How long can parks survive with zero revenue?

Discussion in 'European Parks and Attractions' started by WillPS, 2nd Apr 2020.

  1. bluesonichd

    bluesonichd TowersStreet Member

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    Will depend on how fast it’s increasing I would think

    Any lifting on restrictions will inevitably see a rise in infection
     
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  2. Matt N

    Matt N TowersStreet Member

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    In an issue unique to Merlin, it would seem that private equity firms have been unable to access the government’s support schemes due to various laws: https://apple.news/AyPQlKgVAR0iKNOksZwdoPw

    Apparently they are trying to get the rules changed, but it doesn’t bode too well for them if the rules aren’t changed...
     
  3. Mr Pearse

    Mr Pearse TowersStreet Member

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    as I said before any money the government would give merlin wouldn’t touch the sides. So it won’t be a massive loss to merlin if they didn’t get it. Obviously it would help with the figures but won’t help the overall loss at the end of year.
     
  4. Funcone

    Funcone TowersStreet Member

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    There might be a case for Merlin getting support from the government. But since their business is registered in Luxembourg, they’d have to speak to the government in Luxembourg. You can't expect to register your company for tax purposes in one country and take a bailout from another country.

    https://www.theguardian.com/business/2010/mar/09/merlin-entertainments-sales-rise-6-percent

    Obviously I don't want to see Merlin go down the plughole, and if any of their theme parks closed it'd be very sad. However, it's estimated that the government misses out on £25 billion of tax every year from tax avoidance. When you look at all this tax avoidance and the misery that austerity's caused, I don't think Merlin deserve any kind of a bailout.
     
  5. Mr Pearse

    Mr Pearse TowersStreet Member

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    The theme parks would never close they would just be sold off and run by a different company. As I said many time’s before when the year is over that’s when it will interesting to see what happens to Merlin.
     
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  6. AT86

    AT86 TowersStreet Member

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    That article is over 10 year old. Merlin is UK registered and pays UK corporation tax (£49 million last year) plus any employment taxes for UK employees.
     
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  7. Funcone

    Funcone TowersStreet Member

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    Thanks, I didn't realise that. When did they register it in the UK? It'd be interesting to know more about this, and what made them change.

    Edit: I'm not an accountant and I don't really understand how tax works for big companies. In their 2019 accounts it makes 9 references to Luxembourg, but I don't have enough accounting knowledge to understand what that means. They don't have any attractions in Luxembourg, so is this some kind of tax fiddle or just something innocent or a hangover from when they were registered in Luxembourg?

    https://www.merlinentertainments.bi...tainments-annual-report-and-accounts-2019.pdf
     
    Last edited: 26th May 2020
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  8. AT86

    AT86 TowersStreet Member

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    You are right it does appear they have a subsidiary registered in Luxembourg, quite likely to help reduce tax liability. However Merlin do pay UK corporation tax on their published worldwide profits.
     
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  9. Rick

    Rick TowersStreet Member

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    Merlin has been registered in Luxembourg for a long time. That said, attractions (or groups of attractions) operate under subsidiary companies registered in the attraction's home country.

    For example, Alton Towers is operated by Alton Towers Resort Operations Ltd, a UK company which is a subsidiary of Merlin Attractions Operations Limited. Also a UK company.

    https://beta.companieshouse.gov.uk/company/06127441

    Accounts with taxes and other filings here - https://beta.companieshouse.gov.uk/company/06127441/filing-history
     
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  10. Funcone

    Funcone TowersStreet Member

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    There's been a lot in the media about tax avoidance and Blackstone don't sound like the sort of people who'd pay more tax than they'd have to. But perhaps I've been overly cynical. I don't want to slur Merlin's reputation if they are paying a fair share of tax.
     
  11. Rick

    Rick TowersStreet Member

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    There's quite a number of reasons to set up business in Luxembourg, tax is part of it - but it's also set itself up for being a good location for a holding company for other reasons too - not pretending it's got nothing to do with tax though, of course it has.

    That said, although Merlin might be considered a British company (it is, in a lot of ways) - it's not British owned and an increasing percentage of its business won't be in Britain. You've got to be based somewhere, after all.
     
  12. Funcone

    Funcone TowersStreet Member

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    While I agree that they have to be registered somewhere, their head office is in Poole, and since they have no attractions in Luxembourg, it doesn't appear to be an obvious location to be doing business. I'm not saying they are doing anything wrong. I know little about accounting and paying £49 million corporation tax sounds reasonable. I'm genuinely interested to know more. But when a regular person sees a tax haven in accounts, it can raise suspicions.
     
  13. Rob

    Rob TS Forum Team Team Member

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    So it looks like although Sweden did not go in to full lockdown and many places such as bars have been allowed to stay open throughout last few months, Swedish theme parks will not be allowed to open this summer. Theme parks will not be exempt from Sweden's ban on crowds of over 50 people.
     
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  14. Matt N

    Matt N TowersStreet Member

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    Did anyone see Rishi Sunak’s address this afternoon in Parliament? I was only asking because one of the things he said is that VAT in the tourism sector is being cut from 20% to 5% until January 2021, meaning that the parks & attractions themselves presumably get a greater cut of things like entrance fees & merchandise fees. Surely this should aid the parks’ recovery?

    Alternatively, fees could reduce, therefore tempting more people to visit!
     
    Posted 8th Jul 2020
    #94
  15. D4n

    D4n TowersStreet Member

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    Sceptical hat on.

    This gives the Merlin parks the opportunity for a huge price hike.

    I'd imagine prices will stay the same at present, especially considering that their parks are hitting capacity, with Merlin taking in the additional income.

    Then, when VAT is eventually hiked back to 20%, this will be used to justify a proportionate price jump.

    Good news for smaller parks though. Hope it saves a few of them.
     
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    Posted 8th Jul 2020
    #95
  16. Tim

    Tim TowersStreet Member

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    I think if the parks suddenly hiked up their prices by 15% next year people would notice! It would be blatent what they are trying to do and most people will realise so.
     
    Posted 8th Jul 2020
    #96
  17. shakey

    shakey TowersStreet Member

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    Don't Merlin hike up their prices by 15% every year anyway ?
     
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    Posted 8th Jul 2020
    #97
  18. Tim

    Tim TowersStreet Member

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    Is it by that much? I don't know, I reached my cut off point and stopped going a few years back.
     
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    Posted 8th Jul 2020
    #98
  19. shakey

    shakey TowersStreet Member

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    Probably not quite that much.
     
    Posted 8th Jul 2020
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  20. jon81uk

    jon81uk TowersStreet Member

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    I think tickets only go up by a couple of percent each year, its usually only £1-2 added to the ticket price nowadays and I think the online price has stayed around £33 for years.

    and in terms of my cut off point, I had a Tussauds and then Merlin annual pass and I think I repeated everything too much, so we've gone down to one visit a year (fireworks) and £33 seems a reasonable price compared to many other leisure activities.
     
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