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Merlin Entertainments

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Article in The Times about Merlin today: https://www.thetimes.co.uk/edition/business/merlin-needs-to-cast-a-new-spell-lmvfw76mn

It's share price has fallen significantly lately and will not make it's profit target this year. They're putting this down to a lack of visitors due to weather and terrorism (mainly for city centre attractions).

 

There was also news towards the end too in terms of how Merlin plans to invest in the future:

"Meanwhile, Merlin is in the middle of an intense period of capital spending — up to £390m this year — and is sitting on a debt pile that totalled £1.2bn in June. Varney’s new tactic is to shift spending away from existing sites towards more lucrative hotel rooms and new theme parks that increasingly revolve around brands such as Peppa Pig."

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Merlin have decimated the UK theme park industry and ignoring advice from advisors will continue to starve the parks of the investment they need despite the huge drop off across their estates. 

 

Put your money into Blackpool, Paultons, Drayton. We need a competitive industry, not the one Merlin have trashed.

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2 hours ago, Mark9 said:

Merlin have decimated the UK theme park industry and ignoring advice from advisors will continue to starve the parks of the investment they need despite the huge drop off across their estates. 

 

Put your money into Blackpool, Paultons, Drayton. We need a competitive industry, not the one Merlin have trashed.

 

Pfft, 'experts' :rolleyes:

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I always wondered why they built the new hotel at Alton Towers to just close one of it's exisiting ones. What a waste of money. Merlin is failing to do well because it doesn't maintain the up-keep of it's theme parks. When money is invested in new rides, they are left to rot in a layer of grime such as the Smiler pit and Colossus for example. Reducing the parks opening hours, removing most the flat rides from Alton Towers and replacing well known food brands with generic, lower quality food with less variety while slowly increasing entry prices and passes does not help to bring in more guests.

 

I agree splitting the invetment between midways and international projects is not going to suddenly fix the loss of income from the main theme parks.

Fastrack may provide extra short term sales, but in a busy park it doesn't work and leads to further complaints from all guests enough to put people off returning.

Social media posts are often plagued by complaints by guests who have had poor experiences.

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The drive for increasing profits has been reducing the guest experience and ultimately I feel Merlin have forgotten what they are actually selling to the consumer. There is no point in a load of hotels for guests to stay if they have no guests. 

They are clearly trying to increase the amount spent per person but have inadvertently reduced the number of people because, in my opinion, they lost track of the basics.

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I’m not sure how much effect terrorism would have had on the resort theme parks, but I saw a graph from one of their presentations of visitor numbers to the midway attractions and there’s no doubt a significant dip right after the attacks in the UK.

 

As for weather that probably has more of an effect on the theme parks than the midways, I don’t think we had a particulary good or bad summer weather wise his year, pretty average. Of course this isn’t the only issues, the parks all have their individual visitor traits, we all know thorpe hasn’t reached the visitor numbers it got back in 09/10/11, Towers are improving but are still noticeably quieter than they were before the acident.

 

It will take time, but I’m sure things will improve in respect to visitor numbers and in turn merlin will be less hesitant in making the investments we are used to.

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Merlin attempt to use The Smiler incident to save money on it’s tax bill but has request rejected

 

Varney must be feeling the pressure if they are that desperate.

Quote

Blood money! Alton Towers asks for TAX CUT due to profits slump after Smiler rollercoaster horror crash that saw passengers lose limbs

 

Alton Towers has risked a public backlash by asking for a tax cut because the horrific Smiler rollercoaster crash hit the firm’s takings.

 

The theme park’s owners blamed a slump in trade on the catastrophe three years ago which left several passengers with life-changing injuries.

It urged the Government to review its £4 million business rates bill – the annual tax it pays on the park – because visitors had been put off thrill rides. But a tribunal in London revealed two weeks ago it had dismissed the request.

 

Merlin chief Nick Varney said after the court hearing in 2016 that the firm had ‘let people down with devastating consequences.’ At a tribunal in London to hear the case for a tax cut, Merlin said its annual business rates payments should be cut because the public had been put off rollercoasters.

 

But its request for a review of payments was dismissed by the tribunal, which said in its judgment: ‘There is no doubt that attendances did reduce following the incident.

‘However, what was not known is how much of that was down to a change in attitude of members of the public to thrill rides, the weather, better alternatives, pricing policy, the possible lack of new appealing rides or a lack of confidence in the site owners (as opposed to the park or thrill rides).’

 

Merlin said its bill had last been assessed two months before the crash. It added: ‘Under advisement following a decline in trading, we requested these rates be reassessed.’

 

http://www.dailymail.co.uk/news/article-5565707/Alton-Towers-asks-TAX-CUT-profits-slump-Smiler-crash-Staffordshire-2015.html

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Would just like to highlight this quote from the tribunal;

Quote

‘However, what was not known is how much of that was down to a change in attitude of members of the public to thrill rides, the weather, better alternatives, pricing policy, the possible lack of new appealing rides or a lack of confidence in the site owners (as opposed to the park or thrill rides).’

Really on point, especially with the often very valid criticism we write on the forums about the parks. On the other hand, I would like to say that I genuinely think a change in attitude with how the parks are presented is happening this year. I don't know if this is the result of a re-evalutation by Merlin to try and appeal more to the guests like us. I'm sure we are all open to offering praise to Merlin where it is due, after all we only complain because we want and know the parks can be better. It's nice to see they may finally be listening and engaging with their closest supporters. I firmly believe if the magic comes back, the guests will follow. I hope it's just not too late for Merlin to turn around. Parks age over time, and for many attractions, the lack of maintenence is really starting to show. I may do a blog on the changes this year as I think collectively they are relatively significant. Existing rides getting worse and a lack of new rides is the start of a downward spiral that hopefully they can reverse.

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Seems remarkably accurate. I’m almost certain Nick Varney is actually Thanos, at least in the theme park world.

 

Once intending to add balance to all the parks, but now with the click of his fingers, around half the attractions are disappearing from the parks. 

 

Either that or budget cuts.

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Another bad few weeks for Merlin with pre-tax profits down 13.7% leaving it with just £43m profit between Jan 1st and 30 June 2018. They are continuing to blame terrorism and weather for the drop.

Some good news is for the theme park division as revenue grew 9.7% like for like in the same period last year.

 

That profit for the size of the company is worrying especially when revenue grew by 10% in the theme parks. If it wasn't for the heatwave I suspect the fall in profit would have been significantly worse. Merlin aren't investing in the parks because they simply can't afford to. 

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Sadly, I think there is evidence that currently the finances and publicity of Merlin are mismanaged, I.e. growth in revenue, growth in visitors, but less revenue from returning visitors. The system of offering free returns to non-annual pass holders after paying for one day ticket is hardly their best idea.

 

Major incidents at "entertainments" require sensible reaction to encourage continuing and returning visitors, whether those entertainments are a one off, arranged on an annual basis or a daily opening location. The investigative authorities have a part to play in this and their co-operation or not, can cause the demise or success of the next similar event. The majority of those who then maintain that "it should be closed, not allowed, or restricted" will be those who don't attend those events, and those who have been sadly affected by incidents. Knee jerk reactions are the main cause of the cancellation of most recurring events, whether that be an injury sustained by a fairground ride, or an aircraft crashing at an airshow. No-one demands that a motorway is closed and grassed over following a fatal accident, rather, "get it cleared, I need to get on", why? because the majority use the motorways.

 

My opinions only.

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15 hours ago, Project LC said:

Another bad few weeks for Merlin with pre-tax profits down 13.7% leaving it with just £43m profit between Jan 1st and 30 June 2018. They are continuing to blame terrorism and weather for the drop.

Some good news is for the theme park division as revenue grew 9.7% like for like in the same period last year.

 

That profit for the size of the company is worrying especially when revenue grew by 10% in the theme parks. If it wasn't for the heatwave I suspect the fall in profit would have been significantly worse. Merlin aren't investing in the parks because they simply can't afford to. 

£43 million profit is surely enough to get basic customer service right though?  Like, bad experiences will hurt Merlin's financials in the long turn as people won't go back.

 

Also, weather?!  It's been boiling.  They're clinging onto any excuse they can because they can't bear to admit that they're failing to run their attractions adequately for their customers.

 

I do think the ridiculously cheap annual passes at Thorpe/Towers won't be doing them any favours, a year's entry for £49 is ludicrously cheap really.

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26 minutes ago, Coaster said:

I do think the ridiculously cheap annual passes at Thorpe/Towers won't be doing them any favours, a year's entry for £49 is ludicrously cheap really.

Wasn’t that the plan, cheap passes = more visits, oh look attendance is up we’re doing something right ?

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9 hours ago, Coaster said:

£43 million profit is surely enough to get basic customer service right though?  Like, bad experiences will hurt Merlin's financials in the long turn as people won't go back.

 

Also, weather?!  It's been boiling.  They're clinging onto any excuse they can because they can't bear to admit that they're failing to run their attractions adequately for their customers.

 

I do think the ridiculously cheap annual passes at Thorpe/Towers won't be doing them any favours, a year's entry for £49 is ludicrously cheap really.

It sounds alot to us of course, but for a company Merlin's size i expect they would be hoping to make quite a lot more than that. 

 

Im not sure how much the cheap annual passes really hurt, your average guest will probably visit once a year, and will most likely use a 2 for 1, suddenly they can pay just £50 and come back again for a year, the real money will be made by people spending in the park as opposed to gate receipts. 

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To be fair, the weather being so damn hot probably puts a few people off going as much as it pouring with rain, as the parks aren't suited for extreme climates (like the rest of the country)...

 

£43 million gets you 1.5-2 DBGTs... Across all the attractions...

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