Legoland owner bounces back to profit amid tourism and staycation boom
Merlin Entertainments, one of the world’s biggest operators of theme parks and attractions, said it had millions more visitors last year.
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The return of tourists and families enjoying staycations has propelled sales and earnings for the owner of Legoland and Thorpe Park.
Merlin Entertainments, which is one of the world’s biggest operators with more than 140 attractions, theme parks and resorts, said it had millions more visitors last year.
The multinational group saw its revenues surge by 60% to £2 billion over 2022, compared to 2021, and surpass pre-pandemic levels.
It returned to a pre-tax profit of £136 million after sinking to a loss of £94 million in 2021.
It came as 56 million people visited its attractions, 21 million more than the year before, which was affected by Covid lockdowns and social restrictions.
However, the group has not yet seen its visitor numbers return to pre-pandemic levels in the UK, with them standing at about 75% of 2019 levels, chief executive Scott O’Neil said.
Mr O’Neil said that individual theme parks typically raise prices after a big investment at a site – such as the £17 million World Of Jumanji attraction launching at Chessington World Of Adventures last year.
“What we are also finding is that because these [visits] are becoming more important and bigger days out, the spend seems to be higher”, he told the PA news agency.
It reflects a “flight to quality” where people want to enjoy day trips or short breaks at brands they know, and a greater post-pandemic appreciation of experiences, Mr O’Neil said.
Merlin said the beginning of 2023 got off to a flying start, with revenues and visitors up 30% year-on-year over the first quarter.
Sales per visitor grew amid the return of international tourism to cities such as London, where Merlin runs attractions like the London Eye and Madame Tussauds.
The company also said its attractions in Asia were recovering, after years of restrictions in China under its strict zero-Covid policy, which eased at the start of the year.
Mr O’Neil added: “Although international tourism numbers are returning to pre-pandemic levels at different rates, domestic travellers seeking more connection and experiences with family and friends continue to enjoy the immersive and joyful escapism of our city attractions, resort theme parks, and Legolands through day visits, overnight, and short-break stays.
“Accommodation revenue was up approximately 55% in 2022, as guests chose to stay in our creative offerings, including treehouses, castles, and log cabins from California to London, and we are confident our themed accommodation will be popular at our flagship Legoland Resort being built in Shanghai.”
More people booked stays at resorts like Alton Towers in the UK and Gardaland in Italy, Merlin said, reflecting growing demand for staycations.
In terms of the UK specifically, our VAT is significantly higher - double that of Spain, Italy, and France . And so we are at a competitive disadvantage
Merlin, which also owns Peppa Pig theme parks, is set to open new resorts in Germany and the US next year.
The chief executive also called on the Government to take “swift, decisive action” to bring back a tax cut for tourists and encourage more spending.
“In terms of the UK specifically, our VAT is significantly higher – double that of Spain, Italy, and France. And so we are at a competitive disadvantage.
“So as travellers become smarter shoppers, and they do online comparisons, we definitely are advocating for the UK to roll back the VAT.”