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MADISON, WI-Executives with Great Wolf Resorts Inc., an operator and developer of family-oriented destination properties, reported total revenues of $37.8 million during the company's first quarter ended March 31. Despite a slight disruption and minor damage sustained at the company's Kansas City property, which resulted in lost revenue and additional expenses of between $500,000 and $700,000, chief executive officer John Emery said the company's first quarter was better than analysts' estimates. Advance bookings for the second quarter are also on track to exceed numbers from same year-ago period.
While results from the company's northeast properties continue to gain positive results, the company's Sandusky, OH and Traverse City, MI properties remain challenging, "primarily as a result of the combination of negative regional economic factors and increased competition over the last two years," Emery said. "We have adjusted our marketing programs for these properties to address the challenges in the Ohio and Michigan markets."
During the period, the company completed a $14.5-million waterpark expansion at Wisconsin Dells Great Wolf Lodge, increasing total indoor entertainment area to 102,000 sf. It also closed on a $63-million financing agreement for two properties held in joint venture with CNL Income Properties Inc., which resulted in $18.6 million of cash proceeds to Great Wolf Resorts.
Shortly after the quarter ended, the company opened its first licensed property in Niagara Falls, Ontario, Canada. In Mason, OH, construction of the 401-suite Great Wolf Lodge resort being built by the company's joint venture with Paramount Parks Inc. is on track for a late 2006 opening, which will include a 92,000-sf indoor entertainment area and 40,000-sf conference center. Great Wolf will operate the resort, of which it has an 84% equity position in the joint venture.
Emery said that the company would soon break ground on a major expansion at its Williamsburg, VA resort "in response to positive demand trends at the property." The resort will add 103 suites to its existing 301 suites and 5,000 sf of meeting space to the existing 7,000 sf. The waterpark expansion will add 12,000 sf to the existing 55,000 sf.
Projects slated for completion in 2007 remain on schedule, Emery said, with construction on resorts in Grapevine, TX and Grand Mound, WA expected to break ground in the next few months. "We also are in the process of evaluating potential new sites, and currently are in negotiations for several US locations," noted Emery. "We are also in preliminary discussions for potential development of additional international licensed/managed properties. Development remains a key growth engine for us, especially as we continue to build brand awareness and a geographically diverse portfolio of properties."
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