Merlin Entertainments is the world’s largest visitor attraction operator behind Disney, serving 66m+ visitors in 120+ attractions across 25 countries. Owner & operator of the world’s most recognizable leisure brands including Madame Tussauds, SEA LIFE, LEGOLAND and the London Eye, the company opens between 5-10 new attractions across the globe every year.
Growth into new markets is driven by two strategic objectives, LEGOLAND Park rollout and Midway expansion.
There are currently 8 LEGOLAND Parks globally, the newest addition being LEGOLAND Japan which opened in 2017. The company believes there is scope for 20 across LEGOLAND Park’s across the globe in the fullness of time. The 9th Park is scheduled for New York, due to open in 2020. There are study agreements in place in Korea & China as the business continues to investigate future development opportunities by harnessing the global awareness of the LEGO brand.
Merlin’s Midway Division, or indoor attractions, are the most numerous across the business. Focussed primarily on city centre or resort destinations, the company clusters businesses near to one another, aiming to sell more than one attraction to visitors during a stay. Cluster cities are favourable targets for expansion, as the business harnesses existing relationships and knowledge to introduce new attractions to the location. Little BIG City Berlin and LEGOLAND Discovery Centre Scheveningen, both opened in 2017, give two recent examples of growing Merlin Clusters.
LEGOLAND Discovery Centre Scheveningen, currently under construction
Merlin also pursues new markets for it’s existing Midway brands with Madame Tussauds Delhi, opened last year, being the latest foray into a new country. Indeed, as more markets develop the potential for these world-class brands to be introduced into other new territories increases. The company is continually monitoring these trends to identify the optimum time to enter.
India is the latest country to become home to Madame Tussauds
In addition to rolling-out existing Midway & LEGOLAND Park brands, Merlin has also been working hard to identify new brands to cater for the ever-changing needs of consumers. The introduction of Cbeebies Land at Alton Towers Resort helped the company identify an active parent & toddler market, keen to spend time at visitor attractions with their favourite characters. Shortly afterwards, Merlin partnered with Entertainment One, owners of Peppa Pig, to rollout Peppa themed visitor attractions in multiple territories across the globe. It is hoped that 5 Peppa Pig attractions could open by the end of 2019, in addition to Peppa attractions within Merlin’s existing Theme Park Division e.g. Heide Park Resort & Gardaland Resort which opened this year. Another new concept, the Bear Gyrlls Adventure opened recently in Birmingham is being planned for launch in the USA & China in the coming years. Another addition to Merlin’s array of leisure brands.
Merlin’s first Peppa Pig attractions opened in Germany & Italy in 2018
To prioritise investment in the attraction’s themselves, Merlin typically adopts the role of a tenant rather than purchaser of property. As a result, the company is competing for space within developments against retail, food & beverage and office concepts. Increasingly, the focus of landlord’s attentions revolves around what benefits, aside from rent & other financial conditions, a brand can bring their development or location.
The Bear Grylls Adventure with international ambitions
This change in priority has been driven primarily by 3 key factors. Firstly, concerns associated traditional ‘bricks & mortar’ developments in an increasingly digital society. It is well documented that the share of overall retail purchases made in typical ‘bricks & mortar’ stores is declining. The food & beverage market has been disrupted by delivery companies making it more convenient to have food delivered home, rather than visiting the restaurant itself. Increasing numbers of companies offer flexible working conditions, with technology making it easier than ever to work remotely (think of the rise in office-sharing spaces vs. conventional offices) and reduce overheads. Whilst it is true that high-footfall stores with a strong identity will continue to trade well, in many peripheral or highly competitive markets, landlord’s may think twice about their long-term options. The visitor attraction economy has demonstrated robust growth despite these underlying trends. Many landlord’s have chosen to limit their exposure, where possible, to more threatened sectors.
Secondly, the market for engaging locations or developments within urban areas is near saturation in many developed countries. Landlord’s need to create a unique sense of identity to have their locations ‘stand out from the crowd’ to become commercial successes. Introducing commonplace brands will give critical mass but won’t give consumers a strong reason to visit any one development over another.
Thirdly, it is increasingly common for planning or permitting processes to be interrupted by disapproving third-parties. Some landlord’s view pursuing higher rental yields, with controversial or unimaginative development plans, as potentially more costly than engaging tenants more likely to receive support locally and avoid costly delays or redesign processes.
Merlin appeals to landlords on all three fronts. A long-term approach to their investment opportunities, coupled with an established business model, provide strong foundations for successful tenancies. The company’s operational and marketing expertise, coupled with the brands themselves, make Merlin attractions inviting propositions for consumers. The brands are unique for their catchment area and attract visitors from up to a 2-hour drivetime, far greater than the pulling power many retail and F&B concepts enjoy. This benefits landlords looking to create memorable and commercially successful destinations.
Merlin is combining these benefits & the wider trends across the commercial property or shopping centre market, with its world-class brands. The aim is simple, to ‘Spread the Magic’ to more & more visitors each year.