Saturday 18 November 2017

Alton Towers theme park 'losing £500,000 daily' following rollercoaster crash

An air ambulance flies over the Smiler ride at Alton Towers in Alton REUTERS/Darren Staples
An air ambulance flies over the Smiler ride at Alton Towers in Alton REUTERS/Darren Staples

Roger Baird

The owner of Alton Towers is estimated to have racked up just under £1.5m in lost revenue over the three days since a rollercoaster crash left 16 people injured.

Analysts estimate every day the 500-acre theme park in Staffordshire remains closed costs parent group Merlin Entertainments a little under £500,000.

Alton Towers, which also has two hotels, is understood to have generated around £110m of revenues last year for the group.

Shares in Merlin have fallen just over 2.6pc since the accident happened on Tuesday, wiping around £100m off its stock market value.

Merlin is one of the biggest leisure and attraction groups in the world, and in the UK it owns Madame Tussauds, Legoland Parks, Thorpe Park, London Eye and Warwick Castle.

In total the business runs 100 attractions in 22 countries, including Japan, Dubai, Italy and Germany.

The group floated on the stock market in 2013 and has a market valuation of £4.5bn.

However, Panmure Gordon analyst Anna Barnfather said the incident has come at a crucial time for the theme park, at the start of its busy summer season.

She said June accounts for around 10pc of the theme park's annual revenues, while the key months of July and August make up a combined 35pc of sales across the year.

Ms Barnfather added: "The concern is that this accident will have a knock-on effect in terms of fewer people coming to the park at the height of the summer season."

Brokers add that the group's other UK attractions such as Legoland and Chessington may also see a drop off in visitor numbers.

But Ms Barnfather added: "The effect may be minimal. This is because parks like Chessington are more family-based and have fewer thrill-seeking rides than Alton Towers, which has a younger profile."

Analysts said another effect may be longer lead times and more testing before Merlin launches new rides such as The Smiler, which cost £18 and opened in May 2013.

The group, and The Smiler's German manufacturer Gerstlauer, could pay further costs in subsequent years if fines and penalties may be liable.

But Ms Barnfather said she believed that the theme park's reputation has not been damaged beyond repair.

She said: "Alton Towers will have a bad year this year, but the history of these sorts of incidents show that after a period of proper testing, visitors tend to come back 12 months later."

Press Association

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