Ill Effects at Six Flags?

By Rick Aristotle Munarriz March 27, 2008

2 Recommendations

If going down a harrowing water slide is the kind of experience that makes your stomach turn, it could be worse. Nearly 400 visitors to the Six Flags Great Escape Lodge indoor water park in upstate New York have reported coming down with norovirus.

The temporary yet debilitating gastrointestinal ailment apparently made the rounds at the attraction earlier this month. Some of the infected families are suing Six Flags (NYSE: SIX) over the virus, but that's small potatoes compared with the body blows that could be dealt to the public's perception.

What happens if thrill seekers get apprehensive about hitting indoor water parks? Six Flags wouldn't take too bad a hit, given that the lodge in Lake George is the company's only indoor water park. Rival Cedar Fair (NYSE: FUN) runs an indoor water park in Ohio. Great Wolf Resorts (Nasdaq: WOLF), where cavernous lodges with huge indoor water parks is all it does, would really feel the impact. InterContinental Hotels Group (NYSE: IHG) also has more than a dozen Holiday Inn locations with indoor water parks.

Fears of the highly contagious malady striking conventional outdoor parks will also be problematic, stinging corporate heavies like Anheuser-Busch (NYSE: BUD) and Disney (NYSE: DIS), which run stand-alone water parks.

There is a silver lining, of course. Norovirus and other contagious gastrointestinal viruses struck the cruise ship industry a few years ago. An inflicted passenger quickly spread the virus on board ships run by Carnival (NYSE: CCL), Holland America, and Disney. The sector recovered quickly. Things are going well enough that all of the major players are adding new, larger ships to their fleets.

So like the acute pain that a victim of norovirus feels, the hurt should pass quickly. That's important because indoor water parks aren't cheap to maintain. Guests pay healthy overnight rates to enjoy them. It would be a model-smasher if an asset became a liability.

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Disney is a recommendation for Motley Fool Stock Advisor subscribers. Anheuser-Busch is an Inside Value stock pick and Cedar Fair is an Income Investor selection. Intercontinental is a recent Global Gains recommendation. Take a ride on any of the stock research services with a free 30-day pass.

Longtime Fool contributor Rick Munarriz has been to several indoor water parks, including the Great Escape Lodge two summers ago. He owns shares in Disney and Six Flags and units in Cedar Fair. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.