Great Wolf Resorts Sees Net Loss in Q1

"Our resorts continued to perform well relative to the overall hotel industry in this extremely challenging economy," says CEO Kim Schaefer. "Same store revenue per available room for our Generation II resorts, which contribute more than 80% of our adjusted EBITDA, was down 12.5% , compared to the 17.7% decline in the overall US hotel industry according to Smith Travel Research data. We believe these results are reasonable, especially given that the Easter holiday and many schools' spring break periods, both of which are traditionally strong demand generators for our resorts in the first four months of the year, fell in the second quarter in 2009."

Company officials were optimistic about the future of their reports, citing recent studies that claim families are staying closer to home to vacation and are therefore looking for great destinations that can be driven to.

"Recent consumer research conducted on behalf of our company points to a new paradigm for our guests," Schaefer says. "While families clearly still value their vacations, many are choosing to forego resort destinations that require expensive air travel. Instead, they are choosing to stay closer to home and drive to their vacation destinations. These trips are generally more convenient and less costly. With our high perceived value and memorable guest experience, we believe this trend should continue."

Construction on the new Concord resort and the expansion of the Grapevine resort both completed in Q1. These completions were the last large-scale projects the company would work on during 2009. Although Schaefer did say the company is actively looking into other opportunities in terms of joint ventures and licensing arrangements.

"We have no significant long-term capital commitments for construction or development of new properties," CFO James Calder says. "Over the near term, we intend to utilize all free cash flow to manage our balance sheet leverage. As is the case with many companies with significant real estate holdings, we are focused on strategies to extend our debt maturities and maintain adequate liquidity while the capital markets remain disrupted."

Moving forward, Great Wolf Resorts will hold off on any large projects. " We do not plan to make any material capital commitments or begin construction on future development projects until we have both the debt and equity capital fully committed," Calder says.

In total, Great Wolf Resorts has $454.3 million in secured debt and $80.5 million in unsecured debt.

Madison-based Great Wolf Resorts owns family-centered waterpark resorts across the country.