After steady growth for the past five years, the number of new indoor waterpark resorts in the U.S. and Canada is expected to decline this year, according to a new report. The study by David Sangree of Cleveland-based Hotel & Leisure Advisors projects 18 openings this year—13 new waterpark resorts and five expansions of existing properties. Last year, 21 hotels with indoor waterparks opened or expanded.

Two of this year’s openings will be waterpark destination resorts, which Sangree defines as resorts with more than 30,000 sq. ft. of indoor waterpark space. The Great Wolf Lodge in Concord, N.C., will have 402 guestrooms and 81,000 sq. ft. of waterpark space. The Valley of the Springs Resort will be a 156-room hotel with 40,000 sq. ft. of waterpark space in French Lick, Ind.

Despite the development slowdown, the industry is still performing well, Sangree says. Great Wolf Resorts, the largest indoor waterpark resort operator with 11 properties, reported higher occupancy at 68.6%, and an average rate of $256.37 for the third quarter of 2008, compared with a year earlier. The company plans to report fourth-quarter results on Feb. 25. Great Wolf and other indoor waterpark operators are doing well because more consumers are vacationing closer to home, Sangree says. On a negative note, however, three resorts filed for bankruptcy in 2008.

Sangree is tracking 300 proposals for new indoor waterpark resorts or additions to existing properties, he says, but the pace of development is not expected to rise over the next year. “With the current challenges in the financing market, we project a slowdown in growth in 2010 but potential for increased growth in 2011 and beyond as lending opportunities increase.”

This segment of the industry has grown to 132 properties in the U.S. and Canada, nearly double the number in business in 2004, when the total stood at 64. The roster of resorts includes 46 waterpark destination resorts.