UK theme parks from another point of view!

 
AstroDan

Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 9:03 pm

Can I just comment that it's great to see some really mature and quality discussion in this thread now.

:D
 
djtruefitt

Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 9:52 pm

When the skyride is closed they are just advertising it on the queue times boards with the generic "A million apologies, the skyride is currently unavailable". And at the skyride station they just have the skyride is closed signs and nothing else.
 
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Nightfall
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Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 9:56 pm

Ok I’ve just read through this topic and there’s one thing that is confusing me:

If Merlin is floated on the stock market what does that actually mean? Most people seem to be suggesting that a new company will take over from Merlin. However I always assumed that Merlin would still be operating the parks but it would be the people who own Merlin that will change. So effectively the parks would remain exactly how they are now but instead of the main investors being the Blackstone Group Merlin would be answering to another investor in the same way The Tussauds Group was sold from Pearson’s to DIC and then to Blackstone who merged them with Merlin.

Correct me if I’m wrong but that’s always what I thought Merlin being floated on the stock market meant and that the actual ownership of the parks wouldn’t change.
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AstroDan

Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 9:56 pm

djtruefitt wrote:
When the skyride is closed they are just advertising it on the queue times boards with the generic "A million apologies, the skyride is currently unavailable". And at the skyride station they just have the skyride is closed signs and nothing else.


A million apologies isn't really very appropriate... as it's an enforced closure. If they were genuinely "sorry" it wouldn't be closed :P

They should put:

"The Skyride is not operating today"

:)
 
Dormiens-Dave

Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 10:01 pm

My limited knowledge

If Merlin floats the current investors will sacrifice a level of "ownership" for an influx of money, they then have to split the profits with these shareholders (called dividend). In this instance the existing investors will likely maintain a majority of the shares to keep control (you have to own a certain number of shares to have a significant say in the company).

Blackstone may sell their whole share in the company as that's what they do
 
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LordOfDarkness
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Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 10:03 pm

Updated Website:


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Also, the majority shareholder will effectively own Merlin.


Other shareholders will receive profits from their yearly income etc.
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Squiggles
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Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 10:18 pm

AstroDan wrote:
djtruefitt wrote:
When the skyride is closed they are just advertising it on the queue times boards with the generic "A million apologies, the skyride is currently unavailable". And at the skyride station they just have the skyride is closed signs and nothing else.


A million apologies isn't really very appropriate... as it's an enforced closure. If they were genuinely "sorry" it wouldn't be closed :P

They should put:

"The Skyride is not operating today"

:)


I'm not quite sure that quite captures the level of contempt thy have for their paying customers. At least the "a million apologies" manages to capture the insincerity.
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Re: Off Peak Closure of SkyRide and Other Cuts

Fri May 18, 2012 10:25 pm

AstroDan wrote:
djtruefitt wrote:
When the skyride is closed they are just advertising it on the queue times boards with the generic "A million apologies, the skyride is currently unavailable". And at the skyride station they just have the skyride is closed signs and nothing else.


A million apologies isn't really very appropriate... as it's an enforced closure. If they were genuinely "sorry" it wouldn't be closed :P

They should put:

"The Skyride is not operating today"

:)


Have Merlin even given them the budget to afford a million apologies? :P

I do find it a bit irritating that they don't specify the dates on the site though. They could at least allocate set days/dates for it to be closed.
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DanB
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Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 1:00 am

Dormiens-Dave wrote:
My limited knowledge

If Merlin floats the current investors will sacrifice a level of "ownership" for an influx of money, they then have to split the profits with these shareholders (called dividend). In this instance the existing investors will likely maintain a majority of the shares to keep control (you have to own a certain number of shares to have a significant say in the company).

Blackstone may sell their whole share in the company as that's what they do


I just wanted to clarify that they don't have to pay a dividend out of their profits, they could chose to hold on to the money and/or reinvest it back into the operation to then increase the share price. The good news is that when they float they will have to provide a lot more information about the business and expect it to be scrutinised by analysts If the parks are propping up the midway attractions they will be forced to either change it or sell off the midways.

Majority shareholders would demand their shareholding is represented on the board so top level management would change. It is difficult to say if a stock market flotation would be good as it depends what the new board would be like, if they understand happy customers = more profit then it should be good for us. If they are of the opinion that they should bleed every asset dry then we will see more cutbacks.
 
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Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 1:40 am

I think it will make it very difficult for people to get around the park with the skyride closed. I have always done a circular route around the park, starting in mutiny bay, through kk & gw to fv then got the skyride to df, then to ccl, x sector & adventure land. So having to walk through the gardens will use up a lot of time. As much as I like the gardens, it can be very tiring going up & down slopes, then having to stand up in queues for ages.

Hopefuly this is just a tempory measure for the 2012 season. Maybe they are just spending the time its not open imroving the ride system to make it more reliable.

Especialy after spending all that money on the new gondolas back in 2009, it wouldnt make sense not to use them very often.

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captain
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Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 2:33 am

DanB wrote:
If they are of the opinion that they should bleed every asset dry then we will see more cutbacks.

This is true, but I can't see it being likely. I think your hope about "if they understand happy customers = more profit" is the more likely outcome, or at least, I hope so too.

Surely it comes down to shareholders wanting maximum long-term profit? In which case, they must realise that the current strategy isn't working. They only have to walk into Thorpe to realise how dead things are, or Alton/Chessington to realise how much needs fixing. Or simply look at AT's Facebook page, which is covered in more complaints than perhaps any business I know.

In regards to Nightfall's question - again I shouldn't have referred to new owners, but new shareholders. Increasing shareholder value is quite different to maximising profit: maximising profit seems to be an altogether more short term vision (as Merlin are doing now), but maximising shareholder value tends to focus on creating maximum long term revenue and increasing the value of the business, which will increase share value and therefore shareholder benefit.

Wikipedia has a fairly interesting quote on its "Shareholder value" page:
Short term profit maximization does not necessarily increase shareholder value. Most notably, the competitive advantage period takes care of this: if a business sells sub-standard products to reduce cost and make a quick profit, it damages its reputation and therefore destroys competitive advantage in the future.


I would argue that we are seeing this now: Merlin's need for rapidly increasing profit margins is ultimately harming each business they own (and therefore their reputations) - this is clear from the lack of maintenance/operations spending and the forcing of cutbacks on the parks; and the reaction on forums such as this and the parks' Facebook pages is clear of the reputation problems that are growing. I think you could also argue that the competitive advantage of AT is being eroded by poor management and customer satisfaction, while Drayton and Blackpool are increasing their guest satisfaction simply by improving the park aesthetics, atmosphere and maintenance. Drayton seem to have shot themselves in the foot a bit by increasing the price too much whilst at the same time throwing a parking charge into the mix, but that's their own fault. Also, problems are perhaps less for Merlin around London where they have a near monopoly.

I think the moral of the story is - if (or when) Merlin float on the stock market, they will see significant investment/buying of shares by people who want to see the growth/profit margins maintained in the long term - many years - rather than just focussing on a seasonal basis.

With this regard, we can hope that the business strategy of Merlin parks will change. Even if things don't happen overnight, I think that shareholders would look at a park like Alton - the biggest and most successful theme park in the UK - and question why guest numbers have stagnated for the last few years, especially after allegedly the biggest investments in the park's history (although we could argue that in real terms the investment in the 80s was much more, and publicised investment figures for the last 5 years have been vastly exaggerated for marketing purposes). One would hope that with this in mind, management would have to consider reasons why visitor numbers weren't increasing, or why they aren't retaining the visitors they can initially attract with new rides etc./cheap deals.

The obvious conclusion, which I hope they come to, is that there is more to theme park success that just whacking in a £10 million ride every three years, marketing the crap out of it and hoping for the best. The theme park experience, if well executed, should see guests wanting to return in the same season even if nothing new has been added, because they have enjoyed their day with no problems, all rides open, everything looking its best, everything open when they want, entertainment when they want, and the bare minimum upselling because guests will much rather part with money when they feel they are not being forced/when they feel it is their choice. I genuinely feel the parks could make much more money if they didn't buy these hugely expensive attractions on a three year cycle, but instead spent three years making sure each guest was having the best experience possible and felt absolutely fine about parting with their money. If this were the case, they would retain the majority of the guests that had already visited, and any extra gained through marketing would increase guest numbers, revenue and therefore profits. The short term effects of this would likely be small, so Merlin understandably are probably very reluctant to try this out - after all they want those big annual report headlines of "a billion new visitors! a trillion more pounds! slightly more profit! slightly closer to world domination!". But after the float, it is very possible - even pretty likely - that new shareholders in the company would want to see their investment go very far indeed, and not spent on short term, expensive attractions which act as a stopgap against diminishing visitor numbers. Hopefully.

Hey - maybe I have this completely wrong.
 
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Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 7:33 am

Why is it that Merlin have decided to go for building major attractions every three years instead of every four? A new major attraction every four years was absolutely fine. It gave Tussauds time to work out everything before opening a new ride that didn't look finished or didn't satisfy guests by another aspect of the ride being weaker. It mean that they were spreading out the amount of money they were spending but it had the same affect. If Merlin did this too then there'd be spending their money over a longer period but also giving parks longer to develop ideas too. If it was a choice between Th13teen or SW7 every three years or a Nemesis, Oblivion or Air every four years then I'd rather it be the latter. It would then also give the parks time to add flat rides to areas (i.e. Dark Forest, X-Sector, etc...) and spend more on maintaining what they've got.
 
Poison Tom 96

Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 8:06 am

A big ride every 4 or even 5 years but having a better maintained park would mean it will have time to focus on theming and guest satisfaction. Also the costumer base will expand again as word of mouth gets out on how nice/immersive even MAGICAL the park is with proper, well thought out theming and very well maintained ride theming and rides means they should pull in the punters even more.
 
thefatone
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Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 11:30 am

BigAl wrote:
Why is it that Merlin have decided to go for building major attractions every three years instead of every four? A new major attraction every four years was absolutely fine.

Easily - it makes the parks marketable, it keeps guest volumes at a steadier level, easier to forecast income and debt repayments.

Sure, tussauds invested heavily once every 4yrs, but they had ridiculously huge sways of visitor numbers year-on-year, not good for the business as a whole.

As for shareholders, it depends entirely on who owns the majority and their attitude. The current economic climate is turning more shareholders into a having a long term view, as those companies with short term attitudes have been hitting the pan bigtime over the past few years. However, it depends how many shares they release onto the market - they completely control how many.. for example they may only release 5% of shares onto the stock market, meaning they literally just bring money into the business and have no influence otherwise.

There is a misbelief by a couple on this forum that they'll have huge impact on the business, or that they'll be split up - it won't happen through shares. Merlin will remain merlin, all the parks and products will remain under merlin to give best return on investment, shareholder value and company value. This really won't happen right now, as economic climate doesn't allow for huge takeovers through share aquisition anyway.

Plus, CVC got on board last year. They used CVC to replace the shares (and allow DIC to leave the business, which was the main intention of raising the shares in the first place), and they seem to have a long term view of the business. Again, economic climate doesn't best represent the business in share value, so they won't go public anytime soon. Maybe someone will just take Blackstones shares, or maybe they'll just hold onto them to keep their own business that little bit more secure.

I just believe the current cutbacks, and the previous planned, was due to economic climate, they know there'd be less visiting, they have been experiencing less visiting at majority of their attractions. This is just trying to keep profit margins and profitability relatively level. Hopefully we'll see budgets increase again as we see better visitor flows.
 
Crofty

Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 11:51 am

It's a shame that it has come to this. For me, the Sky Ride closure won't make a lot of difference as in the back of my mind it's been closed for years anyway, whenever I visit it's closed for some reason and on my last visit I rode it and realised I'd probably not been on it in years. I don't think the Skyride will cause that much of a problem for the GP if they have been subjected to on/off closures for the past few years anyway.

I think the park really should be looking at increasing the turnover drastically. Instead of closing things on quiet days they should be looking at making those quiet days into busier days. They have the product there so why not try and utilise it to it's full effect?
The Skyride aside, I would look at drastically cutting the ticket price just to get punters through the doors. If there is problems paying the debts (not sure if we have concluded this) then the key surely is getting money turned over in order to make the monthly repayments.

The park has to pay massive similar costs whether it's full to the brim or empty. Land rental, staff, insurance, debts and others. 

I'd opt for an off peak price straight away and do away with some/all of the bogoffs, People are wise to the gimmick now and know they are getting naff all free in reality.

:) :)
 
Crofty

Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 12:09 pm

I've found a way we can solve all of the Sky Rides problems.

Image

:D :D
 
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Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 12:55 pm

Crofty wrote:
I've found a way we can solve all of the Sky Rides problems.

Image

:D :D


New for 2014...World's longest theme park travelator :P
 
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Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 2:29 pm

I definitely agree with Crofty's point on getting people through the gates. The park has to pay (basically) the same amount in running costs no matter how many people are in the park, so they should be maximising the amount of visitors on days they know will be quiet - rather than the endless BOGOFs.

Even if they kept BOGOFs as well as an off peak price of say, £25 or £30, I am sure they'd rather have 2,000 customers paying £15 each than 1,000 paying £30 - as those paying less are more likely to spend more on food, gifts and so on due to a perceived sense of value in the entry fee.


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thefatone
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Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 5:43 pm

Thats what they have been doing though - they've been targetting offpeak quite heavily the past few years.

Thing is though, offpeak is offpeak for a reason. People are at schools or work. It seems that although it has increased the visitor numbers considerably (used to be completely dead offpeak, anyone remember those blissful days?), it's not been enough to prevent this sorts of things.
 
Jordan

Re: Off Peak Closure of SkyRide and Other Cuts

Sat May 19, 2012 5:45 pm

thefatone wrote:
Thats what they have been doing though - they've been targetting offpeak quite heavily the past few years.


What have they exactly been doing to target off-peak days? There's no different pricing or specific offers tied to small or medium days for the regular guest (not sure about group/schools) . The only thing which are tied to dates are The Sun tickets.

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