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WTF Merlin?

spicy said:
It is very strange what is going on.

It was only last March they reported "record revenues" and celebrated purchasing the Orlando eye:

Merlin Entertainments Delivers Record Revenues In 2023 As Transformational Strategy Takes Hold

Merlin Reports Strong Growth and Strategic Expansion, Reinforcing Position as Global Leader of Branded Entertainment Destinations
www.merlinentertainments.biz www.merlinentertainments.biz

Fast forward 11 months and it's all doom and gloom. Lots of redundancies, Sea Life centres up for sale, entertainment across the theme parks cancelled, Merlin Magic making closed down, chief exec resigned.. WTF indeed!
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It is very odd… surely 2024 can’t have been that bad for them financially to make them have to turn the tables so drastically?
 
Bentleya said:
It's the additional turnover taxes the government have implemented, it's just getting more and more expensive to employ people.
Anyone employing large numbers will be looking to cut their clothes appropriately to maintain a viable business.
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Are you referring to the increase in employers national insurance contributions from 13.8% to 15%?

No doubt this will have had some effect but has it had such a drastic affect where Merlin have had to make such drastic decisions?

Am I to blame Rachel from accounts for the cancellation of Oktoberfest at AT this year? 😂
 
Not just NI, but this is a conversation for sitting in comfy chairs and sipping whisky.

The NI increase alone will cost Merlin as a group in the UK between £6,000,000.00 to £8,000,000.00.

This is based on 8,000 employees.

The threshold limit dropping to £5,000.00 from £9,100.00 will cost Merlin £600.00 per employee then 1.2% extra on average UK salary is anywhere from £180.00 - £240.00 on top of this.
 
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I'd be interested in seeing the overall cost / the increase in costs of servicing debt within the group as for example; in 2007 Alton Towers, Thorpe Park & Warwick Castle were sold to and all owned by Prestbury Investment Holdings Limited.

Merlin rent these back under a under a 35-year lease deal (to 2042).
There would be ties to inflationary rent increases built in to the contracts and at a time were running costs outstrip increases in ticket prices it won't take long to figure out to cut employment costs, assent strip and restructure the business and potentially sell off certain parts.

Edit:-

Prestbury Investment Holding has since merged with LXi REIT and subsequently to LondonMetric Property were longer lease deals have since been agreed.

Theme Parks

www.lxireit.com www.lxireit.com

Alton Towers rent incease - Annual Consumer Price Index +0.5%
Thopre Park rent incease - Annual Consumer Price Index +0.5%
 
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Bentleya said:
Not just NI, but this is a conversation for sitting in comfy chairs and sipping whisky.

The NI increase alone will cost Merlin as a group in the UK between £6,000,000.00 to £8,000,000.00.

This is based on 8,000 employees.

The threshold limit dropping to £5,000.00 from £9,100.00 will cost Merlin £600.00 per employee then 1.2% extra on average UK salary is anywhere form £180.00 - £240.00 on top of this.
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The biggest factor for those of us who employ people in Hospitality and Tourism is that minimum wage for youngsters is rising by a record figure this year, and putting youngsters dangerously close to fully matured (and experienced) adults.

Minimum wage is rising by over 12% for 18 - 20 year olds. Given our suppliers will also face similar issues, and be increasing their prices on top too. This is going to mean massively increased prices or huge cutbacks in hospitality, who rely on this age group for casual labour. All in all, we're looking at an increase on food and beer of up to 20%. if we don't cut expenditure (and thus the level of service we provide.)

This is a really bad move by the government in my opinion. Youngsters are cheaper for multiple reasons, lack of experience, lack of training, they're generally less reliable as they have few responsibilities and they're also less flexible, with things like college, Uni etc. The lower wage meant that it was worth taking these risks with youngsters, keeping the youth unemployment figures down. Now we're looking at the difference in terms of costs between hiring an 18 year old, and an experienced adult, for a low skilled roll, and wondering if the risks are worth it. I think youth unemployment is going to rise significantly. But then maybe that's what they want, they won't have to include them in headline statistics if they're also in education!!!!

EDIT: Minimum wage was £5.90 for an 18 year old in hospitality and tourism in 2019.... This year that figure will be £10 per hour.... Anybody else been lucky enough to see a 69.5% pay rise over the last 5 or 6 years???? Madness. And people wonder why eating and drinking out is getting so expensive.
 
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@Nicky Borrill - I would complete agree with your statement. I didn’t want to get too far down the rabbit hole of wages as ultimately the huge increase in minimum wag also pushes wages up for the rest of the staff; as these have been down valued by such a huge increase.

Increases in wages also means pension contribution increases, more expensive nett costs and ultimately even high gross costs when you slap VAT on top.
 
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Bentleya said:
@Nicky Borrill - I would complete agree with your statement. I didn’t want to get too far down the rabbit hole of wages as ultimately the huge increase in minimum wag also pushes wages up for the rest of the staff; as these have been down valued by such a huge increase.

Increases in wages also means pension continuation, more expensive nett costs and ultimately even high gross costs when you slap VAT on top.
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No, and overall I agree with a rise in wages. It has been very much needed for a long time. But I just don't think it should be rising by the highest percentage, for the least experienced, least qualified with the least fiscal responsibilities.

Thankfully, because of how low minimum wage was, we always paid above minimum wage. That will have to change this year, and we'll be paying minimum wage, as it's a more than fair wage now. (£25,400 per annum for an adult, £20,800 for a kid, with no prior experience, skills or fiscal responsibilities.)
 
I'm not sure it was meant to be funny @Dar 🙈

This is a fairly serious issue, and the main reason all parks and anybody else in hospitality and tourism is going to struggle this year. The industry is built on employing young adults, regardless of how bad that may sound, it's a simple fact. And it's an arrangement that has worked both ways for a long long time, hospitality needs cheap labour to keep prices down, and youngsters, at Uni etc, need easy, casual work to make ends meet. Ultimately it's the public that will suffer and pay the difference, or companies will go bust and jobs will be lost. Parks, pubs, restaurants and other leisure facilities could disappear. 🤷‍♂️

If Merlin are struggling to balance the books, how do we think smaller parks, some of whom were already struggling, like BPB, will get by?
 
It's funny how young people are constantly ridiculed for not behaving themselves, or not putting in effort, or not acting like older adults, or any other perceived failing, and their reward is to be told they're worth less than someone else solely based on their age. There's lots of talk about young people needing a bit of pocket money for uni or whatever, but never about the people that don't have a familial safety net or have chosen to break out on their own only to be given far less money for the same work and told to like it or lump it.
It's a hell of a message to send, "come to work for us! We only want you because you're cheap, not because we see potential or want to develop you"

Instead of focusing on keeping the wages of the lowest paid as low as possible, we should be focusing on lowering the highest pay grades and bringing pay ratios down across the board.
 
Dar said:
It's funny how young people are constantly ridiculed for not behaving themselves, or not putting in effort, or not acting like older adults, or any other perceived failing, and their reward is to be told they're worth less than someone else solely based on their age. There's lots of talk about young people needing a bit of pocket money for uni or whatever, but never about the people that don't have a familial safety net or have chosen to break out on their own only to be given far less money for the same work and told to like it or lump it.
It's a hell of a message to send, "come to work for us! We only want you because you're cheap, not because we see potential or want to develop you"

Instead of focusing on keeping the wages of the lowest paid as low as possible, we should be focusing on lowering the highest pay grades and bringing pay ratios down across the board.
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The thing is what Nicky is also saying is the message now will be don’t come to work for us at all now as your are simply too expensive and I can hire someone with way more experience for almost the same wage.

So would the young people in question want the low paid job or no job at all?

Everyone has to start from somewhere and work their way up, the low wages aren’t forever. John Burton started work at Merlin working as a Mascot at a Sea Life centre and worked his way up..

Focusing on bringing the higher wages down across the board suddenly promotion opportunities from within aren’t so appealing anymore?

Great discussion though it’s very interesting and explains why Merlin are having to take the actions they are taking. Not good at all though as ultimately it’s all resulting in a lot of people losing their jobs.
 
Dar said:
It's funny how young people are constantly ridiculed for not behaving themselves, or not putting in effort, or not acting like older adults, or any other perceived failing, and their reward is to be told they're worth less than someone else solely based on their age. There's lots of talk about young people needing a bit of pocket money for uni or whatever, but never about the people that don't have a familial safety net or have chosen to break out on their own only to be given far less money for the same work and told to like it or lump it.
It's a hell of a message to send, "come to work for us! We only want you because you're cheap, not because we see potential or want to develop you"

Instead of focusing on keeping the wages of the lowest paid as low as possible, we should be focusing on lowering the highest pay grades and bringing pay ratios down across the board.
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That's fine, it's an argument I've seen many times.

But you try explaining that to John Smith who's been visiting the pub for 40 years, but now has to pay yet another 80p on every pint.

I agree with your point on bringing down higher earner's wages, and charging higher taxes to those who earn more is something I support. But that's not really what's happening. Adult minimum wage has risen by much less than 18-20s, they're not higher earners, and they are much more likely to have more fiscal responsibilities. That's kind of my whole point here. Those that 'need' the biggest rises are not the ones getting them. Those unskilled adults, who all mostly have responsibilities, but have to rely on minimum wage jobs, have seen a smaller increase in their pay than 18 - 20 year olds. If it was the other way around, and the lowest paid adults had seen a near 70% increase in 5 years, whilst the kids had been given a 60% rise, we wouldn't be having this conversation / debate. Hell, even an equal rise for all age categories would be better than what we have!

I do not agree with your other point on young workers. If you've left home, and you're trying to survive on your own, you shouldn't be applying for part time minimum wage jobs in the first place, you shouldn't be applying for casual pub work, or temporary / season theme park work. Certainly none of the youngsters I employ fall into that category, they all either live at home, or are at university. This job is very much a stop gap for them, not a long term career prospect. They do not want us to 'develop' them, they're hoping to be lawyers, engineers, doctors (or weirdly for us, mostly vets.) And that's fine, like I said, it works both ways.

On the odd occasion where we have had youngsters who are generally interested in working in this industry long term, they've been placed onto training courses or apprenticeships, and they're still with us now, as adults, earning much more than minimum wage in supervisory roles. They're not the type of worker we're talking about here, they're a tiny minority in this industry. The huge majority are casual workers, who have no intention of being in this industry, never mind this role, in 3 years time.

I'm obviously using my own personal experience and situation as an example here, but Merlin, and other parks, are in exactly the same position, so it's a good comparison.

Maybe that's the answer though, long term, for the industry as a whole. Maybe we stop offering jobs to 'casuals' and start looking for staff who want to work in the industry long term, who want to make a career out of it, and want to progress. Then we can invest in their future. If that was an industry wide switch in attitude though, I'm not sure where that'd leave students, and young workers looking to fill the gap, or youth unemployment in general, thus we come full circle in my original point.
 
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