TBC: SW9 Speculation

[jon81uk]

Well aware of said improvements but too little too late in my opinion. Also the improvements to the promenade are on the beach side. Made a huge difference but the real issue is on the shop side of the road. It's awful these days. I don't even think it qualifies as tacky anymore. It's an absolute state.

They've not had the investment its needed. Not even close. The town is an absolute mess.

Retail and high street shopping has changed dramatically across the whole country, its not just Blackpool that has issues with empty shop units. I think the tourism side of things is pretty reasonable with the investment in place by the piers, pleasure beach, Merlin and other operators, its retail that isn't doing well across the whole country and that's harder for a council to invest in and control. Although some things did open such as the new Wetherspoons.
There is a big plan for new tourist attractions in Blackpool (https://www.blackpool.gov.uk/Your-C...pool/Blackpool-Central/Blackpool-Central.aspx) but there will probably still be too much retail and bar space that just isn't needed nowadays.

Anyway, this is completely off-topic and should be moved to the Blackpool Central thread -https://towersstreet.com/talk/threads/blackpool-central-redevelopment.4972/

 

[Matt N]

On an on-topic note; if SW9 is still going ahead as rumoured for 2022, then I'd imagine that we'll see a planning application go in within the next couple of months. That will tell us whether they've decided to press ahead with it or hold off until coronavirus blows over.

 

[Danny]

If a planning application isn't submitted later this year, it doesn't necessarily mean that coronavirus is THE cause and they're waiting for it to blow over.

 

[Skyscraper]

If a planning application isn't submitted later this year, it doesn't necessarily mean that coronavirus is THE cause and they're waiting for it to blow over.

Yeah... Another reason comes to mind.

Budget.

 

[Matt N]

If a planning application isn't submitted later this year, it doesn't necessarily mean that coronavirus is THE cause and they're waiting for it to blow over.

That's true, I suppose; Merlin might have other plans regardless of whether coronavirus throws their investment cycle up into the air or not. I could see Thorpe Park being lined up for a major year in 2022; it would be really nice to see a major new coaster built there, as their last one was The Swarm in 2012! All rumours do currently seem to point to SW9 being in the works for 2022, however.

 

[rob666]

Sorry Matt, your over-optimistic enthusiasm is on complete overload again.
This bloody virus wipes out more than half of company income for the year.
Imagine the losses on car parking alone over the school holidays!
Then the hotels, and the secondary spend.
We were probably heading into a recession before China "took a dose", and there was no real evidence the new woodie was a true financial success, because of the new, super budget cheap, season pass changing the income figures.
Merlin are heading to hell in a handcart.
2025, if we are lucky, maybe 2030 if we are not.

 

[Matt N]

Sorry Matt, your over-optimistic enthusiasm is on complete overload again.
This bloody virus wipes out more than half of company income for the year.
Imagine the losses on car parking alone over the school holidays!
Then the hotels, and the secondary spend.
We were probably heading into a recession before China "took a dose", and there was no real evidence the new woodie was a true financial success, because of the new, super budget cheap, season pass changing the income figures.
Merlin are heading to hell in a handcart.
2025, if we are lucky, maybe 2030 if we are not.

This is all true, but if the park has a sound insurance policy, then they could probably reclaim at least some of this lost money, as they shut on government advice (you could even say the government forced them to shut). For all we know, the government may well announce measures to help the tourism industry; they've announced a rather unprecedented raft of financial measures for other sectors, so it wouldn't surprise me if they did eventually announce a financial support package for tourism-based businesses of some form.

There's also the fact that most parks probably get loans to build major attractions like these, and I'd imagine that most banks would consider COVID-19 a temporary disruption to business. Therefore, I'd imagine that they'd know that under normal operating conditions, a park would be able to make the money required to pay off the loan. There may be issues if any sort of initial deposit is required, but even then, I'd imagine that most businesses have some form of emergency savings.

It might also be worth remembering that Alton Towers/Merlin almost went through a mini-recession of their own in the middle of the last decade; in the fallout of the Smiler crash, the parks (or Alton, at least) were absolutely dead. I went to Alton Towers 3 times in 2015, and it was dead as a doornail on all 3 occasions, even during the usually crowded summer holiday period. Between them, Alton Towers and Thorpe Park lost almost 1,000,000 guests, and turnover in Merlin's RTP division more than halved. Those parks can't have been making any sort of money, and Merlin were probably making astronomical losses, but they still managed to deliver Wicker Man in 2018. If the parks reopen in June, for example, and they get decent crowds for the rest of the year (which I think they could; people will want something fun to do after months of lockdown), there's a chance that they could still top 2015 (or at least, the latter half of it) in terms of attendance and profits.

I could definitely see a year or two's delay, a change in the plans, or both, but I don't think investment will stall completely. The effects of the coronavirus recession are not predicted to be long-lasting, with many financial analysts predicting that the economy will return to growth by next year, potentially even by Q4 of 2020 in some more optimistic predictions.

 

[AT86]

Alton Towers and Thorpe Park lost almost 1,000,000 guests, and turnover in Merlin's RTP division more than halved. Those parks can't have been making any sort of money, and Merlin were probably making astronomical losses,

Merlin as a whole made more profit in 2015 than they did in 2014, the Smiler incident had a big impact on Alton Towers (and perhaps a knock on at Thorpe Park) but their other operations around the world made up for this.

Covid-19 is shutting down pretty much all Merlin attractions simultaneously, the impact on their revenue will be far greater and could take much longer to recover from.

 

[Matt N]

Merlin as a whole made more profit in 2015 than they did in 2014, the Smiler incident had a big impact on Alton Towers (and perhaps a knock on at Thorpe Park) but their other operations around the world made up for this.

Covid-19 is shutting down pretty much all Merlin attractions simultaneously, the impact on their revenue will be far greater and could take much longer to recover from.

With regard to closure, I know it's going to be a big financial hit to the company, but if the attractions are closed, they must surely be making savings on running costs? And if the government's pledge to pay 80% of wages stretches to theme parks, then the amount that they pay staff might be reduced?

 

[AT86]

With regard to closure, I know it's going to be a big financial hit to the company, but if the attractions are closed, they must surely be making savings on running costs? And if the government's pledge to pay 80% of wages stretches to theme parks, then the amount that they pay staff might be reduced?

There will be reduced costs, but there will also be fixed costs that they will have to pay such as rent, insurance, leases, animal care for Sealife attractions and Chessington zoo, they will also need to continue paying off their debts (although the banks may allow some leeway with this).

Ultimately new investments (ie rides) are paid for out of profits. If the attractions aren’t open they can’t make a profit. So lower investment is pretty inevitable.

 

[Matt N]

Well, whatever happens, I think we will definitely get SW9 eventually. Whether eventually turns out to be 2022 or a few more years down the line remains to be seen.

Another thing I also forgot about; parks tend to plan major ride investments up to 5 years in advance. If the rumblings of this having been planned as early as late 2017 are true, then the park may already have finalised it, and the current crisis will affect investment in 2023-2024.

Also, won't the profits return in theory once the attractions reopen? Obviously other factors (e.g. the world financial situation) might have an impact, but won't profits flow in again once the attractions reopen, and in a couple of years' time, the parks would have forgotten about the lost profits from the first half of 2020?

 

[rob666]

Profits wont flow when the parks reopen because overheads and restart costs will wipe income out.
There was a major recession forecast due to issues in the East long before Coronavirus hit.
And Matt, economic forecasters in the West always predict a short, "v" shaped recession, because damage limitation is aways their goal in these situations.
The reality is usually different.
This isnt a half year issue, this will cause financial problems, and social hardship, for a decade.

 

[Jb85]

Profits wont flow when the parks reopen because overheads and restart costs will wipe income out.
There was a major recession forecast due to issues in the East long before Coronavirus hit.
And Matt, economic forecasters in the West always predict a short, "v" shaped recession, because damage limitation is aways their goal in these situations.
The reality is usually different.
This isnt a half year issue, this will cause financial problems, and social hardship, for a decade.

We’re still not really over the last financial crash. Couple this with an unknown Brexit still, you are correct it saying this could go on for 10’years


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[Matt N]

We’re still not really over the last financial crash. Couple this with an unknown Brexit still, you are correct it saying this could go on for 10’years


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I think the key question to ask ourselves in this context is; did the parks feel these long-lasting effects of the 2008 financial crash? The economy might have done, but nothing to me suggests that the parks felt the effects of the financial crisis long after it happened.

Another thing to bear in mind is that this economic crash has been caused by something completely different. This recession has been caused by the literal halt of most of the world's business, so surely once business resumes, we should be some way towards economic recovery? I'm not saying that the economy will literally return to normal as soon as businesses reopen, but if the recession was caused by businesses being closed, then surely opening the businesses again will go a huge way towards alleviating the problem, in theory?

With regards to the economic predictions; the article I read predicted a much shorter recession because the banks and the world's financial system are apparently in a far more stable position to deal with this type of recession than they were when the financial crisis happened, so they will be able to more effectively put mitigation strategies into place.

I won't pretend to be an economist by any means, but I'm just going off some of the things I've been reading online from economists with regards to coronavirus' economic impacts.

 

[WillPS]

I think the key question to ask ourselves in this context is; did the parks feel these long-lasting effects of the 2008 financial crash? The economy might have done, but nothing to me suggests that the parks felt the effects of the financial crisis long after it happened.

Another thing to bear in mind is that this economic crash has been caused by something completely different. This recession has been caused by the literal halt of most of the world's business, so surely once business resumes, we should be some way towards economic recovery? I'm not saying that the economy will literally return to normal as soon as businesses reopen, but if the recession was caused by businesses being closed, then surely opening the businesses again will go a huge way towards alleviating the problem, in theory?

With regards to the economic predictions; the article I read predicted a much shorter recession because the banks and the world's financial system are apparently in a far more stable position to deal with this type of recession than they were when the financial crisis happened, so they will be able to more effectively put mitigation strategies into place.

I won't pretend to be an economist by any means, but I'm just going off some of the things I've been reading online from economists with regards to coronavirus' economic impacts.

The 2008 financial crisis didn't kick off with anything which forced every theme park to shut for an extended period.

There's little point trying to draw parallels.

 

[Skyscraper]

 

[Matt N]

As much as everyone keeps saying about an Intamin Blitz Coaster in Rita's spot, I'm not really sure what they could do with the area; Rita does not take up an overly large plot of land as far as I'm aware, and some parts of it go over Thirteen's queue line, so I don't think there's a huge amount of space to work with, in reality.

So my idea is; if they removed Rita in favour of SW9, I think SW9 would work well as some form of compact water ride on Rita's area. Maybe a reduced size version of Mack's Power Splash model would fit? Admittedly, I'm not sure how a water ride could be integrated into the dark forest theme, but I'm sure that Merlin Magic Making would be able to concoct something.

Then, as the park would now have a new standout water ride as well as a new family attraction, my idea would be to remove the Rapids and put an Intamin Blitz Coaster there as SW10. The Rapids take up a huge plot of land compared to Rita, and I can imagine that a Taron-style coaster snaking its way along a similar path and interacting with the Runaway Mine Train would be nothing short of breathtaking!

I guess we'll have to wait and see what happens with regards to SW9. I could potentially see a scenario where it's delayed a year or two to give Merlin time to recoup the losses from the initial months of 2020, but I think there is still a possibility that it could open in 2022 dependant on how things go with regards to the economy and what finances are like come the end of 2020. Parks plan things 3-5 years in advance, so there's a chance that SW9 could already have had contracts signed.

 

[WillPS]

So my idea is; if they removed Rita in favour of SW9, I think SW9 would work well as some form of compact water ride on Rita's area. Maybe a reduced size version of Mack's Power Splash model would fit? Admittedly, I'm not sure how a water ride could be integrated into the dark forest theme, but I'm sure that Merlin Magic Making would be able to concoct something.

I'm not sure they'd bother, it's not like Rita fits in with Dark Forest at all anyway (and never fit in with Ug Land either). Arguably the same is true of Wickerman/The Flume and Mutiny Bay.

I guess we'll have to wait and see what happens with regards to SW9. I could potentially see a scenario where it's delayed a year or two to give Merlin time to recoup the losses from the initial months of 2020, but I think there is still a possibility that it could open in 2022 dependant on how things go with regards to the economy and what finances are like come the end of 2020. Parks plan things 3-5 years in advance, so there's a chance that SW9 could already have had contracts signed.

Contracts are not signed until things are paid for, and nothing is paid for that far in advance. Multiple concepts will be worked on, and a provisional mid term plan laid out, but very few of these are actually executed in exactly that form.

 

[Brad97]

As much as everyone keeps saying about an Intamin Blitz Coaster in Rita's spot, I'm not really sure what they could do with the area; Rita does not take up an overly large plot of land as far as I'm aware, and some parts of it go over Thirteen's queue line, so I don't think there's a huge amount of space to work with, in reality.

Dark Forest is actually quite a big area, it just feels small due to its layout. There's quite a bit of land to work with if Rita was removed, not to mention the cross valley woodie was originally planned for where Rita is now.

 

[DistortAMG]

as they shut on government advice (you could even say the government forced them to shut).

There is no beating around the bush. The government forced them to shut. End of. They may have voulentarily closed at first. But this was quickly followed by a forced closure. Alton Towers would not be allowed to open right now, on instruction from the government, for example.