Theme park operator bemoans poor summer
Merlin Entertainments is hoping for a sprinkle of magic dust on its fortunes after a summer marred by terrorism, poor weather and increased costs.
The leisure group, which includes Alton Towers, Legoland and Sea Life Centres among its global portfolio, has struggled. It has recorded 0.3% like-for-like growth in the 40 weeks to October 7, held up by a strong performance by its Legoland parks.
The Westminster Bridge attack before Easter hit tourism in the capital, with “demand further dampened” following further attacks.
Hurrican Irma, in Florida, and flooding in northern Italy added to the list of external factors hitting the group’s performance.
“Merlin has experienced unprecedented levels of demand volatility in recent periods,” said Merlin Entertainments’ chief executive Nick Varney.
“Our business model allows us to ‘adjust the tiller’ given the difficult market conditions and we are doing so.”
Merlin is forecasting for like-for-like growth to stay low and will move £100m from its budget for capital expenditure on its existing estate. It will use the money instead to accelerate the roll out of its accommodation programme, which recently saw the opening of a 76-bedroom CBeebies Land Hotel at Alton Towers.
It has also revealed it will open the first Bear Grylls Adventure venue in Birmingham next year. The visitor attraction will be targeted at the adventure-based experiences market and is understood to be in partnership with the NEC Group.
The plans are one of two partnerships Merlin has announced, with the second for a multi-territory agreement with Entertainment One (eOne) to open Peppa Pig themed attractions and accommodation outside of the UK.
Varney added: “The exciting new partnerships with eOne and Bear Grylls, as well as the planned opening of LEGOLAND New York in 2020, show there is plenty more magic to come.”
Merlin operates Madame Tussauds, Legoland and Sea Life venues around the world, while its UK attractions also include Warwick Castle, Blackpool Tower and the London Eye. Currently more than 70% of Merlin’s profits are generated outside of the UK.