@Hethetheth makes a fantastic point about why Phantasialand are able to invest in greater depths compared to Merlin parks. But even then, it's not just Phantasialand that are able to do this: look at the likes of Liseberg, Hansa Park, etc - independent parks that are able to invest in large amounts on a regular basis. (I'm ignoring Europa and Efteling because of their other means of incoming).
A better question to specifically ask is simply how are Phantasialand able to invest ridiculous amounts of money? Klugheim was said to cost something in the region of €60-70m. Rookburgh is rumoured to be a larger investment. Maus au Chocolat (2011) and Chiapas (2014 but should've been 2013) cost another €60m between them. The Deep in Africa land (2006) was another €30-40m. That's insane, and beyond anything that most companies could invest in several parks, let alone one company in one park.
How they manage it is still mysterious. The park is owned by the Löffelhardt family, who co-started the park originally. Clever entrepreneurship meant they were able to continue to invest. They also bought Mirabilandia in Italy (they were in charge at the time the park added key rides like Katun), before selling it in 2006 (which no doubt was a big helping hand) in the future. From there, it's simply a case of having ownership that knows how to do business and how to cleverly invest in the park. There's a lot of passion within too which is great.
In some ways, I guess their situation could be likened to what we're seeing at Energylandia. They're owned by someone who is wealthy and already has a great deal of experience in running a business, but also someone who is deeply passionate and wants something they can be proud of. The difference there is they very openly receive EU grants and the like to help accelerate their development, and are going for size and quantity over details and quality (of theming). The amount the park have invested on new rides between 2018-2020 probably could have seen them invest in something of similar depth and quality to any of Phantasialand's investments if they wanted to.
Let's not pretend that the UK are the only place that is thrifty. Everywhere in the world is.
The trouble is, Merlin have dug themselves into a hole. They set high prices and then give out a ton of promos. So of course people in the UK are then going to dig for the best deal. They'll naturally end up complaining that something doesn't represent a good enough value because, simply put, they've be trained to think they can always get something for next-to nothing. Merlin give tickets away because they chose to. Now they do it because they have to.
This is a very common tactic. Have a low entrance cost and hit visitors with high secondary spends. Look at Vue cinemas - many of them have decreased their standard price significantly (my local one is £5 for any film). But then they can hit you with upgraded seats, high costs of drinks and snacks, etc. And people are more willing to do that because they feel they've 'saved' money for their ticket to watch the film, even if they haven't.
Heck, even Phantasialand do this over their winter event. They usually have strong price integrity, so their pre-book online price is only a couple of euros cheaper than buying on the gate, and have very few promotions (and their entrance price is high, around €50). But over Winteraum, especially later in the event, they sell tickets online for €24. Why? Because during the event, they have lots of pop up stalls serving various food and drink (almost like a mini Christmas market), which are extremely popular. People spend a lot of money there and the park recoup any losses they may make from reducing the entrance price.
I'd hardly call any of those parks competition. Drayton is dying. Blackpool ticks along, but when they invest in a brand new coaster, don't market it and then don't see suitable increases, you have to wonder how big a threat they are. And the Yorkshire parks are hardly competition when they barely invest (bar this year).
Towers sees the most investment because Merlin know it's their crowning jewel. It's the UK's biggest park. It's the park that can easily get the highest attendance. It's well known abroad. It has hugely popular and well-known rides like Nemesis and Smiler. Plenty of legitimate world records / firsts that people are actually intrigued by. Towers receives the most investment because it's the safest bet to get a return.
I don't get how you can laugh at Paulton's as being a competitor? They have made very wise investments and continue to do so. They're improving and growing constantly. They're a very legitimate threat to Chessington, whether Merlin admit that or not.
Thorpe is different because of its target market. But it's clear to see that its numbers have been falling and popularity has decreased. It and Chessington benefit from location of being so close to London. But Thorpe needs to really push the boat to remain in a profitable state, because they're really sliding. It's a similar situation to where Chessington were 5-6 years, except Chessington were at least slowly retheming rides to bring them to standard.