The operating costs as applied in the Pro-Forma Financials were taken from the feasibility study and are based on numbers provided by the World Waterpark Association of which we are a member.
The largest expense items of a waterpark are (in percent of cost)
· employee salaries 29.3%
· Interest on LTD 8.3%
· Marketing 5.7%
· utilities 5.3%
· repair and maintenance 2.5%
1.1. Employee Salaries & Wages
After talking to the owner of H2Oasis we were made aware that he found that his biggest problem was to control his cost line for salaries. Dennis Prendeville of H2Oasis experienced 34 % of sales for employee salaries in the first year. After the first year and some more experience, he has now brought down the cost for employees to 28 % which he feels is an acceptable level and should be achieved by any operator. This number is also suggested by the WWA.
The feasibility study suggests the following staffing for the park:
We feel that this number of employees is more than sufficient to run the facility. However we decided to err on the safe side and accept these number as accurate.
To make sure these expenses are budgeted appropriately we checked the numbers given to us by the World Waterpark Association against the actual numbers from Anchorage.
The anchorage numbers for utilities confirmed the numbers from the WWA. We have included actual invoices from Anchorage on the following pages as well as a communications from MB Hydro comparing the rates in Alaska to the current rates in Manitoba. The findings here suggest that the expected costs for utilities are within the expected percentages from the World Waterpark Association. Below numbers are based on a 40,000 sqft metal clad building with a total of 325,000 gal of water in all pools.