Given that Merlin are reporting notably high growth in the RTP division, which appears to be driven by accommodation, I don’t think the trend of adding new hotels will be changing anytime soon, as it’s delivering desirable results as far as Merlin are concerned.
There is a distinction to be made between operating and capital expenditure, with the slide posted above referring to existing estate capex remaining at lower levels. This therefore concerns the amount of money Merlin are willing to put into new attractions, rather than being associated with the reduced operating budgets that the last few years have seen. That “cost-cutting” is covered by the more investor-friendly named ‘productivity agenda’, which was referred to elsewhere in the presentation (and has been a feature of Merlin’s strategy for the last couple of years now). If I understood what was said correctly, existing attractions across the group had been set a target of keeping any increase in operating costs year-on-year to less than 3%.
Despite making the cutbacks in the above areas, Merlin are still claiming to have seen positive movements in their guest satisfaction measures, so again there wouldn’t seem to be any immediate motivation to change strategy. I think Nick Varney did say that an area that wanted to improve was around value for money where they currently rank “poor or very poor” though.
For as long as Merlin can produce growth from the RTPs, I can’t imagine they’d give any serious thought to selling them off. In the UK especially, they are a key part of their portfolio and presence, with the Merlin Annual Pass deriving most of it’s value from them. I can’t say I know much about the leasing situation with a number of Merlin’s UK sites, but I imagine with these being decades long there would be some sort of provision in there for Merlin to exit, or transfer responsibility to a new operator if they so wished.