Parrot Island Waterpark still in the black, despite ‘sophomore slump’

Parrot Island Waterpark reported a second consecutive cash-positive year at a special study session of the Fort Smith Board of Directors and Sebastian County Quorum Court Thursday night (Oct. 27).

However, Rick Coleman of American Resort Management (ARM), the management company behind the facility, said the park’s second year did suffer from a bit of a “sophomore slump” affected by more weather days and a higher minimum wage.

Net operating income for the 2016 season finished at $92,571 on $1.222 million in revenues and $1.129 million in expenses. The 2015 inaugural season net income by comparison was $430,137 with revenue of $1.532 million against $1.102 million on the expense side. The proposed 2016 budget estimated $1.866 million in revenues against $1.566 million in expenses, so actuals came in at $644,000 lower than expected, but ARM was able to slash expenses by $437,000 to keep up.

EXPENSES, REVENUE IMPACTS
Expense-wise, weather was a bigger factor in year two than in the inaugural year. “Every Saturday in August” was affected by a weather event, Coleman said, with 21 total days for the season compared to 11 in 2015.

As for the minimum wage, “Every time there is a minimum wage increase, it is somewhere from a $30,000 to $48,000 impact to our expenses, and we can’t do anything about it,” Coleman said. “We haven’t raised our (transient) rates since day one, so we charge the same rate, but have our labor go up by a dollar an hour (counting the 50-cent increase that has already occurred and the one coming in 2017).”

For the year ahead, ARM’s goal is to “get revenues back to the inaugural year,” Coleman said. “We are going to have a ton of programming,” including morning swim lessons, more “toddler days,” and some extended evening hours. He also said the park would be working toward more special event weekends similar to the First Responders Day and Military Appreciation Day of 2016.

The 2017 proposed budget estimates $1.586 million in revenues and $1.391 million in expenses for a NOI of $195,569. The park now has $370,000 “sitting in the bank,” Coleman said, with obligations toward expansion and maintenance reserves being met.

“At the end of last year we said we were going to put $130,000 in the expansion reserves. We are going to add $20,000 to it this year,” Coleman said, adding that the $50,000 available in the maintenance reserves from 2015 will receive another $30,000.

“I am proposing that we put more in the maintenance reserves than the expansion reserves because there is some cracking in the pools. There are some things taking place that may require the maintenance reserves sooner than I would like to see, and I just want to make sure those monies are there in case we need them,” Coleman said, noting that the cracking is all “hairline, surface-level stuff” and nothing that would require deeper investment.

After the required allocations, Parrot Island Waterpark will have around $120,000 in operating funds to last until the start of next season. With only four year-round full-time employees, that should be more than enough to keep it in the black. The park employs 120 seasonal workers.

GOOD REP, BUMPY HISTORY
“Overwhelmingly the comments are positive,” Coleman said of the park’s reputation, adding that criticisms usually involve the size of the park and a desire for expansion. Online and in-park guest surveys resulted in an overall satisfaction score of 89% with 88% in guest service and 91% in cleanliness. The park also scored 4.1 out of 5 on Google and 4.5 out of 5 on TripAdvisor, where it was also rated the No. 5 attraction in Fort Smith.

The history of Parrot Island Waterpark has been a bumpy one. The facility was approved by voters as part of an inter-local agreement between the city of Fort Smith and Sebastian County on the pitch that it would be an $8 million facility. By the time it opened around Memorial Day 2015, the figure would balloon to $12 million. Both government bodies split construction costs, which will not be reimbursed through future profits.