Published by Mark Heschmeyer/CoStar News
Published date: May 2022
Alpine Acquisition, which raised more than $100 million in a blank-check offering last fall, is ready to return that money to work backing former Great Wolf Resorts indoor water park executives with plans to open immersive entertainment destinations.
The strategy is the latest example of how real estate developers are seizing an opportunity to give new life to hospitality properties walloped by the pandemic.
A new special-purpose acquisition company, known as a SPAC, has contracted to buy two hotels in its lead-up to acquire Two Bit Circus, a technology-focused leisure complex operator. The properties will be rebranded to Revelers Resorts, using Two Bit Circus’ entertainment experiences that include virtual reality and arcade games.
The combined company is expected to be renamed Two Bit Entertainment and listed on the Nasdaq Stock Market under the symbol REVE.
Two Bit Entertainment’s executive team has experience in developing, managing and building custom-brand family entertainment for 20 years in leadership roles previously with Great Wolf.
Blackstone Group acquired a 65% controlling interest in Great Wolf in the fall of 2019, forming a $2.9 billion joint venture With Centerbridge Partners.
“As we emerge from our homes to gather again, we see a huge opportunity to bring a new location-based experience to life,” Kim Schaefer, CEO of Two Bit Circus and previously CEO of Great Wolf, said in a statement. “As people plan their getaways, we’re seeing a resurgence in drive-to destinations for new and unique experiences that are engaging and fun for people of all ages.”
The pandemic wreaked havoc on location-based, in-person everything, according to Schaefer. For many local conference hotels, the impact of COVID continues to leave rooms vacant and conference spaces empty, with a return to “normal” levels not expected for another three to five years.
The hard-hit segment of the hospitality industry provides perfect real estate for reimagined drive-to entertainment destinations for families and adults of all ages, Schaefer said.
Purchasing existing conference center hotels in strong demographic locations at deep discounts to their replacement costs is expected to allow the new brand to quickly enter new markets, provide affordable entertainment and lodging accommodations, and grow quickly and profitably, according to Alpine. These hotels already have the full-service amenities needed to adapt and renovate to the new brand along with leveraging Two Bit Circus’ immersive entertainment.
By 2028, the indoor entertainment market is anticipated to be more than $85 billion, according to Global Market Insights. And 70% of people younger than 25 prefer gaming to watching videos.
Revelers Resorts aims to provide immersive story experiences around circus adventures and a platform that hosts thousands of electronic games and gaming workshops. The resorts will also have one-of-a-kind social-play attractions and other games.
Alpine has entered into a definitive agreement with affiliates of Atrium Hospitality to acquire two full-service conference hotels with 739 rooms and 140,000 square feet of conference facilities located in Denver, Colorado, and Stamford, Connecticut. Alpine will pay $65 million for the two hotels: the Hilton Stamford Hotel & Executive Meeting Center and the Crowne Plaza Denver Airport Convention Center Hotel.
Upon the closing of the property acquisitions, Alpine will pay $50 million to acquire Two Bit Circus, which will commence renovations of both properties. The transactions are expected to close in the third quarter.
“Two Bit Circus is an industry leader in experiential technology entertainment, and we look forward to joining with their talented team of innovators and their extensive portfolio of social experiences to create a new one of a kind world-class family entertainment brand,” Elan Blutinger, chairman of Alpine, said in a statement.