As the indoor waterpark hotel market begins to mature, cagey developers are building properties that have the potential to attract customers beyond the weekend family getaway crowd.

“Early on, we decided to develop hotels with waterparks attached to them, not facilities that are indoor waterparks with some rooms to rent,” says Walter Isenberg, president and CEO of Sage Hospitality Resources, one of three partners in CoCo Key Water Resorts. “It's important to maximize the value of both assets, the hotel and the waterpark.”

The partnership, which along with Sage includes Wave Development LLC and Hexagon Investments, plans to purchase, renovate and transform up to 20 under-performing suburban hotels into business hotels during the week and family resorts on the weekend. At each property, the group will spend up to $65 million for renovations and to build a 40,000-80,000-square-foot Key West-themed CoCo Key Water Resort.

Three properties are already open in the suburbs of Chicago, Columbus, OH; and Rockford, IL. Hotels in four other markets (Boston, Philadelphia, Cincinnati and Kansas City) should open in the coming year. In all, the initiative will take a $1-billion investment.

“The strategy is simple,” says Isenberg. “Traditional suburban business hotels are full Sundays through Thursdays but often struggle on weekends. On the flip side, waterpark hotels typically don't do a lot of business on Tuesday nights in October. This approach solves both of these problems.”

The properties will share a number of common elements. For example, most will be branded with major chains and include some type of branded foodservice. To maximize weekday business, they'll have significant meeting space. While the waterparks will be connected to the rest of the hotel property, they'll also have separate entrances to further delineate transient and leisure business at the hotels.

While the group will initially focus on major urban markets in the Midwest and East, Sage says it will consider other locations. “A market like Atlanta, for example, might be a good target for CoCo Key,” he says. “It has a large population base, and it has its share of bad weather, particularly in the winter. But at a hotel with an indoor waterpark, the weather is always good.”