New visitors were scared off Alton Towers this summer after its Smiler rollercoaster crashed in June, dealing a heavy blow to theme park profits, the boss of owner Merlin Entertainments warned today.
June's terrifying crash on the Smiler rollercoaster left two victims - Leah Washington and Vicky Balch - needing an amputation. The blaze of adverse publicity hit Merlin just as the business as gearing up for the peak season, which was also hit by a wet August. Profits from Merlin’s theme park business, which also includes Thorpe Park, will now be at the “in the lower part” of the £40-50 million guidance given at the end of July. Revenues are down 11.4 per cent year on year.
Chief executive Nick Varney said: “There has been such extensive media coverage around the accident that has clearly put concerns about rollercoasters in the minds of predominantly people who would have been our first time visitors this year. What we are seeing is that people who have been to Alton Towers before are still coming in the park and are very confident in the park.” Typically over half of its visitors have been before.
Varney warned of inevitable job losses next year among Alton Towers’ 2000 staff, which along with digger manufacturer JCB is the biggest employer in Staffordshire. The park has around 250 full-time employees and 1750 short-term workers employed between Easter and October. These employees are likely to be cut back as Merlin braces itself for an uncertain 2016 and copes with headwinds from a stronger pound deterring overseas visitors.
"What is unknown and what is uncharted territory is how long it will take for people to get their heads around the fact that it was very one-off accidents and that theme parks are statistically safer than flying. That is why we don’t expect to see a bounce back in 2016," he added. The Smiler ride will not be rebranded will not be reopened until the Health and Safety Executive lifts its prohibition notice on the attraction.
Shares dropped 1 per cent or 5.45p to 377.25p. But across the group overall, trading has been in line with previous guidance as its Legoland parks attracted more visitors.
Richard Hunter, head of equities at stockbroker Hargreaves Lansdown, said: “The impact of the Alton Towers accident has inevitably besmirched what is otherwise a strong trading update. The aftermath of the Alton Towers tragedy is still being felt in terms of a reduction in visitor numbers, with the possibility that this may yet follow through to next season. In addition, the strength of sterling against the euro has been a headwind both for currency translation as well as restricting visitor numbers. However, Merlin is far from being a one trick pony.”
- More about:
- Alton Towers