Merlin Entertainments have today issued a trading statement warning that the performance of its Theme Park Division will be lower than expected following the serious accident on The Smiler on 2nd June.

As a result of a number of factors following the incident, including the five day closure of the park, refunds of tickets and accommodation to guests, suspension of marketing, and the closure of rides at both Thorpe Park Resort and Chessington World of Adventures Resort, Merlin Entertainments have stated that profits for the Theme Park section of the business is now expected to be between £40m and £50m, down from £87m in 2014. Merlin also stated that profitability could also be affected into 2016.

Since re-opening after the incident, visitor numbers at Alton Towers Resort have seen a drop compared to what would typically be expected for the summer period with many days seeing queues of under thirty minutes. Other theme parks have also seen a reduction in visitors, although this has been to a much lesser extent than Alton Towers Resort. In a bid to rebuild momentum and re-engage customers the Resort recently launched a new ‘Towers Tastic Summer’ marketing campaign and it is thought that the Scarefest and Fireworks period could be key in helping encourage guests back to the theme park. However, the Resort continues to come under intense scrutiny from the media with a number of outlets running stories on various occurrences at the theme park (most recently an evacuation on Th13teen’s lift hill) many of which, as reported in our recent editorial, are simply the rides engaging safety protocols and staff following procedures for such situations, something which occurs almost everyday in theme parks around the world.

It wasn’t all bad news for Merlin Entertainments, with overall revenue expected to grow by 2.8% helping to mitigate the impact of the difficult conditions both at the theme parks and at the London midway attractions (Madam Tussauds; London Dungeons; Sealife London Aquarium and the London Eye) which has seen reduced visitor numbers due to the weaker Euro making London in general a more expensive destination to visit from overseas. Performance has also been helped with costs being reduced by £9 million and a £110 million reduction in debt. Overall it is expected that Merlin Entertainments’ pre-tax profits will be in line with those seen for 2014.

In a statement, Nick Varney, Chief Executive Officer, said:

“The accident at Alton Towers in June was a devastating event, for which we have accepted responsibility and are deeply sorry. We have been humbled by the grace and fortitude of those who were injured, and their families, and will continue to do whatever we can to support them.

“As a result of the accident, we took the immediate decision to close the park and temporarily suspend a number of rides across the UK Resort Theme Parks estate. We firmly believe that this was the right course of action reflecting the seriousness of the incident, the impact on our staff, and to allow the team to focus on supporting all those affected and on the implementation of the new safety protocols, where necessary. In addition, we felt it appropriate to significantly reduce UK theme park marketing activity, in what is a critical period in the run up to the peak summer season. Alton Towers Resort was reopened on 8 June 2015, but as a result of the material loss of momentum, trading at the park and, to a lesser extent, the broader UK Resort Theme Parks estate has been adversely impacted.

“Alton Towers has a proud track record as the #1 theme park in the UK, a position endorsed by its consistently high customer satisfaction scores and the recent recognition as Trip Advisor’s best UK theme park. The resort continues to offer world class family entertainment provided by its amazing staff and I am confident that it will rebuild its position as the nation’s favourite theme park.

“Elsewhere in the estate, there have been strong performances from new attractions and accommodation, and the LEGOLAND Parks Operating Group has maintained its strong momentum. There have been specific challenges within the Midway estate, particularly in London where a weaker Euro has impacted the relative attractiveness of the city as a tourist destination. However, our strong brands and diversified portfolio continue to support a robust Group performance and provide confidence in the medium and long term outlook.”

What are your thoughts on this latest information about Merlin Entertainments’ performance? Have you say over on the Attraction Source Forum. We’ll continue to bring you all the latest developments from Alton Towers Resort.
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