison the average EV
for the regional attractions reviewed in Appendix Figure 1 was found to be 5.62 which is just above
the UK current average. Flamingo Land is estimated at 5.83 and Sea Life is estimated at almost

6.50, significantly above our assumption (although this is not uncommon for Merlin attractions
given their discounting policies). While EV at the local attractions is on the high side, there is also a
discounting culture and we reflect this in our later yield calculation.
At current values this would suggest a lead adult price of 19.25. This reflects an average length of
stay of 3.5 hours and if sufficient entertainment content cannot be provided to allow for this then
pricing should be revised downwards. We feel such a price represents an affordable price point. It
may be that this can be exceeded yielding some upside but again we take a prudent view of
potential. Clearly this is the undiscounted, high season adult price and therefore the most anyone
would pay for single day entry. There will also be child prices, group prices, concessions, season
passes and low season discounts all of which will reduce the average paid.
Per Capita Spend

Per capita spend by visitors is a mix of admission as well as other on site spend on items such as
retail, F&B etc. Of this, the revenue from admission normally makes up the largest proportion.
However, admission per capita is not a simple reflection of the lead price mentioned earlier. It
needs to be adjusted to reflect the yield the attraction can achieve. The admission yield measures
the ratio of per capita expenditures on admission to the lead admission price. The yield reflects the
fact that as mentioned many visitors will enter on some form of discounted ticket.
Admission yields typically range from 55 to 80 percent, with an average yield ranging from 60 to 70
percent. In this case, we believe that a yield of 65% would be appropriate assumption in line with
many UK attractions. This suggests average per capita revenue from admissions would be about
12.50 including VAT in current values.
This yield assumption, twinned with a prudent lead price reflects the likely price sensitivity of the
local market where there are above average numbers of low income residents (and in general reflect
the UKs discounting culture). We would anticipate the attraction discounting little during peak
months, other than for standard family offers, children and discounts for standard concession
groups. During the shoulder months and low season we would anticipate more discounting with an
aim to provide low cost visits to local residents.
We note that our assumption is more conservative than even the worst case within the client team
business plan. If the length of stay on site can be pushed beyond our assumption towards the client
team assumption, then this could very well be an area of upside. We have taken a prudent view
based on the market norm and if a perception of significant quality above that of the market
comparators can be achieved, again it may be possible to exceed this figure.
In addition to revenue from admission, the attraction has the opportunity to earn from food and
beverage operations. At leading attractions, revenue from food & beverage typically accounts for
between 18 and 30 percent of total visitor revenues. Catering spend tends to rise with time spent at
an attraction. Attractions with a one to two hour average stays generate demand for snacks and
drinks among visitors. Attractions that have average length of stays of over three hours lead visitors
to require a meal. As mentioned, we feel a stay of around 3.5 hours would represent a solid
average (although management feel this can be exceeded and that may be the case). The mix of
guests we anticipate will include some more price conscious than others and will also include locals
likely to eat before and after a visit, as such we feel some caution is wise at this stage.

Indoor waterparks have faced the challenge of generating strong secondary spends on food and
beverage and retail due to people being in swimwear. Technologies such as rechargeable payment
bracelets are making it easier for customers to spend, as well as the thoughtful provision of human
dryers and readily accessible changing and drying facilities. Clearly management must make it easy
and comfortable for people to spend whilst in the facility.
We have assumed a per capita spend of 4 including VAT at current values. This is one third less
than managements assumption, which is not without precedent and is similar to UK theme parks.
UK waterparks have not been successful for the most part in providing high quality food and a
pleasant environment in which to eat and drink. We feel this project has the potential to change this
but have made a cautious forecast based on more typical spending. At 4.00 in current values this
equates to 21 percent of total assumed revenues, well within the described range and towards the
lower end of it.
Merchandise income at indoor waterparks in the UK has typically been minimal, as the quality and
range of offers has tended to be weak. We have recently seen much improved retail within some
international resort waterparks and hope that management will perform in this regard. In order to
take a prudent view though we have assumed, just 1.00 of retail spend on souvenirs, confectionary
and other forms of retail. Typically waterparks have succeeded in selling volume of floats, goggles,
rash vests, suntan lotion (where there are outdoor elements) etc. The UK attraction market has not
always embraced souvenir spending as well as say the US market and we have taken a more
cautious view on this than within the operators plan.
Areas of other spending can include locker rentals, human dryers, coin operated experiences, tube
hire and upcharge experiences. All of these could present opportunity and we have assumed a
spend of 1.00 in current values which is well within norms.
In conclusion, we estimate that average per capita spend in the attraction will total some 18.50 (in
2014 values) including VAT, and 15.43 net of VAT for the typical visitor. This is approximately 5.00
below the management worst case and we feel is a very prudent position. That said, the
management case does assume lower attendance along with a higher value and clearly a trade-off
can be made in terms of price and visitors (or value vs volume). If much improved food and
beverage, retail and service are in place as compared to typical British parks, then there is the
potential to exceed our forecast significantly as in the operators plan.
Other Revenues
There may be opportunities for other revenues, such as the special out of hours hire of the facility
for events or sponsorship or perhaps even spa treatments. We feel any such additional revenues
should be considered upside and have not included these.
IMPLICATIONS
We have performed a detailed market penetration based analysis of attendance potential as well as
a further sense check based on relative performance of waterparks versus nearby theme parks. Our
forecasting shows that an attendance range of 300,000 to 400,000 visits is an achievable target with
a mid-case estimate of approximately 350,000. This requires competitive pricing and strong
marketing alongside an excellent offer but is grounded in the real world performance of other
waterparks. We feel the mid case estimate is a sold and achievable target.

Physical Planning
DESIGN DAY ASSESSMENT
The following dimensioning assessment (figure 11) has been performed for the three attendance
scenarios: low, medium and high.
Design day is the average busy day rather than the peak day. Designing an attraction for the peak
day leads to an attraction which is expensive to operate and feels empty during periods of low to
normal demand, while developing an attraction for the design day creates an attraction which can
be run more efficiently and feels atmospheric without being overcrowded during periods of normal
to relatively high demand.
We have reflected upon the findings from the benchmarking assessment as well as seasonality in the
area in assessing peak month and typical weekly and daily throughput. While the indoor nature of
the park means it can be visited in any weather, there will inevitably still be a bias towards the
summer holidays. Various materials we have digested on tourism in the region suggest much is
being done to address skewed seasonality but inevitably both holiday patterns for overnight guests
and day visitor patterns will retain an overall typical summer bias even where shoulder and off
season visits can be attracted. To be cautious we have assumed a peak month of 20 percent.
Based on our review of tourism seasonality, waterpark seasonality and broader UK attraction
seasonality and considering the benefits of the spa element and indoor waterpark, we consider the
following seasonal pattern reasonable as an assumption, although clearly the operator has some
control over this through variable pricing, soft programming and marketing.
January: 2%
February: 3%
March: 5%
April: 11%
May: 7%
June: 10%
July: 16%
August: 20%
September: 12%
October: 6%
November: 3%
December: 5%

FIGURE 11 DESIGN DAY, CAPACITY & ATTRACTION PLANNING ASSUMPTIONS
Low Medium High
288,289 348,475 408,661

Attendance (000s)
Peak Month (% of annual) 20.0% 20.0% 20.0%

Week % of Month 22.5% 22.5% 22.5%
Design Day % Week 20.0% 20.0% 20.0%
Peak on Site (% of day) 50.0% 50.0% 50.0%
Peak Month Attendance 57,658 69,695 81,732

Weekly Attendance 12,973 15,681 18,390
Design Day Attendance 2,595 3,136 3,678
Peak on Site Attendance 1,297 1,568 1,839
Source: LDP
FOOD & BEVERAGE AND RETAIL

We have used rules of thumb turns per hour and front and back of house space to estimate covers
requirements and area requirements as summarized in Figure 12. Under this scenario we estimate a
need for around 250 sqm of space dedicated to food and beverage. This is not intended to be
prescriptive as every operator has their own style but it acts as sense check of the plans. We would
also note that the operator food and beverage assumptions are more ambitious than forecast by
LDP and therefore that could suggest a requirement for more space than shown in the figure below.
FIGURE 12 FOOD & BEVERAGE PLANNING ASSUMPTIONS
Low Medium High
Total Demand For F&B (of Peak on Site) 40.0% 40.0% 40.0%
Over Period (Hours) 2.0 2.0 2.0
Percentage of Design Day Eating Per Hour 20.0% 20.0% 20.0%
% By Type
Cafeteria 50.0% 50.0% 50.0%
Kiosks 50.0% 50.0% 50.0%
Turns Per Hour By Type

Cafeteria 1.5 1.5 1.5
Kiosks 4.0 4.0 4.0
F&B Hourly Demand

Cafeteria 130 157 184
Kiosks 130 157 184

259 314 368
Seating Requirement (Covers)

Kiosks 32 39 46
119 144 169
Front of House Space (Sqm / Seat)

Cafeteria 1.2 1.2 1.2
Kiosks 1.0 1.0 1.0
Kitchen (Sqm / Seat)

Cafeteria 0.80 0.80 0.80
Front of House Space (sqm)

Kiosks 32 39 46
Kitchen (sqm)
Cafeteria 69 84 98
F&B Totals (sqm)

Kiosks 32 39 46
Total 205 248 291
Source: LDP
In terms of retail space, our analysis suggests that around 100 sqm of retail space would be required
at medium levels of attendance (figure 13). This could be linked with reception or the food and
beverage offer to reduce space and staffing requirements.
FIGURE 13 RETAIL PLANNING ADDITIONAL ASSUMPTIONS
Low Medium High
Retail per capita spend (excl sales tax) 1.00 1.00 1.00
Merchandise revenues 288,289 348,475 408,661
Revenues per sqm 3,500 3,500 3,500
Required area sqm 82 100 117
Source: LDP
PARKING
We reviewed total parking requirement for project. For the most part visitors to attractions tend
towards their own cars, often as high as 90 percent or more. However, in this case the waterpark is

walkable or within easy public transport for many tourists and as such we have assumed 70 percent
arrive with their own car. For many large UK attractions the average visitors per car is around 2.5
and we feel this is a reasonable assumption. The analysis suggests a need for around 550 parking
spaces (including employees) and a few dedicated coach spaces (figure 14). It is important to note
that the parking assessment is provided for peak times and that this would not be required most of
the time. Clearly given the location, some visitors may park elsewhere and walk to the site.
FIGURE 14 PARKING ASSUMPTIONS
Low Medium High
Peak Day as % of Peak On Site 120% 120% 120%

Proportion of Arrivals by Car 70% 70% 70%
Visitors per Car 2.5 2.5 2.5
Proportion of Arrivals by Coach 5.0% 5.0% 5.0%
Visitors per Coach 35 35 35
Employee Parking 5% 5% 5%
Peak Day as % of Peak On Site 1,557 1,882 2,207

Car borne 1,090 1,317 1,545
Car Spaces 436 527 618
By Coach 78 94 110
Coach Spaces 2 3 3
Employee Parking Spaces 22 26 31
Source: LDP

Operating Expenses and Profit & Loss
INTRODUCTION
The following section outlines our review of likely operating expenses and profit and loss and is
based on our mid-case attendance. We have developed an outline staffing plan in order to test the
single largest area of operating expense in more depth.
STAFFING REQUIREMENTS
Full Time Management Team
While this is a feasibility study rather than an operational business plan, we have built out a review
of likely staffing on a position by position basis for full time staff and hourly wage staff. Clearly this
does not substitute the operators own plan, but is intended to provide LDP comfort that there is
sufficient operating budget within our forecasts. Figure 15 provides our view on the full time staff
roster which could be appropriate for this type of attraction. We have also sense checked this total
against the full time team for some other attractions.
These positions are an element of fixed costs and are unlikely to vary throughout the year. This
includes the core management, operations, maintenance, marketing and administrative teams.
Given the scale of operation we have assumed that some highly specialised maintenance services for
example will be outsourced and have sense checked operating expenses to ensure that sufficient
operating budget is likely to be available.
Part-Time & Seasonal Team

The next step in the analysis is to estimate the non-salaried staff, most of which will be lifeguards,
customer service, retail/food service, cleaning and other staff. These are assumed to be paid by the
hour with rosters designed to fit the anticipated operating patterns and which can be adjusted in a
fluid manner based on demand. We have reviewed the potential demand for hourly staff based on
high season, shoulder season and low season throughputs with a corresponding high, medium and
low day within each of the three seasons. We have assumed a 364 day operating season. We have
allowed for wages well above the national minimum wage to allow for a high level of service. Based
on this staffing model (which goes beyond our scope of work but is intended to provide us comfort
that the operating budget is reasonable) allowing 0.7 million for part time employees appears
appropriate. Since during the low days on low season we estimate a head count of 13 employees
could be required, we have included this within the FTE estimate in Figure 15.
We estimate that head count could peak at just less than 90 during high days in the high season.
Our staffing estimates are not intended as an operational business plan but rather a view based on
what has worked well elsewhere. Using modern technologies for safety monitoring it may well be
possible to reduce head count. We have assumed staff to oversee the staff but have not assumed
treatment practitioners, neither have we assumed any revenue from treatments (there could be an
upside case around this).
Staff costs are typically the biggest cost associated with the waterpark operations, and can account
for around 20 40 percent of total revenues, and the staff build up presented above comfortably sits
within this range at around 26 percent. We note that the operators plan shared with us includes

some staff costs related to food and beverage within the food and beverage expenses and is
therefore not directly comparable with our cost assessment. Adjusting the food and beverage
element suggests that under the higher attendance scenario the overall staffing budget in the
operators plan is very similar to the LDP assessment.
FIGURE 15 - ESTIMATED FULL TIME STAFF
Number of
Estimated Employees
Position Wage (Stable Year)
General Manager 68,750 1.0

Finance Manager 62,500 1.0
Marketing Manager 62,500 1.0
Operations Manager 50,000 1.0
HR 37,500 1.0
Maintenance Manager 43,750 1.0
Administration 22,500 2.0
Financial Controller 43,750 1.0
Sales and PR 37,500 2.0
Catering & Retail Manager 31,250 1.0
Retail and Catering Supervisor 25,000 2.0
Cleaning 16,250 2.0
Security 18,750 1.0
Cashier 18,750 2.0
Maintenance 22,500 2.0
Low season, low day wage staff 13.0
Estimated Full Time Staff 34.0

Note: Estimated social costs included
Source: LDP
OTHER OPERATING COSTS

Cost of Goods Sold
The ratios of cost of goods sold are relatively predictable at attractions worldwide. For the proposed
development, we have incorporated the following cost of goods sold:
Food & beverage - 30 percent of total food & beverage revenue
Merchandise - 45 percent of total merchandise revenue.
Other 20 percent of other revenue.
Marketing
The total annual spend on marketing is usually in the region of 8 to 15 percent of total operating
revenues.

We have allowed for some pre-opening budget to generate awareness. We have assumed a strong
marketing programme in the opening year, gradually decreasing in year two and stabilizing in year
three, once market awareness has been maximized. We have incorporated a marketing spend of 12
percent of revenues in year one, leveling off to 8 percent as awareness is established. We note that
the level of marketing spend in the management case is low and although many UK parks invest little
in marketing, we feel to achieve the penetration expressed in our forecasts it will be important to
have strong marketing campaigns and budgets. Regional tourism organizations should clearly also
support the park in their marketing efforts as they have a vested interest in doing so. It may be that
with significant support from the Council, regional tourism and cooperation with other businesses in
leisure, some marketing burden can be taken off the operation. That said, we view it as necessary to
market the attraction aggressively to attract day trip visits from more distant markets and as such
we show a generous budget (in excess of that available to many UK waterparks).
Repairs & Maintenance

Repairs and maintenance charges typically account for between two and ten percent of total
revenues for attractions, dependent on the level of technology and overall throughput and other
factors. It will be important for the waterpark to have high standards in terms of maintenance costs.
We have assumed that this cost centre includes the chemicals and consumables also required for
maintenance. We have assumed maintenance at 5.5 percent of gross revenues increasing to 7.0
percent over the first few years of operating, as pools, slides, plant and equipment will require less
major maintenance projects when new. This does not include the addition of new visitor
experiences, which we have considered under reinvestment. We have included outsourced
maintenance and other services within this category.
Administration & General

Administration and general is one of the larger costs associated with operating a specialized
attraction experience, after staffing and marketing. From our comparable review, it appears that
administration and general typically equates to between two and five percent of total revenues. We
have assumed our administration costs will be slightly above this range at six percent, to allow for
high levels of service and to recognize the year round operation.
Water, Energy and Utilities

As mentioned earlier, utility costs can be one of the greater burdens of indoor waterparks, as there
is a need to have them operational or at least climate controlled throughout the year. Utility or
energy costs typically equate to between two and eight percent of total revenues (in rare cases a
little higher). We have allowed for costs in the order of eight percent of revenues to take a prudent
view.
Insurance, Rates and Other Costs

Other costs can include special event-related costs, uniforms, security, rates, insurance and other
miscellaneous items. In general, these equate to between two and six percent of total revenues. We
have assumed other costs will be six percent of gross revenues.

Pre-Opening Expenses
Prior to opening there are likely to be a number of costs incurred such as management costs, costs
for training staff, and important marketing pre-opening. As a result we have incorporated pre-
opening expenses in our analysis for payroll, marketing, energy and other.
Rent
We have incorporated the turnover rent of 20 percent of revenues described to us but note that in
our analysis the rent reaches the capped amount (of 780,000) in every year. As such the rental
figure shown equates to the 780,000 plus inflation from 2014.
Reinvestment
We understand the operator is to put aside eight percent of turnover for reinvestment. This is
within industry norms for major commercial attractions and exceeds the budgets that have been put
aside by some UK waterparks which have over time grown tired. This is a very positive and
important element of the contracts described to us and is in our view essential for the project to
maintain a strong performance. This budget is for reinvestment in new features and attractions.
Given waterpark norms this allows for some very significant refreshments, which will be critical in
delivering new marketing messages, keeping the product offer current and appealing.
FINANCIAL APPRAISAL
In order to attract a high level of visitation and to fulfill the goals outlined earlier in the report, we
recommend the following pre-requisites and within the analysis we have assumed these are met:
The analysis relates to the operating business and projects profit and loss linked with our
analysis of market demand and the mid-case stabilized attendance we have assumed that
the initial capital will be sufficient to provide the envisaged scale and scope of facilities.
Presentation and environment will be important and quality of finish and decoration. Our
analysis assumes exemplary finish appropriate to the target markets and the concept,
providing an attractive, clean and well maintained destination throughout and with a high
level theming or decoration to create atmosphere.
We believe offering some outdoor elements will be received positively by the market and
feel that as the park reinvests, outdoor elements should be added to ensure that the park
does not suffer during good weather (clearly it will naturally be well suited to attract visitors
when the weather is poor during the tourist season).
We assume that a professional and experienced management team will run the facility (such
as Alpamare or another top flight operator).
It is imperative that the attraction be maintained to high standards. Lack of care to this
detail often results in higher reinvestment and repair costs later on and is a factor which has
negatively impacted a couple of UK waterparks.
Similarly it is imperative that reinvestment is ongoing, providing new attractions and reasons
to visit (sometimes this may mean removing older elements as they become outdated or as
newer technologies and experiences emerge).

Model is for a 15 year period, reflecting the long term operating nature of the business.
Our analysis assumed sufficient marketing budgets and strong and ongoing marketing to
drive visits from residents and tourists. The analysis assumes no major changes in the
waterpark competitive environment.
We are aware of the plans for leisure water within the Bridlington Leisure World development. It is
our understanding that the Bridlington scheme is community sports and swimming focused with
competitive swimming facilities, learner pool, spectator areas, health and fitness, sports hall, courts
etc. We understand there is a leisure pool with a couple of slides and some basic play elements but
this is not a waterpark scheme. The water leisure offer we have seen is very basic in comparison and
is only likely to account for a fraction of the capital costs of the entire scheme. It is clear that this is a
leisure centre not an entertainment-focused waterpark.
In our view the Bridlington scheme should be of significant benefit to local residents but the water
leisure offer is not comparable and we would not expect it to drive distant visits as we anticipate for
the waterpark under review. The water leisure within the Bridlington scheme is, in our view, not of
a scale to cause visitors to drive significant distances and will largely serve its community. A visit to
such a water leisure offer is a low cost swim rather than an occasional destination visit. Our
understanding is that two slides are planned, both of which are modest. Clearly should the plans be
revised to include a waterpark then it would likely cannibalise, potentially significantly, but it does
not appear that this is the case.
The Bridlington Leisure World scheme has more in common with the planned Scarborough Sports
Village, which again is community and sports focused as opposed to an entertainment and spa
orientated occasional visit. We similarly do not view the swimming element of the Sports Village as
a threat to the waterpark and feel the two projects should complement each other well.
When appropriate, we always take the care to highlight any competitive environment changes and
we have made enquiries regarding potential projects within the two hour resident market. There
have been a number of other schemes discussed over the years but we are not aware of any
proceeding. Clearly if a major waterpark was built locally this could have an impact.
Financial Bases Tables

We provide the key inputs from our financial model in summary tables. These bases form the inputs
for the financial model and illustrate the assumed business case for each use. In developing the
financial model bases we have called upon the comparable attraction research performed for this
study and our experience and benchmarks developed through our many leisure and entertainment
projects.
As discussed in the attendance forecast section of the report, we have allowed for an initial
champagne effect with a two percentage point uplift in primary market penetration over the stable
forecast level and subsequent reduction over the first three years. The market growth considered
within the resident and tourist market assessment is applied to market sizes within the financial
model.
At well managed, marketed attractions with regular reinvestment, relative stability in penetration is
often common place. Certain attraction types which are not particularly repeatable, such as

aquariums, are more prone to a tapering off in attendance. Most major waterparks and theme
parks do tend to enjoy relatively stable attendance as long as they continue to invest and market
themselves well.
The reinvestment within our assumptions is a key to this and most important if relative stability is to
be expected. The technical and operating team have discussed initial expansion plans with us and
we see these as very positive. It will be important to provide periodic new additions and marketing
buzz - typically every two to three years there should be a new message/reason to visit. In the
financial forecasts we show the reinvestment reserve being put aside every year but in practice we
would view a major reinvestment every two to three years being an appropriate strategy for how
best to spend this accumulated fund.
Waterparks are inherently repeatable since the experience is active and the visitor to some degree
makes their own fun; combined with the natural turnover in the tourist market and strong
reinvestment, stability in penetration is a reasonable expectation. Our extensive benchmarking data
highlights the perils of not reinvesting but shows that many attractions can and do achieve long-
term stability with often underlying growth in attendance (based on market growth, not typically
penetration). We include very modest forecast market growth as discussed.
The initial expansion plans discussed with us could add a lazy river and another ride and these not
only add capacity but provide for a major marketing boost (we have maintained stable penetration
despite this and subsequent significant expansions and have allowed modest real increases in per
capita admission spend).

FIGURE 16 FINANCIAL MODEL BASES, CORE ASSUMPTIONS
Inflation 2.0%
VAT 20%
Opening Year 2016
Core Revenue Stream Pay-one-price admission

Supplementary Revenue Food and beverage, retail, hire, coin operated
streams facilities etc.
Source: LDP
FIGURE 17 FINANCIAL MODEL BASES, VISITOR SPEND AND COST OF SALES

(2016 PRICES)
Per Capita In-Park Spend (Excl VAT)

Admission 10.85
Food and beverage 3.47
Merchandise 0.87
Other 0.87
We have allowed for real increases in admission spend of 5%

every other year from 2017 until 2023. This ties in with the
initial expansions that should further enhance perceived
value and attractiveness of the scheme. During this period
some 4 million of reinvestment in new features is assumed
within the forecasts, which could of course provide significant
upside in terms of length of stay, with positive impacts
Real Increases beyond this real price increase.
Cost of Sales
Food and Beverage 30%
Merchandise 45%
Other 20%
Source: LDP

FIGURE 18 FINANCIAL MODEL BASES, OPERATING EXPENSES
% of Revenues % of Opex
Year 1 Year 3 Year 1 Year 3
Staff Costs 25.9% 25.3% 33.5% 33.7%

Marketing Expenses 12.0% 9.0% 15.5% 12.0%
Repairs and Maintenance 5.5% 7.0% 7.1% 9.3%
Utilities, Water etc. 8.0% 8.0% 10.3% 10.7%
Admin & General 6.0% 6.0% 7.7% 8.0%
Other (Rates, Insurance etc.) 6.0% 6.0% 7.7% 8.0%
Rent 14.1% 13.7% 18.2% 18.3%
Total 77.5% 75.0% 100.0% 100.0%
Note: May not add due to rounding.

Source: LDP
PROFIT & LOSS & IMPLICATIONS

The projected profit and loss for the attraction is provided in Appendix Figure 3. This analysis
illustrates the potential to generate revenues from the envisaged attraction of in excess of 5.5
million initially, increasing towards 8.0 million over the first ten years.
In our view, it will be important that the attraction is professionally managed to a high standard to
achieve the envisaged level of revenues and operating profit. The revenue projections are highly
reliant on a well presented and exciting visitor experience, compelling slides and play features, and
strong marketing to drive visitation. One of the most critical success factors for this project is the
fact that most potential visitors live outside the one hour drive-time and therefore marketing and
making the presence of the park known beyond one hour, is extremely important.
Similarly important, we view the reinvestment as critical to maintaining attendance as the resident
market will require new reasons to revisit and the tourist market has many repeat guests who will
behave much like residents, having already been to the waterpark on prior stays.
We feel that the project has the operating potential to meet its rental obligations and reinvestment
plans with a surplus and that it presents a business case with a high likelihood of viability.
We feel this project is well placed to have a major impact in Scarborough, it plugs a gap in the tourist
offer and has the potential to drive resident visits from distant markets as well as benefiting existing
day trippers. It similarly has the potential to prove extremely popular with overnight tourists,
strengthening the overall destination. The benefit of a poor weather facility should be significant in
Scarborough but we are pleased to see plans incorporate outdoor elements and the aim to grow the
parks outdoor offer, and feel this is important and should be a priority during early reinvestment
projects.

We believe the impacts of this project for Scarborough can be far reaching in terms of employment
and tourist appeal. We stress that the park must be operated to very high standards and believe
Alpamare has the requisite experience and operating style. Should Alpamare ever exit the operation
an equally experienced operator should be brought in. There are a number of operators and
management companies that would be suited and which have European experience.
While we have not been asked to review capital for this project, we have assumed it is developed to
a very high standard and based on a sense check of investment per attendee we would expect the
costs to be in excess of 16 million to perhaps 20 million (although clearly a cost consultant will be
required as it is not our core area of expertise). It will be critical that the park is delivered to the
quality levels described to us. It will also be imperative that both the park and tourism agencies
commit to strong and ongoing marketing campaigns.
In summary, we feel this is a compelling project with a good fit with the market and if well run and
marketed it has the potential to provide a solid operating surplus.
While sensitivity analysis lies beyond our scope we have reviewed simple sensitivity to decreased
attendance and revenues and there is a significant buffer in the forecasts before the facility would
be unable to meet its obligations in terms of rent and reinvestment reserve.

Economic Impact
INTRODUCTION
While economic impact analysis is beyond our scope of work, we provide some discussion of potential
impacts in this section. The waterpark initiative is a project of significant importance for Scarborough
and the region. While its benefits will be felt most strongly in Scarborough itself, there will be positive
impacts within the wider area.
We set out below a summary of the key benefits to the region. We expand upon some of these key
benefits within this report section.
A minimum project value estimated to reach 14 million over the development period.
Development of this magnitude will provide employment in construction and associated
services.
Increased revenues for local businesses both directly and indirectly.
A significant volume of employment opportunities.
Enhanced tourism offer and infrastructure providing more reasons to visit, to stay longer and
to return.
Water attractions promote active entertainment with health and fitness and recreation
benefits to the local population, improving quality of life. Similarly the spa element has a
quality of life benefit.
The development is likely to have a positive catalytic effect in terms of development on nearby
sites and for tourism development throughout the area.
IMAGE IMPACT
The project will potentially strengthen the image of the Scarborough District due to the profile and
quality of the development. It will provide a quality of life benefit to those in the local market and
due to the recommended price points, which will be affordable and will offer the opportunity to visit
regularly. The benefits of major leisure schemes (including significant recreational elements) can
sometimes increase the overall liveability factor and increase the appeal of the area.
From the tourism perspective, although the area is already attractive and has many draws for tourism,
there is a lack of heavily invested entertainment and moreover poor weather options. The waterpark
is a major statement of intent in terms of the provision of leisure and entertainment in Scarborough
and should be a key element of the marketing message for years to come. It is likely that such a
development would create opportunity and interest for other developments.
DIRECT & INDIRECT ECONOMIC IMPACT

The direct economic impact of this project will be significant relative to other developments in
Scarborough; it will enhance spending in the local and broader market. Visits may be induced from
up to two hours away in the resident market and from tourists from further away. The mid-case
attendance forecast suggests close to 350,000 visits. These people will of course spend in the local
area on dining, services, accommodation etc.
Direct impact can be measured by looking at revenues from the attraction. Clearly, indirect impacts
would benefit the hospitality industry, retail/dining, and basic household goods as employees then

spend their earnings in the area. The indirect impacts of this new income for the region being spent
and re-spent will of course be very important. We would anticipate strong multiplier effects creating
significant economic impacts.
Typically 1.5 times total revenue is used as a rule of thumb for assessing the gross economic impact
created by a major leisure project. In addition, a recent review of induced impact from theme parks
and theme park hotels showed a higher multiplier effect on average of 1.95 Europe wide. However,
as this project is not a full scale theme park, but rather a waterpark (with penetration that typically
draws a smaller proportion of distant and induced visits), we are using the more conservative 1.5 times
rule of thumb. This implies that the total revenues from the project forecast at 5.8 million in the
opening year to over 8 million within ten years, could result in an implied economic impact of almost
9 million initially and 12 million by operational year ten. While this is only a rough estimate it
provides a sense of the broad potential for impacts from the project.
Additional fiscal benefits could also occur given new revenues and income generated by the project
over time. LDP are not tax specialists however, and would be hesitant to comment overly in this
area. Tax specialists could be retained to measure the true level of fiscal impact generated. Key areas
of fiscal impact could include increased VAT from earned revenues, rates and income taxes caused by
the new employment.
Tourism impact will be a major factor as the attraction will provide a key reason to visit or stay longer
in the region. Currently, it is expected that around 30 percent of visits will be generated from the
overnight tourism market. An attraction of this scale will enhance the regional offer and could induce
some visits, although stronger impacts are more likely in term of extended stay and increased spend.
There will be an impact through the projects ability to increase the length of stay of existing tourists,
causing them to demand more goods, services and accommodation.
Scarborough is a well-established day trip destination and the existing day trippers will benefit from
the park. Within this segment there is a strong opportunity for the waterpark to induce day trips
(some of which may convert to overnights) encouraging lapsed or new visits.
EMPLOYMENT IMPACT
The waterpark development would create significant employment for residents of the local area,
with positions created at all levels from highly skilled positions and senior management, to flexible
summer jobs for youngsters and students.
Unlike many forms of industry, attractions and tourism infrastructure projects are non-transferable
and the development will continue to provide these employment opportunities for the long-term.
There are two different types of employment impact-- construction jobs are one and would be an area
for the design and planning team to consider. We have forecast full time salaried, and full and part
time hourly wage staff based on our experience. This suggests a core team of up to 34 full timers with
a peak season head count of up to as many as 89. Clearly the operators operating style and
operational business plan will dictate actual staffing and as such this is only a guide based on other
benchmarks and our appraisal.
The development will require well trained staff and the operators training procedures should ensure
it provides a programme that would provide its employees with skills in areas such as customer

service, first aid, maintenance, management, IT and so on, which would continue to benefit the
economy and staff for many years to come.
The construction impact of building the project will also have a benefit for the local economy,
providing man-years of employment and demand for materials.
IMPLICATIONS
The development is being tested and planned to help ensure its quality and sustainability, and should
drive residents and tourists to the project. It will create image benefits and can be used to effectively
strengthen marketing for the town for years to come and to the benefit of all businesses in the tourism
industry. The project should be a catalyst for significant change in the marketplace.
Attractions are valuable employers as they create large numbers of non-transferable jobs and offer
extensive training in skills which benefit their workforce for their entire careers whether inside or
outside the leisure industry.

Appendix
FIGURE 1 REGIONAL ATTRACTIONS AND LEISURE BUSINESSES
VENUE (by type) LOCATION OVERVIEW ADULT ENTRY CHILD ENTRY OFFERS
ANIMALS/WILDLIFE
Betton Farm Visitor Centre East Ayton, Working farm with children's play areas, honey bee Free Free Farm: free entry
visitor centre, tea rooms & restaurant, & camping. Camping: from 7.50 per person
Filey Bird Garden and Animal Park Filey 5 acre petting & feeding zoo, pond, basic F&B (caf) 4.50 Under 2: free Family: 18.50
and picnic tables. Over 2: 4.00 OAP: 4
Pesky Husky Trekking Centre Staintondale Husky centre: meet and work with Siberian Husky 15 Under 16: 5 Family concessions 'available'
dogs. Season: October to end of March only.
Playdale Farm Park Cayton, Farm with animal barn and 'interactive paddocks' 5.50 Under 2: free OAP: 5
Scarborough (feeding ), go-kart track, indoor children's play area Over 2: 5 Parties: 10.50 per child
(ball pool, tractor zone & adventure trail) & basic
F&B (caf).
Scarborough Donkey Rides, South Scarborough Short donkey rides along 2,500ft long South Bay n/a 2 per ride None
Bay Beach Beach.
AQUARIA/SEA LIFE
Sea Life Marine Sanctuary Scarborough Indoor and outdoor displays (marine life) in three 16.20 Under 3's: free Family ticket: 13.20 per person.
triangular buildings. Over 3's: 16.20 Annual Pass available.
Joint entry with Pirate Adventure Mini
Golf: 19.20 (save 45% with online
booking). Save 40% by booking online.
The Deep Hull Aquarium with over 3,500 fish, F&B and outdoor Over 16: 3-15: 8.75 Birthday parties & sleepovers
picnic areas. 10.75 packages.
Day Plus ticket: free return visits over
12mths. Save 10% by booking online.
Whitby Whale Watching Centre Whitby Sailing trips on 17m wildlife yacht (capacity: 12 No prices on No prices on No prices on website
people). Each trip: up to four hours. website website
Source: LDP

FIGURE 1 REGIONAL ATTRACTIONS AND LEISURE BUSINESSES CONTINUED
BOWLING
AMF Hollywood Bowl Stockton Stockton on 26 lane bowling, arcade, pool tables, bar, F&B. 5.25 Under 16: 4.25 Family ticket: 17.50
Tees Discount for pre-booking
Meal & bowl offers (from 5.95 per
child). Party packages.
Olympia Bowl & Softplay Scarborough 12 lane bowling alley, F&B (snacks). See 'Soft Play' 4.95 per 4.95 per game Bowling, food & drink for 6.75 pp.
section for soft play details. game Children's parties and group offers.
Tenpin York York 28 lane bowling, laser play, arcade, pool tables, bar 7.25 per 5.75 per game Laser quest: 6 adult, 5.75 child
and F&B. game Family ticket: save 20%
CINEMA COMPLEXES
Hollywood Plaza Scarborough One screen with 275 seats, basic F&B. 7 Under 14: 6 OAP & students: 6
CHILDREN'S PLAY CENTRES/SOFT
PLAY
Candy Kingdom Bridlington Indoor soft play centre, basic F&B. One free per 6-12mths: 1 Prices quoted are peak. Off peak
child, then 1-4yrs: 3.85 prices: approx 1 cheaper
50p per adult 5-12yrs: 4.45 Child minders free off peak
Meal deals and party packages
Dizzy Rascals Pickering Indoor soft play, farmyard themed, basic F&B One free per Under 1: free Loyalty cards: 4 visits, get 5th free
(snacks/teas) for 0-10yr olds. child, then Under 4: 3.50
50p per adult Over 4: 4.25
Little Hoppers Adventure World Scarborough Indoor soft play areas (9,000ft), four age-specific 1 adult free 7-11mths: Under six months: free entry.
play areas, craft rooms and F&B. per child, 1.50 1- Membership (annual) : 10 per child
then 1.25 4yrs: 4.25
per adult 5-12yrs: 4.75
Mini Monsterz Scarborough Indoor play area (9,000ft): soft play, 5.5m high 1 6-11mth: 1.75. Under six months: free entry.
slide, laser tag, toddler specific play areas, pottery 12-17mth: Go karts: 1 per ride
play, go karts, basic F&B. Up to age 16 (laser play 4.75 Laser tag parties: from 12.95 per
includes adults). 18mth-16yrs: person. Loyalty card
5.25
Source: LDP

Neptune's Kingdom Hornsea, Indoor play with chutes and ball pools, 'walking on 6.00 3.50 Parties: various options. From 5pp.
East water' pool, F&B.
Yorkshire
Olympia Bowl & Softplay Scarborough Soft play. Also has rides (kart track for 4-10yr olds) n/a (adults From 5 Parties: children and teen parties from
and games. See 'Bowling' section for bowling only pay for 6.75pp
details. F&B (snacks). bowling)
CLIMBING/ACTIVITY
Purple Mountain Cycle Centre Dalby Outdoor cycling venue/centre: bike hire, forest See H See H Entry to trails: free but 7 forest entry
routes and picnic areas, and basic F&B (caf). toll charge (per car) applies
Longest trail: 42km. Annual footfall estimated at Bike hire: price varies according to
450,000. bike type and length of hire
Corporate and party packages
Go Ape Dalby Forest Outdoor tree-top adventure park (for over 10's). From 30 From 17 Entry price dependant on activity
(three different adventures)
Team building corporate packages
Group and party packages
GOLF
Pirate Adventure Mini Golf Scarborough 12 hole outdoor mini golf. 5.95 5.95 Joint entry with Sea Life Sanctuary
19.20
KARTING
Scarborough Indoor Karting Scarborough Indoor go-karting 300m circuit, ages 8 upwards. 13.99 13.99 13.99 fee: 30 laps
Group bookings: from 512.99 for ten
people
Children's parties/stag & hen do offers
LASER PLAY
Little Hoppers Laser Zone (see Scarborough Laser play (4,500ft) for over 6's. 4.75 4.75 Charged per 30min game.
Little Hoppers Adventure World) Child entry plus meal: 7.50
Birthday party package: 11.95 per
child.
Source: LDP

MUSEUMS/GALLERIES/HERITAGE
Beck Isle Museum Pickering Local heritage re: Pickering. 27 rooms of exhibits Over 16: 6 Under 5: free Local residents get 50% reduced entry
indoors, outdoor riverside picnic areas and farm 5-16: 3 fee. Value family ticket: 15.
courtyard. Basic F&B. Crafts and fossil days. Events: pay per event (5)
Captain Cook Memorial Museum Whitby Heritage museum re: Captain Cook. 4.80 3.30 Schools & group offers
OAP/concessions: 3.30
Family: 12
Eden Camp Modern History Nr Malton Modern military history museum set in a 4.5 acre 6 5-16: 5 OAP/concessions: 5
Museum former prisoner of war camp. Children's play and Group tickets: 5 adults, 4 child
picnic areas, F&B. Occasional special events.
100,000 refurb in 1992.
Rotunda Museum Scarborough Museum on the geology of the north coast with Day ticket: Under 18: free Concessions: 4 entry
interactive exhibitions. Includes Scarborough's Lost 4.50 Open return ticket: 9 (valid for
Dinosaurs exhibition and Scarborough art gallery. 12mths)
Annual footfall: 19,865.
Scarborough Castle (English Scarborough Castle ruins and surrounding grounds set in 16 5 5-15: 3 Membership (English Heritage: 48
Heritage) acres. Exhibitions, tea rooms and live events in the per year): free entry
summer. Concessions: 4.50
Family ticket: 13
MUSIC/EVENTS VENUES
Scarborough Open Air Theatre Scarborough Events and concerts (eg: Last Night of the See H See H Tickets vary per event/concert
Proms/Boyzone) on lakeside stage. 6,500 capacity. (bought via Ticketmaster website)
3.5m refurb in 2010.
Scarborough Spa Scarborough Complete entertainment and events venue: See H See H Tickets vary per event. Eg: panto
concerts, pantomimes etc. F&B. ticket 14.85 adult/8.50 child
Booking charges wen booking
online/via booking office
Wedding, banquet & party packages
Source: LDP

RAILWAYS (leisure)
North Yorkshire Moors Railway Whitby Heritage steam train 18 mile long railway. Learning From 14 Under 5: free Special events (pay per event)
centre with occasional exhibitions. Some 5-15: from 7
trains/stations along the route carry basic F&B.
Annual footfall: 300,000. Recent Whitby station
refurb: 1.4m
Scarborough North Bay miniature Scarborough Miniature seaside 3/4 mile long railway, lake with Return: 3.30 Under 3's: free Season tickets and group offers
Railway water chutes and paddle boats, F&B. Annual Return: 2.70 'Be a train driver': 80
footfall: 300,000. Charter a train: 80 (max 65 people)
SWIMMING/SPORT
Bridlington Leisure World Bridlington Swimming & sports leisure centre with three indoor Various (peak Various (peak = Pay per activity
pools: learner pool, wave/splash/flume/rain pool & = 6.00) 3.50) Peak and off-peak prices (peak adult
a 25m pool, spa & sauna, gym etc. Caf. Planned swim: 6, peak child swim: 3.50)
20m redevelopment investment for 2014/15. Children's party packages
Helmsley Open Air Swimming Pool Helmsley 20m long open air heated pool. 4.50 Under 16: 3.50 Summer only. Family ticket: 15
OAP: 3.50. Private hire: 25 per hour.
Season tickets on request
THEME/ENTERTAINMENT/FAMILY
PARKS
Flamingo Land Malton Theme park: 400 acres with seven themed areas, Over 13: 10 Under 3: free Seasonal and variable pricing offers
eight 'extreme' rides, free shows, 4D cinema, zoo High Season 4-12: 7.50 provided on line and through
and F&B. Annual footfall: 1.8m. 35 High Season operators
35
Peasholm Park Scarborough 40 acre park: lake with rowing, canoes and pedalo Free Free Some events chargeable: Adults 10,
boats, sailing and model boat sailing, wildlife, live Children: free
music, picnic areas, mini golf, tea and ice cream
shops. Events in the summer.
Terror Tower Scarborough Haunted house attraction - walk through interactive 4 Under 13's: 3 Family of 4: 12
experience with "live actors, animated scenes and Group booking discounts
special effects". Over 5's. Special scare nights
Source: LDP

APPENDIX FIGURE 2 -
TOP TEN PAID ATTRACTIONS IN YORKSHIRE AND THE HUMBER 2010
Attraction Type Footfall Ranking
Flamingo Land Theme park and zoo 1,268,619 1
York Minster Place of worship 512,075 2
Tropical World Garden attraction 346,142 3
Jorvik Viking Centre Museum/gallery 345,017 4
Fountains Abbey Historic 342,499 5
Lightwater Valley Theme/leisure park 324,896 6
York Castle Museum Museum/gallery 309,332 7
Eureka Childrens museum 247,831 8
Harewood House Historic 247,745 9
RHS Garden Harlow Garden attraction 246,563 10
Source: Visit England

Appendix Figure 3: Projected Account of Profit & Loss for the Proposed Waterpark
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
2 3 4 5 6 7 8 9 10 11 12 13 14 15
Estimated Annual Attendance - 358,952 357,537 356,078 359,140 360,622 361,713 362,815 363,927 365,051 366,186 367,333 368,491 369,660
Visitor Income
Admission - 3,894,029 4,150,194 4,215,917 4,549,829 4,659,975 5,001,256 5,116,818 5,491,787 5,618,921 5,749,120 5,882,461 6,019,024 6,158,889
Food & Beverage - 1,244,845 1,264,738 1,284,767 1,321,733 1,353,731 1,384,982 1,416,984 1,449,757 1,483,318 1,517,689 1,552,889 1,588,940 1,625,863
Merchandise - 311,211 316,185 321,192 330,433 338,433 346,246 354,246 362,439 370,830 379,422 388,222 397,235 406,466
Other - 311,211 316,185 321,192 330,433 338,433 346,246 354,246 362,439 370,830 379,422 388,222 397,235 406,466
Total Revenues - 5,761,296 6,047,301 6,143,068 6,532,429 6,690,572 7,078,729 7,242,295 7,666,422 7,843,898 8,025,653 8,211,795 8,402,434 8,597,682
Cost of Goods Sold - 575,741 584,941 594,205 611,302 626,101 640,554 655,355 670,512 686,035 701,931 718,211 734,885 751,961
Gross Margin - 5,185,555 5,462,360 5,548,863 5,921,127 6,064,471 6,438,174 6,586,939 6,995,909 7,157,863 7,323,722 7,493,584 7,667,549 7,845,721
Staff Costs 328,038 1,494,078 1,523,959 1,554,438 1,585,527 1,617,238 1,649,582 1,682,574 1,716,226 1,750,550 1,785,561 1,821,272 1,857,698 1,894,852
Marketing Expenses 138,271 691,356 604,730 552,876 522,594 535,246 566,298 579,384 613,314 627,512 642,052 656,944 672,195 687,815
Repairs and Maintenance & Services - 316,871 362,838 430,015 457,270 468,340 495,511 506,961 536,650 549,073 561,796 574,826 588,170 601,838
Utilities, Water etc. 92,181 460,904 483,784 491,445 522,594 535,246 566,298 579,384 613,314 627,512 642,052 656,944 672,195 687,815
Admin & General 86,419 345,678 362,838 368,584 391,946 401,434 424,724 434,538 459,985 470,634 481,539 492,708 504,146 515,861
Other (Rates, Insurance etc.) Expenses 69,136 345,678 362,838 368,584 391,946 401,434 424,724 434,538 459,985 470,634 481,539 492,708 504,146 515,861
Rent - 811,512 827,742 844,297 861,183 878,407 895,975 913,894 932,172 950,816 969,832 989,229 1,009,013 1,029,193
Total 714,045 4,466,076 4,528,730 4,610,240 4,733,060 4,837,344 5,023,112 5,131,271 5,331,645 5,446,730 5,564,372 5,684,629 5,807,563 5,933,234
EBITDA (714,045) 719,480 933,630 938,623 1,188,067 1,227,127 1,415,062 1,455,668 1,664,264 1,711,133 1,759,351 1,808,955 1,859,986 1,912,487
EBITDA Margin 0.0% 12.5% 15.4% 15.3% 18.2% 18.3% 20.0% 20.1% 21.7% 21.8% 21.9% 22.0% 22.1% 22.2%
Reinvestment Allowance - 460,904 483,784 491,445 522,594 535,246 566,298 579,384 613,314 627,512 642,052 656,944 672,195 687,815
EBITDA less reinvestment (714,045) 258,576 449,846 447,178 665,473 691,881 848,764 876,284 1,050,950 1,083,621 1,117,298 1,152,011 1,187,792 1,224,672
Source: Leisure Development Partners

APPENDIX FIGURE 4
Age Profile Comparison, Scarborough, the North East & England
45%
40%
35%
30%
Scarborough
25%
North Yorkshire
20%
North East
15% England
10%
5%
0%
Under 16 16-44 45 64 65 and over
Source: The ONS, 2011 Census


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Appendix H

Scarborough Waterpark Feasibility Study

Leisure Development Partners LLP

Scarborough Waterpark Feasibility Study

Scarborough Waterpark Feasibility Study

The site should:

Have strong regional transport links by road.

Be within easy access of a significant resident market base.

Be proximate to tourist markets and various forms of tourism accommodation.

Be large enough to develop sufficient on-site parking.

Scarborough Waterpark Feasibility Study

Be as flat as possible to minimize ground-shaping infrastructure costs.

Be in single ownership or require purchase negotiations with few current owners.

Be in an area with a positive image and in proximity to other complimentary visitor

Not include areas of significant scientific, ecological or environmental importance.

Scarborough Waterpark Feasibility Study

Scarborough Waterpark Feasibility Study

Scarborough Waterpark Feasibility Study

Scarborough Waterpark Feasibility Study

Source: LDP and MapPoint

Scarborough Waterpark Feasibility Study

Primary 0-60 minutes 438.9 446.0 453.2 460.4

Total residents 0-120 minutes 6,822.8 6,932.4 7,043.8 7,156.9

Source: LDP, MapPoint, Ons

Resident market characteristics

Scarborough Waterpark Feasibility Study

FIGURE 4 ESTIMATED AVERAGE WEEKLY HOUSEHOLD INCOME, BY MSOA, 2011

Source: Neighbourhood Statistics

Scarborough Waterpark Feasibility Study

Scarborough Waterpark Feasibility Study

FIGURE 5 AVAILABLE TOURIST MARKETS

2,661 2,814 2,847

Average Length of Stay 3.39 3.44 3.24

Percentage Holiday Makers 69.5% 71.9% 74.0%

2,134 2,257 2,283

Scarborough Waterpark Feasibility Study

SUMMARY AND IMPLICATIONS

Scarborough Waterpark Feasibility Study

EVOLUTION OF THE WATERPARK & OVERVIEW

Scarborough Waterpark Feasibility Study

PRINCIPAL CONCEPT TYPES SUMMARY

Scarborough Waterpark Feasibility Study

VISITOR ORIGIN AND MARKET PENETRATION AT WATERPARKS

Scarborough Waterpark Feasibility Study

FIGURE6 MARKET PENETRATION FOR SELECTED INDOOR WATER PARKS

Primary Secondary Domestic

Max 15.2% 12.6% 2.8% 0.9%

Min 1.5% 0.4% 0.1% 0.0%

Median 5.1% 1.3% 0.6% 0.0%

Average 6.7% 2.5% 1.0% 0.2%

Outdoor Waterparks & Resort Waterparks

Scarborough Waterpark Feasibility Study

US waterparks including destination parks in Orlando

European Water Parks

Resort Water Parks 13-15% 4-6% 0-5% 7-11%

Scarborough Waterpark Feasibility Study

Selected European Waterparks Selected US Waterparks

Category Range Average Range Average

Admissions 65% - 70% 67% 59% - 74% 64%

Food & Beverage 18% - 30% 22% 15% - 22% 18%

Other 5% - 12% 10% 6% - 17% 13%

Total 100% 100%

Source: World Waterpark Association, Individual parks and LDP