Pulse Check: The State of the Industry with Skip Taylor

[Music] The WavePool Mag Podcast is made possible due to support from WavePool operators, technology providers, and the growing list of companies doing business in the surf park space. For commercial opportunities, reach out to us at [email protected]. Thank you and stay stoked. [Music] In precursory, explorations for creating this podcast with Skip Taylor, we decided it was simply going to be two industry insiders, talking about the state of surf parks. We wanted to keep it loose and conversational, but pretty soon I realized that wasn't going to happen. Which is fine. Skip has a huge bank of experience from which to draw observations on the state of the WavePool's in the world. In addition, one of the first rules in journalism school is don't get in the way of a story. So I took a breath, stepped back, and let Skip share his knowledge on what it means to plan, to build, and to run surf park in the latter half of the 2020. [Music] Welcome to the WavePool Mag Podcast. My name is Brian. My very special guest today is Skip Taylor. Today we're going to do something a little different. We're just going to talk about the state of WavePool's and surf parks. Skip has extensive experience in the space running surf park management. He's been one of the few veterans in a very nascent industry. Skip, welcome to the program. Thanks Brian. Great to be back to the talk to you. Right on, I think the last time we met face to face, we might have been Waikai and Hawaii. Yeah, I think it was right. That's right. You were over visiting Surf in the Wave and team there. That was great. That was great. So as part of just to give our listeners some background on you, if they don't know you, part of your with surf park management, you worked with Waikai to bring that online as well as some other surf parks. Yeah, we've worked on, oh, I'd say close to 20 different surf park projects. We've been engaged at one level or another and just the way this industry goes, one of them has got over the line. And that was the project with Haseko, which is a Japanese development firm that we built about a, it was about $130 million project on the west side of Hawaii and a Wahoo called Waikai. And we the surf park was the lineup at Waikai and we built the world's largest standing wave with city wave. And it was a unique venue because we also had a 52 acre lagoon to activate and we had everything from stand-up paddle boarding and a, a, a wibbit or an adventure, an inflatable adventure course out there and we had beautiful restaurants, great stores. The project was to take on another 300,000 square feet of retail to hotels, 800 resort residential. Wow. And unfortunately with the climate of coming out of COVID, the ownership there never continued on with that. So it was a great project eight years we spent on that working with the team, launching it, operating it for the first year contract was through the first year operations. Still good friends there, still dropping in surf. I still keep a board over to Hawaii and there all the time working on another project outside the surf park world. But I'm there, you just what every month is still. And so it's great to see the team and everyone doing well there and it's, people are having a great time ripping that wave still. Yeah, so that's and that's really interesting. Hawaii, because that's where I first met you when I was at surfers village years ago. It's rather the North Shore. It's the North Shore. Yeah, you were you were marketing with Turtle Bame. We got to visit there during the winter and that's, yeah. And that's actually how I got into this whole space is that we had 36 holes of underutilized golf. And I headed vision making it a 27 hole golf facility and turning nine holes into an outdoor adventure playground, anchored with a surf park in back in 12, 11, 2012. And so I was starting to deal with wave garden back in the plough days when they had their old plough version before the cove. And the ownership let us do a lot of cool things there. I think you met us where we did surf for the bar with surf from a magazine. We see just did a bit of a flashback pop pop up surf for the bar. Yeah, that it's been renovated and the bar doesn't exist anymore because the new lobby took over the space. But they did a pop up this year with surf for the bar, which is great to see. But out of my work with seeing the surf park space and watching it grow through 20 the mid teens of we launched with a team of us and Kate Thurough is my partner, surf park management 2017. So we're nine years into it now. You know, next year's our 10 year anniversary of surf park management. And it's yeah, yeah, that's amazing. Sorry to jump in their skip. But the in that time, all those years, how many projects have you have come across your desk? Like, whether, you know, that you find or people just said, Hey, I got this idea. How many? Yeah, yeah. I mean, I've had probably 100 projects or people call call or I've called them about projects that they've launched to over the years. And what what is really, I mean, the fundamental transition that's happened is all the calls I used to get were guys that surf that wanted to build a surf park in their community, right? With no background in development, no background in raising capital and a great, you know, call them dreamers. Great guys, right? A lot of them are awesome guys. But without that pedigree of development and finance, it's a tough battle. So and what is transition now is that we're getting just about exclusively everyone we talk to now has a development background. Is a developer, has been a developer, worked in in the space and knows how to get entitlements on land knows how to raise the capital. And as I always say, they know how to put shit in the ground. Right? That's what it takes. So that is and I am noticing that more as the space shifts from the earlier turn style models to more the Brazilian model where it's the anchor for residential community and such. Now as this shift has happened where we've gone from the dreamers to the to the developers, have you seen more projects come across your desk like, oh, this is legit. This can actually happen. Oh, yeah, they're definitely more that are absolutely legit. And that's our role we help refine and make them more legit. The challenge now we find is the, you know, just getting them across the line. The developers are a lot more shrewd and a lot more risk adverse. They've all taken their lumps usually over their times. And so what's happened, especially since COVID, the capital cost to install these have gone up quite a bit. And when you're looking at putting a basic pool in for 30 million building infrastructure around it and doing everything in here, I mean, without much to your part before any of the real estate and endeavors and other things happen, you're in for 50, 60 million dollars, right? And that is a number that has to be justified in whatever scheme they're doing, whether it be the private pool model in Brazil, the commercial real estate model like Virginia Beach or the hospital developments like Waikai, right? These are big, adacious projects that have to be justified. So doing it very good, you know, what we spend a lot of time as market visibility and analysis of what, you know, what the volumes can be. And you know, it comes down to, you know, can you generate, you know, at the low end, maybe 110, 115,000 for some of these pools in surfer visits a year, 150,000 puts you in really good shape, right? And, you know, we know pools that are doing well over that right now out there, but it's all what each individual market can bear. And that's really what the business is going to come down to is, is share of market, what can your market generate? What happens? Wouldn't, I mean, what we're going to see now is a lot of competitive markets. You look at Phoenix, LA, you know, that that whole little Northeasey board is going to become populated with multiple pools now that relegates the market a lot more like the golf and the ski business where you have to be unique and differentiated and think about what your product mix is going to be, what your personality is going to be, you know, is it the public high volume? Is it the exclusive members, some hybrid of that? There's there's all sorts of different ways to position these, but that's really what the space is going to come down to. And I think it's exciting because it's exactly what, you know, can I have lived in the in the ski world and the golf business too? We've seen this happen and how you position each, each resort. And I believe there's room, room for multiple pools. And I I think the first one will be Palm Springs. We'll be the first multi market pool starting this. the summit, right? - Okay, and then in going to, I wanted to step back a little bit. You had mentioned like a project looking for 115,000, 150,000 servers to pass through. In terms of return on a surf park, are there some developers first? Could you give us an idea of what's happening out there? I know everyone's really strict on their data, but if you can give us some idea how returns are. And then also our son developed, developers okay with a five year return, our others okay with like a 10 year return. What are you seeing? - Really good question. - It really is kind of that range. I haven't seen too many people comfortable with a 10 year return unless it's with a very high end real estate model that people can justify that payback coming. Mostly five to seven year return on investment is what is the typical model. That said, the patience comes based on how big and how much it means to the profitability of other elements they're building around it, right? Some don't mind running at a basic break even, right? Just to sustain the product, or if they win fake a small amount of money, but they don't need to put it in. If there's a larger and bigger picture and those come with a lot of these large scale developments that have hundreds and hundreds of millions of dollar real estate at the column. I know that for instance at the private club in Cabo Real, they've sold well over $100 million real estate on the excitement of having a surf pool come into play, right? So a commitment to the pool. And those models is kind of interesting because once they build it, the operating costs all fall back to the members. So their membership dues pay for it all. So the capital and that whole thing gets paid back through the real estate transaction and memberships take on the operating costs of the pool. And again, talking about that and that project, Mary Weather is doing Cabo Real, correct? Correct. Mary Weather is the partner with the Mexican hotel you family that bought the land and lean into development. I don't know their partnership arrangements, but they have a partnership program. Yeah, but again, going back to like the dreamers and everything, I mean, Mary Weather strikes me as a company that is surfer owned and operated. Yes, but I would say full of experienced developers that people coming from the ski industry and the finance industry and having that background and capability to bring this to life, right? So they've had an extremely successful sales cycle right now on their first generation similar what happened in Brazil, right? So and I think you'll see that Discovery Land and you know, it's really interesting. They've had a very successful sales cycle as they've taken on an old dilapid venue that didn't work out into in Austin to something that's you know, gonna be a shining star of the surf park industry, I think. Yeah, and yeah, we're disposing something on that and it's told quite a few, quite a few units already and they're kind of popping their head up and appearing on social media and through the newswire. So I think there it sounds like they're, sounds like they're ready to go. Going back to like who is developing the pools. Right now, if you were just to kind of like, you know, without drilling down into data, just casually look at the space. Do you see what percentage do you see as presidential developments and what percentage as turn style development? We aren't really seeing any in our world or we aren't really taking any on that are just a strict turn style model, right? Any more? - Really? - Just about exclusively all of them because they're working with developer, developer would never look at this without a real estate scheme attached to it, right? Whether it be a simple, small boutique hotel, there's in every case of projects we're working on right now. It could be considered a turn style development. There's project care and Victoria we're working on with a golf course development that they're building 1500 homes and the homes aren't necessarily directly attached to the project, but it is all about creating an excitement for the real estate and the residential development and there will be a hotel attached to it too. So, you know, but it's a classic model where we're in a market where 400,000 people live, right? Small market. So trying to get and justify that commitment and we've shown that we were very close to making it financially viable, but you know, to pull that trigger, it takes, you know, there's a leap of faith that a developer has to take, you know, build it there will come. So, you know, you go through that, but you get back to it's, I can't think of one that we were talking to in the last probably two years that would be just a turn style concept, right? Yeah, now do you see the future landscape of surf parks and waypools changing, you know, 10 years ago? Yeah, you know, residential mixed use development. It does, you know, it's funny, Brian, it goes back to that one of the really surf parks so much if you remember, was down at Florida, at we did it at surf industry show there, right? - Surfactical. - Surfactical. Yeah. - And I did a presentation there that was really relating to the background that I lived through working closely with a company that was called Interwest. And they're basically claim to what the transformation of the skander show they made. They talked about how they turn the uphill transportation business into a real estate model, right? And that was through the, you know, early development of Black home purchase of Whistler expansion to dozens of other ski resorts through North American Europe that all had real estate components to them, right? And I really wanted to emphasize that, although it was very cool that what was happening right now when these initial turn style venues were opening that the real future was going to be real estate driven. And, you know, it's been interesting to watch the surf park summit turn to a tagline that ties in real estate, real estate adjacent programming. And it really is the true future of this space. We're not a water park model. It's a lot different than that early model. And it's great that those guys, some of them have proven themselves really well, like in Sydney and Melbourne and those, you know, the standalone and the wave and Bristol, fantastic, right? So having that track record of a turn style work and I'm sure there will be more. And people are doing that. And you know, hey, he's on her team's launching more that are just turn style things and that's great. But I think how you de-risk these projects in most and how you justify raising the financing and the capital is through having that diversified business model of some real estate scheme tied to the operating model too. And that's really what is going to, and that is what is accelerating the growth. And I think the number, how many parks I've just saw the note other day coming, 15 new parks coming up. - Yeah, 15 new ones. - Yeah, so I mean, that's impressive. And I don't know the number. I'd have to look at it with you. But I wonder how many of those are tied to, you know, some form of real estate scheme too, right? - Yeah, that's a really good point. So as we go into this, you have experience from WaiKai and helping make the lineup work. 'Cause right now in my conversations with different CEOs with different surf parks that are still turn style models, there is so much fine tuning going on. And everything from data recuperation to, you know, just trying to make profit and still keep the customer experience at a high level. Can you share with us some of the challenges you had at WaiKai trying to make the whole thing work? - Yeah, I think, I mean, one is you make assumptions on a market, right, that you're into your programming pricing based on who can come one seeking what experience at WaiPrice is the foundation of how you build your performance and your projections, right? And it's never right. It changes, you know, when you get going and you got to quickly pivot, be ready to react. You got to change pricing. You got to change what sessions you're offering. You got to change the mix and react to what the demand is there for the in reality, right? So I think that's what everyone has to go through that problem unless you're in a market where there's another surf park down the road and you can kind of see what's going on. You're gonna always have that quick adjustment and the challenge is, is being able to quickly react and adjust and get the team to help move that ball and react quickly too. So the other bigger problem in early parks that have opened including WaiKai is the systems management, operations in the back, of how everything operates. And it is a, there are some incredible systems like Disney and Universal and you go to these big ticketed venues, but those systems cost millions at dollars. A single one-off surf park can't afford that. So you're cobbling together systems from your POS to how your RFID wristbands work to your accounting systems and everything has to be called to work together. And it's challenging. And what is happening now is people are solving that problem and coming up with a better turnkey solution. The pain we went through and trying to integrate early day video photos, right? It was, you know, we spent a lot of time working with surf line working through that and others have come along and, you know, in flow state and people are doing a great job, right? And it's awesome to see, but, you know, you had to be on the forefront in these early surf parks to figure it out. And a lot of those things were very costly investments that you had to often throw away and start again because it just didn't work properly for what you needed, right? So I think that's an interesting thing. I want to bring up booking systems because everyone I've interviewed has struggled and struggled with that. And it's huge. So many times I'll talk to someone and I'll be, oh, we got a new booking system. We ironed up these problems. But, I mean, that's the first point. - Oh my gosh, because we know as the complexity of inventory, it's not just selling a ticket to an amusement park because we have the complexity of inventory. You can only have, you know, 12 to 15 people on the right, 12 to 50 people on the left. And you know, all these different zones and then you have inventory of goods and product from equipment too, right? And how everything rolls up and tracks and works across retail, across food and beverage and all these different business units. This is, you know, the integrations are troublesome. There's some great new systems that are coming out right now. At the surf parks time I had a group from the ski industry has come in that has, you know, said this, this is what we do. This is how we know we can fix this and they've come in. You know, there's a couple teams that have formed some systems too that are one of the groups, the something seven that's working for seven max seven out of Europe that's working with endless surf right now. They have a fairly robust system to hazel and her team develop a fairly robust system. And but everyone's done it out of their own need from the ground up and it takes years and a lot of learning, tough learning on the way to get these systems to work. So launching a park today is a much easier task on the system side than it was, you know, three, four, five years ago, right? That was much more difficult to do that. And you know, you're making your commitments a year in advance to these systems too. And a lot of times things change by the time you set up and get going, right? So that's that, you know, what, what, it's like the pool technology led the way and the rest of it is tailing, following that, right? I'd say the wave technology has cut a course that we can have more confidence than are, the rest of the systems and operations. And then there was one other area Brian, I'd mention two is that in the space, you on open a surf park, it's the staff and hiring of these, what is unique and specialized industry? And you don't have a background, you know, you open up a hotel, you open up the ski resort, you open up a golf resort, there is schools and programs where people have gone to school specifically 'cause they want to work in hotel management and operations. Same in these, in the sports fields, a golf and skiing. And right now we don't have a base to draw from. So we're trying to pull people from maybe have experience in one of these other similar industries in the hospitality or recreation. It is challenging finding some of those top roles, the key roles that are fundamental to make your success. And that is definitely, I see one of the industry challenges right now that as 15 new parks roll out right now next year, yeah, that is a huge challenge to have a pool of people who can operate at the level. It's the level of operational knowledge someone has to have to be the GM of a resort, it's huge. Right. And I'm wondering right now, as we roll into these 15 new parks opening this year, how many of the GMs will be from other venues, you know. You know, they've moved locations, changed countries or whatever. Yeah, how many will, we know have the learning curve to come up to see? Exactly. So you're gonna get someone who is a two IC, maybe one of the other parks that gets to step up and be a good GM at another, right? And that probably is what some of these parks will see happening as they launch. I just saw one of the guys from Alaya Bay on LinkedIn has jumped into the GM. I think one of the roles in one of the parks in the Middle East, right? And that's great. I mean, that's what it takes to do, but it's still 15 GMs have to be hired right now this year, right? And that is a challenging task. So that's an interesting one too. So I've been talking with Jess Pondton a little bit about how we form maybe a beginning of a certificate program that could lead into a degree program, maybe tied to universities or programs that would help bring people to it. But I mean, one of the bigger tougher jobs that these places to is there's a whole technical role in a mechanical and engineering and water management, right? And that is often overlooked completely as people go into just running a surf park and forget that this is a highly complex mechanical engineering and water technology system that has to be nursed every day, right? And every, I mean, the complexities that you have to manage from making sure that your chemical treatment of the water is being on to making sure your systems are operating spot on. And yeah, the technical companies that provide you it from whether it be a wave-garner analyst surf for perfect swall gives you a product. They're not there every day anymore, right? Right. You're there left doing it. They manage it. They'll tell you and help you, but you still have a huge job in keeping that system moving smoothly. OK. So let's talk about that. We talked about booking systems, advancing, everyone's, coming up with their own, they're having to invent. How about water filtration? I mean, seem for like for so long, they simply just kind of copy-pasted from water slides or generic way pool. Do you know of water filtration systems evolving to meet the new demand? Yeah, definitely. I'm seeing a lot of interesting stuff. Obviously, wave-garden has their own hand-house technology, which is proven and successful. And being good, every other pool is working. And they may recommend other partners and stuff to go to, but they don't provide it. So wave-garden is the only one with an in-house system right now. Chemical costs on any of these systems that people are using are way higher than we originally expected. Right? It's been a big surprise to-- it's a very big cause. Why can't it really cost us on how much we have to spend on chemical from our original-- Can you give an example? I'd love to hear that. Well, to the tunes of hundreds of thousands of dollars a year difference, right? Then we anticipated. So I mean, that's the big part of your margin that you had anticipated and having water treatment costs being way higher than you thought. What I'm seeing is there's a couple great systems out there that are refining the guys with Martin. And I think the blue-mar technology is pretty interesting. The challenge is you have to pay more in the capital costs up front, but you pay way less on the chemical costs the way back. They do spot zone treatment where they take-- instead of just doing a general dump of chemicals in the whole pool, it reads different sensors throughout the pool, which is-- and then treats what is needed to keep the chemical levels correct. And it's pretty interesting. But again, the decision comes down to the developer going, you know, it always comes down to-- it's called value engineering in the development business, right? And you will have your business plan and your capital costs all spelled out. And then you're going to get a couple of-- this cost has gone up by 5 million over here. Where are we going to save 5 million on the rest of it? So typical stuff is that what we always joke about is that I always like to get a good line on it and then on my audio and visual equipment early. And because that is always an item that a developer hits first, right? And people don't understand how important that whole piece is to the entertainment and venue and stuff. always maybe push a higher level. So if they when they do shave it, I still have enough to have a decent system there, right? But the funny one is water treatment would get attacked and be let's put in the less expensive one and push the problem to operations where you're paying more for chemicals. Okay. So you're moving from your your cap X expenses to your op X. Op X. Yeah. So that is, you know, decision making and that is, you know, valid at the time because you don't want to not get the project in the ground, right? And a lot of decisions get made that push problems out to the future that that then get recognized, you know, down the road and can be a huge impact to the operator at that time who's left running it, right? So we try to be very conscious and make our partners very aware that those problems down the line could be have great ramifications, right? Wave technology. I know there was a pre-COVID period where wave systems are evolving. So quickly that things became outdated, you know, quickly, quickly designed technology to where do you see technology now? It's I mean, it seems pretty pretty stable. What's your what's your take on the wave pool technology today? Yeah. I mean, what you're seeing the evolve and is on on improvements to a technology that have been now refined. They've produced millions and millions of ways whether pneumatic or paddles and, you know, or Kelly Slater's police system, right? That they've they've the cable system with the is is all been shown viable. And now it's just refinements on those. The biggest thing that I always say to developer and make them understand clearly is that when you buy a technology, this is a 20 to 25 year relationship that you have to be able and have confidence that this system will be serviced and not be abandoned or the company won't be there in five years or two years, right? That they have to be on super strong economic footing. You have to clearly talk about because it will change, you know, 10 years from now, what we see a waveguard doing that, you have to have know that they will still be providing the service and to the system that you bought today. I have confidence in in multiple of those companies out there right now. Some I say still have to prove themselves further before I would confidently recommend them to a client out there in terms of reliability and capability of a long term service partner with us. So it's it's good. I think it's really good. It is stable. It is consistent. Everyone has a few problems still in some of these areas of different texts where there would be, you know, overheating. There's some basin problems that still come up and those sometimes aren't necessarily wave tech related, but the wave tech usually gets pulled into that because they're it's associated. It's in their pool. So there's there's there's always refinements and improvements, but it's it's definitely been de-risk significantly. And that's the biggest thing you want to be able to have know that you only are going to have a couple down days a year, right? It's like a chairlift, right? When a Goddollar system goes down, it's tragic, right? For a ski hill right now when they lose a lift and have to can't run for a period of time, right? And that's the same thing for at a wave park. You cannot, you know, and you we've all seen it. Some of these parks haven't to go down whether it be for days or months. It's tough when that happens. Well, let me yeah, let me ask you about that drawing comparison to the ski lift industry. There must have been some curb where it went through radical change, radical evolution. And then at some point kind of platose with the technology that the chairlift we get in today is the same chairlift we got into, you know, 20 years ago. Is that the case with chairlift? Yes, there are a lot you can do to evolve and would way pools do the same thing. I think, it will be the same thing. It's all about maintenance and quality of maintaining your equipment. Example was kicking horse Goddola at in the in in Birch Columbia ski resort. Their Goddola went down midwinter last year. A couple of Goddolas coming off the track didn't load right. They fell one fell off as it was coming out of the Goddola. They had to do an engineering review and there's a problem. They lost their whole season. Dressed the season with that gondola. They had to only be that forcing they have chairlifts too. But it was tragic for that resort to do that, right? To have to do that. And you know, that's, you know, that gondola had been installed quite a few years ago. It was being maintained. But I don't know. I mean, I want to speak to it. The manufacturer, the maintenance team at the resort. But it really comes down to the level of quality of maintaining that year after 10, 15 years that you don't have to shut down for six months to redo it. You've got to be on top of it and making sure you're spending the money replacing the parts upgrading the parts because you'll get, they'll find new things on how pneumatic or paddle wave has moved and you might have to replace 60 units of something for a couple hundred thousand dollars. But that's better than being down and losing millions of dollars for months as you have to repair something once it fails. So it is keeping a really good residual fund or a capital fund that you put aside out of your operations it's very strict. I mean, we typically put, you know, two to three percent of income into a capital reserve fund just for those oh shit moments, right? Or making sure that you have that in. I know a lot of venues didn't or don't plan for that. And it's like it's, it's just the, you know, the procedures that you need to embrace that are needed in the level of operation that these technologies are and this sophistication of the surfpark, you need to be very diligent in doing that and not and not operate without a capital reserve fund. Okay. Okay. And one thing I did want to ask you while I have you here. So say I want to open a wave. Well, I've got land, I've got approvals, I've got investment. What's it going to cost me for basic infrastructure? If I'm going to build something like say urban surf Sydney where it's, you know, the not super fancy, just basic buildings, turn style. Yeah, yeah. I know it'll be a bit more than Melbourne because Melbourne is shipping containers. And what price range are we looking at? And this is for the curiosity of our list. There's, yeah, I think a good number you could put if it's a lagoon pool, you know, the typical lagoon pools that most people are building right now, you're going to be in for about 30 million for the lagoon pool, right? Okay. 25 maybe if you can push it down a little bit, but let's call it 30, then you're going to have your structures and your buildings and your infrastructure and your civil around that, bringing everything in. And you know, you're going to build it, you know, 25,000 square feet probably of space that's needed to surf operations, restaurants, retail, back-of-house offices, all that stuff. These are just ballpark numbers. And you know, that's roughly going to be probably another 20 million dollars, right? Of cost, right? So, okay. Basic is 50 million probably before you get into land costs and, you know, putting the rest in and typical where I see a lot of projects are running, they're getting up to 60, 70 million, right? Before, and then you got, you know, if you put in a hotel or a real estate around it and that then drives it up to, you know, closer to 100 million and then some of these projects with bigger real estate holdings, it's getting up to be 150 to 200 million, right? So, those are the ranges I'm seeing right now. I'm out there in discussion. Okay. This is this is great because we just get to ask you questions and you're kind of like an accurate chat GPT. I can type in a question. I know the answer is going to be real. It's not going to be hallucinated or made. Yeah. Well, looking at, well, let's get your opinion looking at some of the parks and operation today. Are there a few that really strike you as, oh, wow, they're doing, they're doing a great job. This is going great. I really respect what they're doing and it's working for them. Yeah. I mean, I'll tell you just ones that I think are very impressive in terms of being successful business models is what Mickey has done at O2 in Munich. Yeah. In Munich in terms of town. Yeah. I think it's great that he's getting, I mean, it's such a great market is such an outdoor, active town. The heart of their kind of outdoor sports business of all of Europe is the hub there. Being near the airport, having the windfall of having O2 as a sponsor there and, you know, as a stand-alone turn style model, it's probably one of the stronger ones in the world. I would think right now performing I mean, why is it that we're doing this? getting good turnouts of the winter, which was one of my biggest questions. But they had to face the reality of downtime in the winter too, just like any venue and, you know, they're always hopeful they could run year-round, but they're facing, you know, now realizing that is best to not try to maybe operate, you know, 365 days a year and a market that does have a real winter that hits them too. So I think they're making adjustments, but doing still good in the colder months, which is great, right? So I was great to see. What they're doing in Scotland is been super too, right? And, you know, it's a smaller market there too, so it helps us put a gauge to a seasonal small market. Like, I totally are working with the developer here in Victoria on a project, and in Victoria, British Columbia, and similar weather, similar conditions, and it gives us kind of a good gauge that that size of market could be viable for a surf park, and they've seemed to embrace things and do things really well. And, you know, I think the standards of, I was super excited to see Virginia Beach in person for the first time at the summit this year and take that all in, but what was most about, impressed about there was the multiple levels of real estate integration, hotel, condominium, music venues, retail. It was really the true mix of a real estate model, being amplified through the surf park, right? And it set a great example for other developers to see how this mixed real estate model can work really well. And then, you know, hats off to the guys at Sydney and Melbourne to, you know, continuing on with, you know, they got a great machine going down there and they do a really good job down there. Continuously, I haven't had a chance to venture to the private clubs in, in Brazil. I think those are solid models too. And it's a real space that I think makes these pencil really well without having to rely on, you know, getting 150,000 surfers visits a year. You can still build a model. That's a low volume model of play that gets fed by a high end real estate and high end membership model. So that's, that's really good to see those examples too. So it's, it's foreign wide and, and you know, I give all these guys kudos. There is though, you know, there is parks that are out there that I know are struggling too. Still, right? And, you know, the reality is this point we're at in this industry is we're still a developing industry. I've, one of the speakers of the summit this year described the sophistication of the industry is that, you know, we don't become an institutional category of investment until you have buyers. We have builders of parks right now. We don't have buyers. You look at hotels, you look at ski resorts. Those entities are traded and bought and sold. There's people out there that are still buying them and investing in them, right? As buyers of a existing park. So there will now become over this next five years. They'll start to see buyers probably of looking at these in the space. They'll be interested in who these buyers are. But sadly, some of these buyers are going to be opportunistic, taking advantage of, you know, some people have to do some tricky financing around COVID to survive, right? And that's still haunting them on their books. I don't know much about it, but I think a little bit about what happened. The wave was probably a victim of how financing was structured on the back end. Not bad operations or poor operations. They're operating great. It's just, you know, who controls the strings on the back end and who can make decisions and who needs to be, you know, has loans that need to be, you know, recalled at a time when they're not getting paid back properly, those loans. And I don't know enough about the background of every project out there or even the wave, but I know from my background and other projects and developments when the lenders come for their payments, so you're not able to keep up to the payments based on the structure. It's not always about bad operations or a bad business model. It's about how things got structured and what you might have overruns and had to take extra loans and extra stuff that when money's needed in a tough times, that money comes at a higher expense. And that sometimes will haunt a project. And I do not think a few projects are going to be acquired by almost a predatory model, right? Of acquisition. So, so it's been the same in ski and golf. A lot of times the second or even third owners of the ones who reap great success out of a place and to the consumer, they've been skiing or golfing out the resort for 20 years. It really hasn't changed, but it took the second or third owner to make it financially viable to come in. So, you know, look, come in and buy it at 75 cents on the dollar and then it makes sense, right? Okay. A lot of these developments, what I'm hearing from you is, you know, there's so much passion behind them and developers who really want surfing as, you know, the focus as the hub. Do you think if you were to take the way pool industry now compared to say, say it was something like, bowling, is there a certain quantitative amount of passion that you think maybe pushed these surf park projects ahead and made them happen, whereas if it was something that people and and am biased here, I'm saying people are more passionate about surfing than bowlers are about bowling, but that's just me on my own high horse. So, do you think that enthusiasm, that passion has kind of pushed these to get done, whereas if it was something a little special less magical, they wouldn't have been done. Yeah. Short answer is yes, that passion drove the lines of the early surf parks and early technologies rushing them get out, just prove that they work with flaws and then fix them up. I'm having a hard time wrapping my head around bowling. I'm going to. I'm going to. Well, it's the substitute. I get it with the end. I don't know. I fall back to my world of scheme, but I mean, all the early ski hills were built with a lift to lodge and by a passionate skier that, you know, in a families of skiers or groups that got together that figured out how to run a rope toe up a mountain with a diesel engine off a truck and that's how they started. It was passion, right? And surf parks were the same, right? And it's great, but now there, you know, hundreds, you know, tens of millions of dollars up to hundreds of millions of dollars. And then it's a lot more at stake, right? Then the backyard wave pools that, you know, and we have to, you know, the business of it comes more into play. But you're right about how you maintain the passion. And there's so much culture and passion and surfing that I think the people that are running and working at these surf parks are all part of that passion and culture that I think we're fairly well protected. You know, it'll come down to, you know, in the skandish where there's the veil resorts and the altaras and these groups that own multiple ski hills and they create systems that work across multiple and they get the benefit of, of having accounting and back end systems that work across all systems where they get in trouble. And we've seen it else, you know, speak to my experience for the veil resorts as they try to do central marketing from Brunfield, Colorado and, you know, sending out notices about marketing at Whistler where they're not part of the Whistler community or culture. And they miss the mark, right? I'll get a powder alert for 13 years of Whistler. Well, that was two days ago. And that powder was skied out in the first hour. And, you know, sending me a note about a powder alert from two days ago is like they just don't get it, right? And it's just how these groups and, you know, we know, you know, there's the avancers, there's the beach street groups that are looking at multiple venues, which is great. And they're kind of looking at the same model of the veil or how terrors. And I think how they set up their systems and programs, you know, yes, take the efficiencies on the back end, but the front end and the community and the work that has to be done there, that's hard, deep work that can only be done at a local scale. And that's, I just hope that that type of passion and connection to local communities, whether you're an in-line community in Alabama or a coastal, you know, surf park in Hawaii that we done that we did, it's like that connection to that community is everything. And that's how it has to be built from the ground up with people there with the passion of surfing. And so there's a mix between passion and business, I think, is where I'm going with this dialogue here. And it's wonderful. And it's so great to get your take on that and to, for sharing your insights. Thank you so much for taking the time to do that. And you have insights like a few others do in the industry. So I always value and appreciate our conversation. So thank you very much, Skip. Yeah. - Yeah, awesome, great to talk story again with you. - Yeah, yeah, you too. And we'll catch you up with you next location. - You bet. - Okay. (upbeat music) (upbeat music)