Merlin Entertainments

[Parm Pap]

big trouble

 

 

oh well wetsuits are gone, and cutbacks are in, put stuff in the bin, and then oh look, we win

[Project LC]

Merlin entertainments credit rating has been downgraded by S&P due to its growing debts and cash outflow with declining revenues. 

 

"Persistent high cash burn could lead to insufficient liquidity after 12 months, without further cash injection"

 

All in all thats a pretty poor outlook and it does make me wonder what it means for future investments at the parks. 

 

 

[JoshC.]

Article here: https://archive.is/20250820155054/https://www.bloomberg.com/news/articles/2025-08-20/theme-park-operator-merlin-s-bonds-slide-after-credit-downgrade

 

Realistically and practically, I don't really understand what much of this means or what we might see as a knock on effect. But it certainly doesn't sound positive.

[Inferno]

It’s quite a sad situation really.  Caused, in my opinion at least, by the previous leadership and their unsustainable obsession with only investing in something if it would guarantee a direct and immediate return.

 

Now across the business there are many expensive things to pay for, at the worst possible time given how many UK parks are struggling.

What a rubbish time for everyone working at Merlin.  I really hope they can turn it around soon for everyone’s sake.

[Project LC]

The situation is entirely caused by management loosing sight of how theme parks make money. 

 

The gate fee covers the running costs, the spend in the park makes the money. Management decided to start contracting things out and cutting on maintenance so short term spend looked good. Unfortunately this meant Merlin earns less per head as another company is skimming off the top and guests spend less when unhappy. They lost sight of the absolute basics and now there is very little room for course correction. 

[Inferno]

2 hours ago, Project LC said:

The gate fee covers the running costs, the spend in the park makes the money.

That’s a really good point actually.

 

Back at school years ago we had a trip to Thorpe’s education team, and the guy running the lecture spent quite a long time saying exactly this, and gave multiple examples of how they were maximising that, including bringing F&B in house - that was around the time Merlin’s own Burger Kitchen and Just Chicken came about.

 

It was a long time ago but I seem to remember him saying the admission prices for their parks especially allowed them to run, but it was the spending after admission that actually made them their money, and that’s where they’d managed to succeed, by removing third parties and experimenting with pricing to maximise profit.

 

I think he said they aimed for at least £12 per person at Thorpe, and this was something that was exceeded by a lot.

 

I specifically remember him saying that selling theme park tickets alone is not a viable business.

The admission prices were kept low because they just needed people through the gate. Once they were in, they had 7 hours to convince people to spend. (He had a better way of saying it, but that was the idea!)

 

It seems bizarre that this winning formula, which they very proudly and publicly boasted about, has been abandoned in many areas.

 

I can only imagine greed got the better of the people at the top, and they wanted to do more with less - as is the case with every business now it seems.