I went to the Wisconsin Dells as a kid. It was the hokiest sort of tourist trap you could ever imagine. All those same places I went to as a kid (Fairytale Garden, the Wonder Spot, etc.) are still there, almost unchanged. In the ensuing 30 years, what has changed are water parks. Now, everywhere you look there are enormous water parks, one right next to the other.
Why should this be? The climate is not particularly well suited to water parks, since it is only warm enough for them a few months a year. (Thus, the emergence of the indoor water park which is becoming more and more common there.)
Once you have 10 huge water parks, you wouldn’t think building the 11th would make that much sense, but apparently it does.
One explanation is that by putting all the water parks in the same place you are able to attract water park connoisseurs who wouldn’t come without an agglomeration of water parks. That is what Branson, MO has done with country music. I don’t think that is what is going on at Wisconsin Dells, though.
A second explanation would be that there is something about the area that gave it an advantage in producing water parks, like Napa Valley and wine. Again, I don’t see any evidence for this.
So does anyone understand why there are so many water parks at the Dells?
(If it is anything like the puzzle I posed about why children no longer deliver newspapers, I’m sure blog readers have the answers.)
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No magic.
Its as simple as having a waterpark in the hotel being a competitive advantage over a hotel that doesn’t.
Once one had it, they all followed. Might as well ask why national chain hotels have pools.
Its not just Wisconsin Dells anymore either. The twin cities area (MN) has three major water parks now.
http://www.waterparkofamerica.com/
http://www.grandrios.com/
http://themeparks.about.com/gi/dynamic/offsite.htm?site=http://www.valleyfair.com
That’s just the private ones. There are a number of municiple ones, and further from the cities even more.
Waterparks are not that rare anymore.
No magic.
Its as simple as having a waterpark in the hotel being a competitive advantage over a hotel that doesn’t.
Once one had it, they all followed. Might as well ask why national chain hotels have pools.
Its not just Wisconsin Dells anymore either. The twin cities area (MN) has three major water parks now.
http://www.waterparkofamerica.com/
http://www.grandrios.com/
http://themeparks.about.com/gi/dynamic/offsite.htm?site=http://www.valleyfair.com
That’s just the private ones. There are a number of municiple ones, and further from the cities even more.
Waterparks are not that rare anymore.
Your post reminded me of a topic that I studied in college, around spatial competition as it related to gas stations and their proximity to one another. Have you ever wondered why you can drive for miles without running across a gas station and then encounter an intersection with four stations.
Business instinct would tell you that you would have greater price elasticity with greater distance to other stations (and thus better margins), but I remember coming across some reasearch that said the opposite… there was more variability in gas price the closer stations were to one another. I believe the theory behind this counter-intuitive finding was that proximity allowed stations to differentiate on other factors (car wash, convenience store, brand)
Perhaps that might explain the water park sceneario in Wisconsin Dells, that introducing more water park options to the consumer in close proximity allows incoming water parks greater pricing flexibility then if they had opened a new water park in another town?
Your post reminded me of a topic that I studied in college, around spatial competition as it related to gas stations and their proximity to one another. Have you ever wondered why you can drive for miles without running across a gas station and then encounter an intersection with four stations.
Business instinct would tell you that you would have greater price elasticity with greater distance to other stations (and thus better margins), but I remember coming across some reasearch that said the opposite… there was more variability in gas price the closer stations were to one another. I believe the theory behind this counter-intuitive finding was that proximity allowed stations to differentiate on other factors (car wash, convenience store, brand)
Perhaps that might explain the water park sceneario in Wisconsin Dells, that introducing more water park options to the consumer in close proximity allows incoming water parks greater pricing flexibility then if they had opened a new water park in another town?
This is interesting,
“The report recounts the origins of the shared revenue program when the State began to pay local governments for property tax income lost by the
removal of utility property from the tax rolls. The program was broadened when the State income tax was enacted in 1911. At that time
ninety percent of the money was returned to the jurisdiction where it was collected. In 1972 a formula based on needs measured by revenue, property value and population was introduced.
These formulas established equalization of revenues as an important goal of the program. One of the flaws of the program, as presently constituted, that the report points to is that under the current formula a municipality increases its shared revenue funding by increasing its revenues and spending. ‘Higher expenditures…produce a higher shared revenue payment. Not only does this create an incentive to increase municipal spending to receive higher state shared revenue. It distorts municipal strategy.”
this comes from:
http://www.ncwrpc.org/adamscp/county/E8.pdf
Hence it is possible the dells is bankrolling waterparks as a means of increasing it’s spending so that it receives a higher amount of compensation from the state.
This is interesting,
“The report recounts the origins of the shared revenue program when the State began to pay local governments for property tax income lost by the
removal of utility property from the tax rolls. The program was broadened when the State income tax was enacted in 1911. At that time
ninety percent of the money was returned to the jurisdiction where it was collected. In 1972 a formula based on needs measured by revenue, property value and population was introduced.
These formulas established equalization of revenues as an important goal of the program. One of the flaws of the program, as presently constituted, that the report points to is that under the current formula a municipality increases its shared revenue funding by increasing its revenues and spending. ‘Higher expenditures…produce a higher shared revenue payment. Not only does this create an incentive to increase municipal spending to receive higher state shared revenue. It distorts municipal strategy.”
this comes from:
http://www.ncwrpc.org/adamscp/county/E8.pdf
Hence it is possible the dells is bankrolling waterparks as a means of increasing it’s spending so that it receives a higher amount of compensation from the state.
Interesting question Steven, it would appear that the Wisconsin Dells is to water parks what Las Vegas is to gambling.
Granted the northern part of Wisconsin seems an unlikely place to build water parks. But what is so attractive about going into the middle of the desert to throw away your life’s savings?
Interesting question Steven, it would appear that the Wisconsin Dells is to water parks what Las Vegas is to gambling.
Granted the northern part of Wisconsin seems an unlikely place to build water parks. But what is so attractive about going into the middle of the desert to throw away your life’s savings?