Merlin Entertainments: General Discussion

[GooseOnTheLoose]

Merlin CEO Fiona Eastwood has done a 40-minute interview with the BBC for anyone that wants to listen - covers the challenges they’re facing and Minecraft among other issues:

Our biggest competition is screens at home, says theme park boss

Merlin Entertainments Fiona Eastwood sits down for the BBC's Big Boss Interview.

www.bbc.co.uk

Thanks for the find!

BBC Sounds link to the interview, for anyone who wishes to listen to it (sadly UK only).

Big Boss Interview - #5 Merlin Entertainments CEO, Fiona Eastwood: Our Biggest Competition? Kids On Screens - BBC Sounds

Theme Park operator boss talks about the opportunities and challenges that she deals with

www.bbc.co.uk

 

[GooseOnTheLoose]

Double post (and soon to be triple), whip me.

Here's a full transcript of the interview (broken into two because of the character count), for anyone who wants to revisit it, prefers reading, or wants to skim it:

Part One

Fliss Hannah: Hello, welcome to Big Boss Interview. I'm Fliss Hannah, and I'm about to chat to Shaun because, Shaun, you've been interviewing someone about the ups and downs of their business.

Shaun Farrington: I see what you've done there, Fliss. Yes. Fiona Eastwood is the Chief Exec of Merlin Entertainments. People might not see the word Merlin plastered around the theme parks that they go to around the UK or around the world, but they are a huge business. They have lots of the Legolands under their watch, Thorpe Park, and plenty more in the offing as well. So that was actually a key part of what we spoke about is how on earth they come across which brands to partner with, which ones might be coming down the line further in the future. So Minecraft is one that springs to mind. Why Minecraft? Exactly. How, when, where? All of these questions we get into. And the running of the businesses behind that because actually, there have been ups and downs. The business has struggled at times. Its credit rating has been downgraded, never a good thing for a household or a business or a country. And so we talked about navigating that as well. Fiona's been at the business for quite some time. She was Chief Operating Officer before she became Chief Executive as she is now. So we talked about that as well. There's so much to get into.

Fliss Hannah: And I think the bit that really stood out to me, maybe as a parent, was just how important Halloween is for this industry. You kind of think of the summer months, but no, this was a big deal, isn't it?

Shaun Farrington: Yes, that's fascinating. So, one, the growth of Halloween, seeing it down that perspective. But also, I was intrigued by then the comparison. What is it about spring and summer that isn't smashing it the way it used to? And so there were some interesting takes from there as well. Getting kids off screens was one of the things that they like to talk about a lot at Merlin, because obviously you're out and about. But there's a link, of course, when you're having Peppa Pig theme parks and Minecraft theme parks, very closely linked to the screen in the first place. So, a real interesting business to hear how Fiona Eastwood has been navigating recent challenges, where it goes next, and what all of us customers are doing, particularly when we want to take our kids somewhere over a holiday period, and maybe without the kids, not in the holiday period.

Fliss Hannah: Oh, now that sounds tempting. Let's hear what she had to say.

(Interview begins)

Shaun Farrington: Fiona, welcome to our Big Boss interview.

Fiona Eastwood: Thank you. Great to be here.

Shaun Farrington: Now, the first question you ask anybody who's had theme parks on their mind over the course of a year is, how's the summer been for you guys at Merlin?

Fiona Eastwood: Yeah, so we are a global business and highly diverse. So we have, we're the global leader in branded entertainment destinations. What that means is we have theme parks, we've got resort theme parks, we've got Legoland Park resorts, and we also have indoor attractions. So what that means is we're not, we can hedge in terms of weather because we've got indoor attractions such as London Eye, Madame Tussauds around the world, and we've also got outdoor parks. And so that means we're perfectly hedged for both weather and for geography, because we are in 20 countries, we've got 100 sites, and over 5,000 hotel rooms. So when you talk about the summer, we're actually only just going into summer in Australia, for example. So in terms of the UK, our summer was pretty good. The weather was fantastic, and that always helps to get people out and about in terms of our business.

Shaun Farrington: Does it help? Because it also gets people out and about doing lots of other things as well, doesn't it?

Fiona Eastwood: Yeah, no, it does help. It's much better if you're a... it can be too hot. I think the ideal temperature is about 27 degrees in terms of our business. However, yes, it does help enormously if there's great weather, everyone feels more positive. But yes, you're often then competing with the beach. However, our big competition in many ways is the home. All of our research shows increasingly parents feel quite stressed in the home and want to escape. And what we provide is that perfect antidote to that. So getting people off their phones, getting them off their gaming sets in their bedroom. So we're providing that escapism whatever the weather, be it a park or an indoor attraction. You know, we've got some of the much-loved biggest brands in the world in terms of our suite of attractions. We have the biggest toy brand in the world with Lego as a key partner. We also have Minecraft, the biggest gaming brand in the world, and Peppa Pig, the biggest preschool property.

Shaun Farrington: And we'll get on to a few of those sort of brands and how they're growing, how they're changing, which ones are, which ones aren't so much. I'm interested though, even if you've got that offer for those families that you talk about, they still need to part with some money. Have you noticed trends this summer in the UK about how people are spending, how much they're spending, where they're spending with you?

Fiona Eastwood: Yeah, I mean, you've got to look at our industry over several years. So for the last five years, we've had to adapt and be agile. We had COVID, opening and closing sites that were open all year round. We then had revenge spending in 2022, so people escaped the home and had cash and savings that were over the last few years. And then we hit inflation, which of course impacted energy costs, it impacted the cost of food, and also the cost of living. However, there is a growing experience economy. What is great is we recognise that people want to escape the home, come to an attraction, be together, because the moments to be together are increasingly precious. And what we provide that's quite distinct is what we call play. It's about creativity, it's about sparing imagination, be it the Lego, be it Pepper and Minecraft, that's all about families coming together to play.

Shaun Farrington: And you would have had that offer in 2024 as well. So I just wonder almost as a comparison, it's been a big year for everybody, businesses, households, big changes going on. Have you, did you see a change in how people were spending this summer compared to last summer?

Fiona Eastwood: Yeah, in many ways. I mean, we've had the last few years to get used to a changing consumer behaviour. And we see that in terms of the advanced research we do, and we see it as we look at our performance. It's been pretty positive. There certainly our accommodation in particular, so we've got amazing themed accommodation in our hotels. So you can stay in Chessington in a Christmas themed hotel room all year round for those that can't get together at Christmas. And what we've seen is the hotels have actually been very positive, and that reflects that growing short break market that we see in many, many markets. And indeed, we also see that we have to, as we always have. I mean, Merlin's been, its whole ethos has been around every family should have access to a day out and be together. So we've always priced and ensured we're affordable, be that our annual pass, the Merlin annual pass, which is an annual pass for visitors to come to our attractions.

Shaun Farrington: How much does that cost?

Fiona Eastwood: It varies. So there's different levels. We also, so we've got from bronze, premium, and it gives you different benefits. And so that can be anything from £80 for the year and above. We also have many partners that help us access families, so Sainsbury's Nectar through to Kellogg's. And this summer, to reflect the strain on public on people's finances, we ran a fantastic campaign which meant you had two theme parks for one, and what that meant was the ticket to a theme park in the summer was £18.

Shaun Farrington: So you you're clearly having to react to something that's going on here when you say people are finding their budgets tighter. So just almost, I guess the straight question is, you know, average spend per head coming to your places, how did that compare this summer to last summer?

Fiona Eastwood: We've actually seen growth in the average spend per head. We've also seen growth in terms of accommodation because of the premium experiences we offer, because people are looking, like I said, to escape the house and be together. So we've seen some fairly positive trends, particularly in food and beverage, particularly in our secondary spends. So, but it's a mix. You can't look at our audience as just one set of people. There's different types of people that we appeal to.

Shaun Farrington: For us to get a sense of how, you know, the economy is doing, it's actually, you know, those those bellwethers are are pretty handy, particularly when, you know, we had a budget a year ago that lots of people, particular business, those running businesses were were talking about. And and one of the messages that was coming out of that budget was that the changes, the tax rises that were announced were to try and limit the impact on households. And it was businesses that were shouldering a lot of the costs. It does sound like from what you're describing that, you know, there was a level of consumer confidence that has you've seen hold up throughout this year.

Fiona Eastwood: To some extent. I mean, a lot of it is the measures we've taken, the investments that we've made.

Shaun Farrington: You still need people to spend, though, don't you? It's you need them to think, I have this spare cash to go out and look at where I'm going to spend it. You might win that battle, but they need to have the money in the first place. It sounds like they have had from your perspective.

Fiona Eastwood: Yeah, I mean, we've seen some really strong... if I look at the current month, Halloween, and it all it's we're a very seasonally led business. So you have spring break, Easter, you have summer, and Halloween. Halloween that we're in now, we're seeing some really strong performance and that's in view of the amazing product we have. If you take Thorpe Park, increasingly Halloween is almost half of its annual profits, and that is because we have special rides in the dark, that you also have mazes, there's that whole thrill that we're tapping into. So I think if you have an amazing product and an amazing experience, people will pay. I'm not suggesting the cost of doing business is easy right now, but at the same time, if you invest in the right things, do the right marketing, and we we appeal to 60 million people a year. So we've got a really strong customer base to build on.

Shaun Farrington: I want to ask you about that Halloween trend in a moment. I just wonder whether, you know, part of it, when you you see that, you know, it's not like Halloween is a new thing particularly, but maybe something you're offering is new and so therefore it, you know, attracts people in a different way than it did before. But does it mean that there has been a bit of a struggle in that spring-summer offering to keep the levels of growth that you would have seen and people coming at those levels? That means that whatever you've got right Halloween time, you've not been able to maintain that momentum at other times of year. The sort of, you know, maybe tiredness sometimes you see a word used not about the concept of the theme park and these activities that people might go to.

Fiona Eastwood: Yeah, that's not something we see in our research. We we invested 350 million last year in our experiences and parks and a number one priority for us is to elevate the park experience. We put a lot of effort into our front-line teams as well as those investments. So in terms of trends, last, as I mentioned, the last few years we've had COVID, we've had inflation, and last year we actually had a pretty good year. Volume grew, so that showed there's demand for our experiences, demand in experience economy. And we also had a good revenue position alongside profits too. So last year was good. And this year, I'm six months into the role. I've spent the last few months almost, whilst I have in-depth and deep experience, I've been at Merlin for 10 years, I also came into the role, you have to as a CEO, looking at it from an outsider. So we've spent the last few months assessing the business whilst also flying the plane, but also looking at what we need to do to be more competitive, to ensure our we are driving growth. And so we've moved from one to one business, so economies of scale, we had 100 plus attractions operating slightly differently. So we're consolidating our approach, we're centralizing certain functions, and that's enabling us to then reinvest in those experiences and pull and drive demand into them as well.

Shaun Farrington: When you say last year was a a good year, you saw that as being a good year for yourselves. I mean, we've seen things like the the creditworthiness of Merlin, the way sort of ratings agencies might look at the you know, the the debt that the business has as a whole and the the ability to pay, the confidence they will have in the timeliness of a company or a country to pay that back. We've seen that be downgraded. You know, there was there was a big net loss last year. There's been some big financial decisions that have been made. Others wouldn't see it as a as a good, healthy financial picture for Merlin at the moment.

Fiona Eastwood: Yeah, I mean that that was widely reported. The and that was based on the forecasts of where we were earlier this year. We're actually coming out of this year stronger than we expected because of a lot of those investments. But in terms of last year, that was actually a strong performance. We saw volume improve, we also saw a good revenue and profitability, and we're seeing a lot of those investments now pay off. We also earlier in the year kicked off a transformation program, like I mentioned, in terms of going from 100 attractions to one company. That's doing procurement differently. It also is looking at where we had duplication, we had three divisions, we're now one company, global and regionally led, and that's allowed us to remove be greater efficiencies, productivity and take cost out of the business. So we're not resting on our laurels, nor no business would, but I've got a very strong growth platform that's shared recently and built with the leadership team that we're really excited about in terms of future growth.

Shaun Farrington: And so do you expect this, you know, the the winter, the bookings that will be maybe going into next spring, summer, how do you expect customers in the UK to be behaving now? Do you expect them to be spending more with you than they were the year before?

Fiona Eastwood: As I said, we've had a strong year so far. The year's not over. Many of our UK attractions will be up until mid-November and then reopen again for Christmas. In terms of next year...

Shaun Farrington: So that Christmas spend, I guess, you know, what what's your feeling at the minute about how people are shaping up for this Christmas compared to last Christmas?

Fiona Eastwood: Yeah, I mean, if you look at year-on-year trends, at the moment, and people do book later, but we are the accommodation is a strong bellwether for that trend, and we're seeing strong accommodation themed rooms, and that's because those are very special short breaks for a family to take. They're looking pretty healthy, but I can't share too much given the way we're funded in terms of that outlook. But in terms of next year, we have a really fantastic series of investments coming up. So we have the world-first Bluey ride at Alton Towers as part of CBeebies Land, which I believe will be amazing and will be fantastic for us. We also have the first Paw Patrol land coming into Chessington. So really tapping into that broad family audience that will be coming into our parks next year.

Shaun Farrington: I mean, they they are buzz words, aren't they? And I I'm intrigued as to how you end up, you know, which ones you choose or if that is even the right word. And I I'll get on to that in a moment. Just on, I wonder with the Christmas stuff, I know you can't talk too much about sort of forecasting and whatever as you've said because of your ownership structure. But we do have a budget that hasn't happened yet, but will happen not long just before Christmas. What are you thinking about what is what is potentially the the consequences of a end of November budget, the way we're teeing it up to be at the minute for your business, for the people who might spend money with you.

Fiona Eastwood: Yeah, so I'm not only CEO of Merlin, I'm also on the UK Hospitality board. And as an industry, we have had an impact from last year's budget, and we also saw at that point consumer confidence dip. The biggest concern with all of this is the amount of rumour and noise that's coming out, because the longer this is delayed, it does of course impact customers. They do start to hold back on spending. So the sooner we get to that point, I think it will be a positive. What we really want is a growth-led budget. You can't, just like in a business, you can't cut your way to growth. Higher taxation will also mean you can't grow if we're not careful. So our main, we have three main asks. The first one is VAT, and to be competitive with our European neighbours. We know when we look through all of our trends, that price is a key factor for both inbound and domestic people to holiday in this country and and also go to restaurants and pubs and enjoy leisure and hospitality at its best. And so what we want is to have a level playing field with our European neighbours, a VAT rate of 12.5%. We saw in COVID when VAT was reduced, we saw a bump and we saw demand and we saw people wanting to spend. And so we want to be competitive with our European neighbours, they're at 10%, so at least getting into 12.5%, we're in a better position.

Shaun Farrington: On something like that, that clearly does impact people's sort of desire to spend if the price is lower and it might give businesses more confidence if they think that's the environment they're in. How how would it work? You know, if you saw a reduction there, but you saw an increase in income tax. So, you know, all of your working customers who would see an an increase in the amount of taxes they're paying. Would that be a better way to do things overall if, as seems likely, the Chancellor does need to raise some money overall from somewhere?

Fiona Eastwood: Look, VAT is massively important. What we saw when the tourism tax, the tax-free shopping was introduced, we saw fewer people coming into the country. So tourism from another country is also important. So you know, you're mentioning tax rises versus the that would be domestic, but that international tourist is also impacted by VAT and the tourism tax. We've seen fewer visits coming into London, fewer stays in London, people are nipping to Paris to do their shopping. That means less hotel rooms, it means less flights, and it also means less employment. So by reducing VAT, that will drive growth both inbound and for domestics to spend in the UK.

Shaun Farrington: What's at risk for the hospitality industry, the entertainment industry with the budget? You know, if if Rachel Reeves doesn't get it right the way you see it, you know, you're you you'll already be hoping that all these bookings are going to be coming for that Christmas period. Is there something at risk for just even the weeks afterwards if it's not if the tone isn't as your customers and you need it to be?

Fiona Eastwood: Well, we've seen from the hospitality, it's the third biggest employer in the UK, it's 93 billion pounds and employ 3.5 million people in the UK. We've seen from last year's budget and the changes to national insurance that there are now two pubs closing a week. And there's also been 80,000 job losses. So not only does it impact the customer, it also impacts businesses in terms of those increased costs.

Shaun Farrington: But I guess at the same time, people are hearing how, you know, how Merlin has been doing and there's needed to be lots of cost cutting there for for reasons that aren't really to do with a budget last year or a budget this year. There there are there are ways to make it work in hospitality and there are at the same time, there are business decisions that will need to be made that need that means cost cutting is required irrespective of what the Chancellor says.

Fiona Eastwood: To some extent. I mean, of course our business is impacted by customer confidence. You see it immediately if there is concern and we're one of the first to see it because of those um because the experience economy is a growth economy.

Shaun Farrington: Do you feel you are one of the first to see it? You know, do you almost a budget is announced on on a lunchtime, we all listen to that speech and within hours can you detect how people are feeling on the back of it?

Fiona Eastwood: To some extent. To some extent. I mean in terms of the November budget, a lot of our UK attractions are closed apart from the indoor ones. Yeah. So um but what you almost see at this point, it's similar in other markets. If there's a lot of chatter from press and governments, you you see it come through in consumer confidence, that's for sure.

 

[GooseOnTheLoose]

Part Two:

Shaun Farrington: Now, in in terms of what people can expect, you've you've mentioned a few of those the brand names. I mean to to many kids they're not brand names are they? They're just like a way of being. But whether it's you know Peppa Pig, Minecraft, you mentioned Bluey as well. There are there are others in there. What what is it um how do you go about deciding what is the next big brand that you want to engage in? Or is it others sort of telling you a little bit? Because Merlin is what is it, 50% or so owned by the owners of Lego, for example. So at least the last numbers I had, I don't know what the that's about right. So you know, which way is the influence there? Are you sitting there going, do you know what, we need to get into Bluey? Or actually is there a a sort of a bigger story going on here where the likes of Lego think, right, we want some toys on our shelves that are Peppa Pig Duplo and at the same time we want a theme park opening up. We'll have a word with you, say that's what we're after in a different market and you how how does it come to fruition?

Fiona Eastwood: It's very much led by us. It's our business, whilst they are investors. And obviously we work close with Lego and it's a fabulous brand, much loved, and it's great to see the Legoland parks bring to life on a big scale the Lego product. And what we do in terms of which brands, it's all about play, it's about imagination. It's more than just the metal, the rides are hugely important, of course, but there's also those small moments. So if you take the Lego brand, we've just launched a new park in Legoland Shanghai, and that uniquely has the sort of the biggest mini lands. And what's fabulous about that as well as having the amazing buildings in China recreated in Lego, there's also moments to build. So it's fabulous being at the launch for that and seeing children and parents building in one of the areas, the Great Wall of China, and then of course the kids jumping over it. So we look at data, we look at stats, and it's for us it's about partnering with the biggest, most loved properties that we know have huge fan bases. That's one of the big levers for our future growth strategy is that building that fan base. We've got 60 million people now, we want to get to 70, 80 million, and that will be driven by those brand partnerships such as Lego and Minecraft and others.

Shaun Farrington: And at any point do you end up sitting around a table where you've got Chief Executive of a huge, you know, toy manufacturer and Chief Executive of a big streaming platform and a publisher, you know, whatever that might be, where you're actually all talking at the same time? Because I you know, I I'm not necessarily sure I'd have asked these questions 10 years ago when I wasn't so familiar with these brands, but these days life changes and that's that's where you are. It can be quite overwhelming and you feel like everywhere you look, it's the same stuff popping up. How does that happen?

Fiona Eastwood: Look, these brands are, because they're much loved, there's then demand to have them in lots of different spaces. My background before was in building brand franchises. So I know that there's appetite there and products and experiences and other elements follow after that. I mean, this summer, we launched our first ever Lego festival, which was a collection of building, it was dance and it was also music. And that was fantastic. Not only does it mean you're providing something much deeper and a deeper relationship with your guests, but you're also giving them a different experience that only we can provide because it's based on that creativity and learning through play.

Shaun Farrington: I'm interested though with Minecraft. Do you feel, as somebody who's been around brands for so long, that there's been, is it a is it a changing of the guard a little bit where there's this the computer game now that is starting, that's that's been the essence of Minecraft that is starting to dominate in different ways. Because a lot of the others we talk about are, you know, they're they're from our TV screens originally.

Fiona Eastwood: Yeah, that's a good point. I mean, ultimately, if you take Lego, they also became a game as well. I remember with my son when he was little playing the Lego Harry Potter for example. So gaming's been around for a while, but you're you're right. Minecraft of course started in a game but now has a merchandising range and we will of course working with Minecraft bring to life the first big experiences as well in a few years.

Shaun Farrington: Does it mean a different type of customer, a different type of family perhaps? Do they spend in a different way if it's if it's Minecraft rather than Peppa Pig?

Fiona Eastwood: Don't think so, no, because what you what's unique about all of the brands we work with, and indeed Peppa, Lego, Minecraft, it's about a fan base. So they absolutely love those um those brands and they want to experience those brands with their family. They want to come to us to play on a bigger scale. And so it's exactly the same in terms of thinking about how you bring those worlds to life on a epic scale, make it immersive, make it feel like you're you're in the brand.

Shaun Farrington: And you want to build stuff clearly, whether it's on the the sites you have or or new sites. Are you able to get stuff built? Amidst all of the things that you have going on at Merlin, if you decide, right, we want to go ahead and get this done. Can you build something as smoothly as you would like to?

Fiona Eastwood: I think yes, we can build things. We proved, and we've got two new rides coming next year. And we had hotels last year at Warwick Castle and indeed at Legoland Windsor. So yes, we can. Can it be improved? Absolutely. And working with government and working with our partners, that's certainly one of the areas of opportunity is how we cut some of that red tape and make it faster and better.

Shaun Farrington: What what is the sort of biggest blocker? Because that'll be another one we're starting to get a little bit, aren't we, of of more planning changes, planning and planning reforms that are on the way and people wondering why hasn't any of this sort of kicked in and got going yet. What what for you is is there a blocker that you've you've got right now that you feel would just enable you to grow as a business much more quickly if it was removed specifically?

Fiona Eastwood: Not there's nothing specific. Like I say, we work really well with our partners, be it local councils, local government, and indeed the main government. And it's something that there's always ways to improve it. There isn't one thing I'd point to other than how can we move a bit faster.

Shaun Farrington: Can I ask you about Madame Tussauds? Is is that a difficult one at the moment for you to decide sort of what to do with it? The brand value sort of been reduced on that. We've heard of many of the brands that you've talked about where that brand value is growing and growing. But in every business, there are tougher sides. Is that one of them?

Fiona Eastwood: Look, Madame Tussauds is a fantastic brand. It's like a 150 years old and it still delivers incredibly well. And what we're, but all brands need to be revitalized, all brands need to be reviewed, who's the target market, how do we reach them, what's the right product.

Shaun Farrington: Is it worth less in you know, sort of do you guys value it less now than you would have done previously?

Fiona Eastwood: There was that part of the question earlier around the impairment, that was that's just an accounting piece. It's just around the the brand value on a balance sheet. But ultimately it's still a brand we're absolutely confident in, that we back and we can still see growth. It does need um some element of being rebooted and that's what we're working on at the moment with our brand teams and some exciting plans underway.

Shaun Farrington: Is that hard in in a modern age where you know, people maybe don't need to stand next to a statue of a celebrity to to have an image of them doing something with that celebrity?

Fiona Eastwood: No, you'd be surprised. I mean, not far from here where I am in London is of course Madame Tussauds Baker Street. There are still queues around the block to get into Madame. It's still an iconic attraction and part of any visitor's visit to London. I mean, our attractions in London, one in four visitors to London come to one of our attractions. So they're still huge. And um the Madame Tussauds brand, you still see it's a selfie. So it still taps into that Instagram, that brag factor. And it's just if Madame Tussauds were alive today, what would she be doing, what would she be using? That's some of the questions that we're asking ourselves. There's also an element the Madame Tussauds brand in particular, because it tends to be an inbound tourist, has been impacted by some of the trends I mentioned earlier in terms of inbound visits to London, but also many cities around the world still haven't recovered from an international perspective from COVID. So there's still fewer inbound visits to these big cities than there were pre-COVID.

Shaun Farrington: And in this portfolio of all of these different brands you've got, when you mentioned Minecraft, I mean is that going to become one of your your own parks that you you you own and run? Is that the plan?

Fiona Eastwood: The plans at this stage are incredibly exciting. We're working very collaboratively, as we do with Lego, with the Minecraft team, and it's fantastic to see some of the ideas that are coming to life, both temporary and permanent and in different formats. At this stage, I can't share it or I will be killed by the comms team and ruin the launch messaging next year. But what I can say is it's going to be epic. It's going to be amazing.

Shaun Farrington: Right. So something in the offing there. Um in all of that as well, you mentioned China and the importance of the Chinese market to Merlin as well. How difficult is that at the minute? We're hearing every day about escalating tensions between the United States and China. So two big markets for you. We've seen headlines here in the UK about, you know, really big question marks over what our relationship with China should be. Does it how do you navigate that?

Fiona Eastwood: We've got we've been in China for over 25 years. So there's Madame Tussauds there, we have several brands and we just launched in the summer the first ever Legoland park in Shanghai, which was a partnership with government. And we've had fantastic support from government and indeed what we're seeing in terms of the performance, it's absolutely meeting if not slightly exceeding our expectations. It's a wonderful park. Um that has both globally recognized elements and local touches in terms of feeling very uniquely Chinese as well. And so we're seeing very positive trends coming out of China in terms of a Legoland park.

Shaun Farrington: So you don't necessarily, do you feel leaned on at all by whether it's shareholders, even you know, sort of United States American stakeholders. We've seen it in other industries that you know, if you if you want to play ball with America then you're maybe going to have to take your eye off or take your foot off the gas with China a little bit.

Fiona Eastwood: As I've said, we've been in China for 25 years. We know it, we're experts in that market and we continue to invest both with partners and ourselves in China. So it's very much part of our future.

Shaun Farrington: Just to wrap up, Fiona, can I just ask you about your journey at Merlin really? Because um not only have you have you gone from being sort of chief operating officer to chief executive as as you are now, but it's a decade now pretty much, almost, yeah, we're nearly there, a decade that you've been at the business. And and when you joined, people may well remember this story from the time. You joined not long after there was the horrific crash at Alton Towers, 16 people injured and two girls had leg amputations at the time and it was a real difficult time for those involved in that accident and then the aftermath for the company to have to come back from that. And and you joined around that time. What's what's it been like the what's been the the sort of the purpose of your role at Merlin in that time? Do you remember almost what it was like then, what the your your job description was then when you joined compared to how you might be viewing things now?

Fiona Eastwood: Yeah, I joined soon after, but I was going through the interview process during that time. And what I saw in terms of Merlin's culture, its reaction, was a very human one. So the then CEO, Nick Varney, stood in front of the media, took immediate accountability and made sure that the families and those impacted were looked after. And then also health and safety, hugely important. It's the red thread throughout everything we do. It's our number one priority. We spend a lot of time on health and safety, both at a site, at a regional, at a global, and at a board level as well. So it's massively important in terms of our business.

Shaun Farrington: I mean, that's remarkable to be going through an interview process. You know, many people would be able to sort of empathize with, you know, the world changing, their life changing as they you're going through sort of personal big moments as well. Did it almost change what the job sort of was in those first few months, years for you when you have such a, you know, high profile but also, you know, really crucial aspect of what you're doing is reputation-wise to try and convince customers that it's safe?

Fiona Eastwood: My role when I came in was marketing director and global brand director for the Midway business as it was then called. So that was the indoor attractions, London Eye, Sea Life, Madame Tussauds, Dungeons brand. So that was my area of focus and that was a global role as well. So my task at that time was around what what do these brands stand for, how do we ensure consistency, how do we drive growth for those brands. But of course, the wider culture was absolutely focused on health and safety as you'd expect.

Shaun Farrington: And then going on to chief operating officer, what is the difference between that role, chief operating officer and chief executive? They're the terms that I use all the time to describe the likes of yourself, but actually, behind the scenes, day-to-day, what's changed for you in your job?

Fiona Eastwood: Yeah, so I was chief operating officer of two of the three divisions, so about 50% of the business. And um it's funny, I get asked that a lot in terms of how is it different, and it is incredibly different. No matter how many books you read, how many things you listen to, like Wake Up to Money and other programs, nothing can prepare you to suddenly being in that chair. Everything you say is analyzed, you're watched, every expression, but also the responsibility for the business. It's also incredibly exciting. I've been in the business for 10 years, huge passion for what we do day in, day out. Nothing beats going to a theme park. That is my job. Um spending time with the teams, seeing kids having an amazing experience in our attractions. And at the but at the same time, you have to almost take an outside view when you take on a CEO role, particularly from internally, because you could have blind spots, you could have certain bias. So I very much when I came in, treated it as if I was coming in from the outside, assessing the business, having conversations, listening sessions, really to get under the skin, whilst also still running the business from an operational perspective, and then setting out the vision for the company, the future growth areas around becoming the most loved experience business in the world for for families to come together, really zeroing in on families. We've got six core growth levers alongside transforming the business in the last few months. We've got exciting opportunities in terms of transforming our business with AI, with digital, alongside our everyday investments into elevating the experience, thinking about what the guest wants, and also growing our people as well.

Shaun Farrington: Yeah, I was going to say, you can hear the, obviously obviously we can hear the pitch to customers and that's what people are trying to do, but the pitch to to staff as well about, you know, why you would work in a place. But at the same time, you know, running the divisions as you did and now you're chief executive with this restructuring going on. Has there been some really hard conversations you've had to have with people you've worked with for a long time who maybe aren't on the same journey or have had to lose their job because of the changes?

Fiona Eastwood: Yeah, I mean any CEO coming in, you look at the culture, you look at the top table, you look at the leadership, and you make some changes. And that's quite normal. I mean, indeed, when you read a book about a CEO, it's often the biggest regret is not moving fast enough on some of those changes. So I have made changes for the better, both in terms of our cost base, in terms of our talent, and also setting out that future vision because people will follow someone if they can see themselves in it and they can be excited. Nobody certainly gets out of bed every day thinking about um the OPEX. It's about where are we now, where do we want to be, how do we get there, and where will we invest going forwards?

Shaun Farrington: And how do you get to the front of the queue for Nemesis Oblivion? Are they are they on your... have you have you done those? Are you happy to do those?

Fiona Eastwood: Yeah, well, I last summer I actually worked on Nemesis um on the front line to be alongside the frontliners and see what it was like. I'm not a big fan of uh Nemesis. My favorite's actually Wicker Man. I love Wicker Man. And at Alton Towers next week, I've to next, and I'm looking forward to doing that ride in the dark. Um but yeah, that's my favorite one. I'm not a massive fan when there's a little bit of height involved.

Shaun Farrington: That's okay. Fiona, thank you very much. Fiona Eastwood, Chief Executive of Merlin Entertainments. Thank you very much for your time.

Fiona Eastwood: Thank you.

Outro

Some TLDR takeaways:
As confirmed in the results report, from 2025, the three divisions (RTPs, LEGOLAND Parks, and Gateways) will no longer operate as separate entities. They are being consolidated into a single, unified company managed by four global regions. The stated aim is to achieve "greater efficiencies, productivity and take cost out of the business.". She also mentioned that "going from 100 attractions to one company" was the main driver behind the restructure.

Despite reports of a net loss, which she reminds us is an "accounting piece" related to brand value impairment on the balance sheet, Eastwood frames last year's performance as strong, with visitor volume growing. She states they are "coming out of this year stronger than we expected."

The focus is on becoming the "global leader in branded entertainment destinations." Growth will be driven by major IP partnerships (Lego, Peppa Pig, Minecraft, Bluey, Paw Patrol) to expand their fan base from 60 million to a target of 70-80 million visitors. The highlighted words are of particular interest, as it suggests their strategy is to be the world's number one operator for turning third-party IPs into physical attractions. This is slightly different to the models offered by Disney and Universal. Disney creates and owns its entire ecosystem. Universal (primarily now) licenses a few blockbuster IPs to build massive, immersive worlds. Merlin wishes to partner with a wide variety of brands to operate a diverse portfolio of attractions, of all sizes, all over the globe. They don't want to be the brand. Merlin want to be the company that every major brand trusts to run their attraction.

Nothing new with investments. No secret coasters or rides announced. Eastwood confirmed Merlin invested £350 million last year, with a "number one priority" to "elevate the park experience."

As a board member for UKHospitality, she is actively lobbying the government for a VAT reduction to 12.5% to remain competitive with European parks, arguing it drives growth for both domestic and inbound tourism.

Although I squirmed at how The Smiler crash was introduced, and started to wonder about the relevancy, I had to remind myself that this was an interview for the casual visitor, or casual listener, and not a thoosie. The Smiler incident was the most significant event in Merlin's recent history, resulting in life-changing injuries, a criminal prosecution, a £5 million fine, and a massive blow to the company's reputation and finances. Asking a CEO, particularly one who joined the company in the shadow of that event, how the business responded to its greatest crisis is a perfectly legitimate line of questioning. It's a fundamental test of their understanding of the company's culture, its past failings, and its subsequent evolution. Eastwood's answer, focusing on accountability and the primacy of health and safety, demonstrates how that single event continues to define Merlin's entire operational ethos today. It's shocking how The Smiler incident appears to define many conversations about Alton Towers, or Merlin, even 10 years on, especially when you consider how vanishingly rare it is for the fatal rapids incident at Drayton Manor Park and Zoo to be referenced in any mainstream conversation about that park. One incident seems to define an entire global corporation, the other is treated almost as a footnote.

It is an assuring interview to listen to, if very exciting. It would appear as though Merlin Entertainments is finally in the hands of a sensible leader, who actually cares about the company, its offering, has experience and added bonus actually knew what Merlin did before being hired... we have been here before though.

The company felt rather directionless during the O'Neil era. The Varney era was obsessed with catching the mouse and expanding at all costs. I'm hoping we now see a solidifying of position and a commitment to investing in the overall customer experience.

 

[sock]

The focus is on becoming the "global leader in branded entertainment destinations." Growth will be driven by major IP partnerships (Lego, Peppa Pig, Minecraft, Bluey, Paw Patrol) to expand their fan base from 60 million to a target of 70-80 million visitors. The highlighted words are of particular interest, as it suggests their strategy is to be the world's number one operator for turning third-party IPs into physical attractions. This is slightly different to the models offered by Disney and Universal. Disney creates and owns its entire ecosystem. Universal (primarily now) licenses a few blockbuster IPs to build massive, immersive worlds. Merlin wishes to partner with a wide variety of brands to operate a diverse portfolio of attractions, of all sizes, all over the globe. They don't want to be the brand. Merlin want to be the company that every major brand trusts to run their attraction.

Thanks for the summary. This sounds a lot like the six flags sort of model- where they have licensed rides but not a coherent theme.

 

[Bert2theSpark]

Part Two:

Some TLDR takeaways:
As confirmed in the results report, from 2025, the three divisions (RTPs, LEGOLAND Parks, and Gateways) will no longer operate as separate entities. They are being consolidated into a single, unified company managed by four global regions. The stated aim is to achieve "greater efficiencies, productivity and take cost out of the business.". She also mentioned that "going from 100 attractions to one company" was the main driver behind the restructure.

Despite reports of a net loss, which she reminds us is an "accounting piece" related to brand value impairment on the balance sheet, Eastwood frames last year's performance as strong, with visitor volume growing. She states they are "coming out of this year stronger than we expected."

The focus is on becoming the "global leader in branded entertainment destinations." Growth will be driven by major IP partnerships (Lego, Peppa Pig, Minecraft, Bluey, Paw Patrol) to expand their fan base from 60 million to a target of 70-80 million visitors. The highlighted words are of particular interest, as it suggests their strategy is to be the world's number one operator for turning third-party IPs into physical attractions. This is slightly different to the models offered by Disney and Universal. Disney creates and owns its entire ecosystem. Universal (primarily now) licenses a few blockbuster IPs to build massive, immersive worlds. Merlin wishes to partner with a wide variety of brands to operate a diverse portfolio of attractions, of all sizes, all over the globe. They don't want to be the brand. Merlin want to be the company that every major brand trusts to run their attraction.

Nothing new with investments. No secret coasters or rides announced. Eastwood confirmed Merlin invested £350 million last year, with a "number one priority" to "elevate the park experience."

As a board member for UKHospitality, she is actively lobbying the government for a VAT reduction to 12.5% to remain competitive with European parks, arguing it drives growth for both domestic and inbound tourism.

Although I squirmed at how The Smiler crash was introduced, and started to wonder about the relevancy, I had to remind myself that this was an interview for the casual visitor, or casual listener, and not a thoosie. The Smiler incident was the most significant event in Merlin's recent history, resulting in life-changing injuries, a criminal prosecution, a £5 million fine, and a massive blow to the company's reputation and finances. Asking a CEO, particularly one who joined the company in the shadow of that event, how the business responded to its greatest crisis is a perfectly legitimate line of questioning. It's a fundamental test of their understanding of the company's culture, its past failings, and its subsequent evolution. Eastwood's answer, focusing on accountability and the primacy of health and safety, demonstrates how that single event continues to define Merlin's entire operational ethos today. It's shocking how The Smiler incident appears to define many conversations about Alton Towers, or Merlin, even 10 years on, especially when you consider how vanishingly rare it is for the fatal rapids incident at Drayton Manor Park and Zoo to be referenced in any mainstream conversation about that park. One incident seems to define an entire global corporation, the other is treated almost as a footnote.

It is an assuring interview to listen to, if very exciting. It would appear as though Merlin Entertainments is finally in the hands of a sensible leader, who actually cares about the company, its offering, has experience and added bonus actually knew what Merlin did before being hired... we have been here before though.

The company felt rather directionless during the O'Neil era. The Varney era was obsessed with catching the mouse and expanding at all costs. I'm hoping we now see a solidifying of position and a commitment to investing in the overall customer experience.

This is an amazing summary of the podcast, and really puts the interview into perspective.

I disagree with the O’Neil era being directionless, even though he was an outsider and a relatively short tenure, his mantra was go big or go home. With Merlin going all-in on big IPs, this has clearly stuck with the company, and many IPs secured by Merlin like Minecraft, were under his leadership.

Even though there’s been a lot of negative headlines around Merlin’s UK portfolio (and there always has been, to be fair), I do want the theme parks to do well. As a fan, of course the profits are not the top of my mind but I think a really good point about the company being a key part of an experience economy fighting against the doom loop of social media and the grab for our attention.

Theme Parks are a medium for culture and should stand just as prominently alongside other works such as Films, TV and more recently Video Games. There really isn’t another medium that blends immersion with physical experiences.

Bringing the conversation back around to Alton Towers, you can imply the next big investment will probably be IP-based. Something with the headline attraction of a Secret Weapon, but with an area attached to a major IP. I don’t even need to mention which area of the park is ripe for such development. But it certainly has the potential to be successful as something like Hogsmeade back in 2010.

I honestly don’t mind an IP-based attraction, as long as it fits in with the wider ethos and general brand of the park. Paw Patrol and Minecraft has next to nothing in common with each other, other than some overlap in target demographics. However I’d say both brands very much fit in with the wider brand of Chessington quite easily. Which starkly stands in contrast to how Thorpe was about a decade ago with Saw, Derren Brown, I’m a Celebrity and Angry Birds added nothing meaningful to the wider brand of the park and little audience overlap between IPs.

 

[QTXAdsy]

After reading on all that and the IP direction they seem to be heading in, I'm conflicted on it.

As we know Merlin's recent IP track record with attractions has been, at best, a mixed bag and at worst laughable so I have doubts if they could pull this off then again I've always been original over IP theme anyway so I could be biased there.

Also regarding how Varney wanted to 'chase the mouse' I honestly feel this direction has been mostly the reason Merlin have found themselves in and would have been better off had they not gone down that direction so I can only hope they never do that again or else it'll burn them as they have already found out.

Now I feel a main problem with the UK Merlin parks of late has been a real lack of direction in which with Towers for example, other than trying to firefight all the issues with attractions like Hex or Skyride, what is the direction for the park? We don't even know what PH is or if it is still happening and not helped by a revolving door of upper management and staff which the parks lacks a continuity with an actual long term plan, which to me was the key as to way Tussauds in those early years of the park succeeded because they had an actual vision for the park.

As much as we can rat on about Merlin, at the very least in the early years of owning Towers right up to the Smiler incident they did seem to have something of an actual long term plan which never got fulfilled because of that incident and then Covid and since then seems leaderless IMO. We'll never know what Towers' original plans were had the incident never happened and a great what if...

Chessington with its IP direction does though seem to have an actual plan in place in preparation for Universal and perhaps Thorpe too to some extent though Towers doesn't seem to have anything of note of late which doesn't create a good view of the park admist falling guest ratings.

So yeah, long term planning seems to be a very British thing to avoid in favour of short-term planning which you can say the parks have all been victims of that but with Universal coming, Merlin need actual proper road maps to plan out what each park needs if they intend to stay up there but I'll remain skeptical until proving otherwise.

 

[John]

On the subject on the Smiler crash, whilst in the SRQ this evening I noticed a lot of groups in the main queue requesting NOT to go on the front row. It seems a lot of people haven't forgotten

 

[Tom]

Take nothing new from that interview. A CEO's job is to reassure and say everything is and will be fine.

The company has much less value on its books than a couple of years ago. In terms of footprint, it is also in regression, not growth.

 

[Funcone]

Listening to that interview it sounds like everything is awesome...

 

[rob666]

...but only at Legoland.

 

[MaxPower]

 

[BarryZola]

All these people at Merlin will probably be frantically applying for positions at Universal themselves knowing that their current company is a dumpster fire just waiting to finally be put out.

 

[Hid]

They will say something different to the public then they say on the inside we will see what happens over off season if more restructuring happens

 

[GooseOnTheLoose]

Take nothing new from that interview. A CEO's job is to reassure and say everything is and will be fine.

The company has much less value on its books than a couple of years ago. In terms of footprint, it is also in regression, not growth.

You're not wrong, of course. A CEO's job is fundamentally to reassure, that's the entire point of the exercise, and we should always take the rhetoric with a healthy pinch of salt.

I wouldn't say there's nothing new to take from it though. The public confirmation of the one company restructure and the explicit pivot in language, from a simple "attraction operator" to the "global leader in branded entertainment destinations", is a significant strategic shift. It clarifies their entire future model is acting as a high-end IP partner, rather than just running parks.

On the "less value on its books" point, you are technically correct. That is precisely what a non-cash impairment charge is, an accounting recognition that an asset's perceived future earning potential is lower than its value on the balance sheet. However, and this is the crucial distinction, that paper value has very little to do with the company's actual operational performance or its cash in the bank. It's an accountant's correction, not a signal of operational collapse. It's triggered by factors like their newer Legoland parks trading "below initial expectations", which simply means they'll take longer to pay off, not that they are actively losing cash day to day. Conflating this paper loss with an actual operational regression is the exact misinterpretation the accounting piece clarification was designed to prevent.

As for the footprint being in "regression", I'm afraid that's a very UK-centric view. Yes, they've trimmed the UK midway portfolio by closing Bear Grylls and selling the Discovery Centres, but that's portfolio consolidation, not regression. As the interview and report state, they are simultaneously investing £350 million in capital projects and have recently built the world's largest Legoland in Shanghai. Their overall visitor numbers are up. They are very much still in an aggressive growth phase, just not necessarily in the parts of the UK portfolio we tend to focus on here.

The new Legoland Shanghai Resort, which only recently opened in July 2025, is a prime example of a massive investment that has flown almost completely under the radar of the UK thoosie community. You won't see it dominating the vlogs of our usual content creators, largely because few, if any, have made the trip. Yet, early reports are glowing and praise its unique attractions like the Monkie Kid land and a water-town boat tour which integrates Chinese culture. It's quite the far cry from the narrative we're used to and a stark reminder that Merlin's flagship efforts are now firmly global, even if our community's focus remains squarely on Blighty.

Shanghai LEGOLAND China: Travel Tips & FAQs 2025

Imagine stepping into a colorful world where creativity meets adventure. LEGOLAND Shanghai Resort has transformed this dream into reality. As China's first

travelchinawith.me

LEGOLAND Shanghai 2025: Rides, Food, & Nearby Adventures — Genie Yip

Experience LEGOLAND Shanghai through a detailed review of rides, food, and nearby adventures in 2025. Discover tips and insights for a fun-filled visit!

www.genieyip.com

Legoland Shanghai: the creative vision behind the flagship new resort

As Legoland Shanghai opens to the public, we talk to Merlin Magic Making about what it took to bring the vision to life.

blooloop.com