INTERVIEW ABOUT MERLIN
Merlin Entertainments is the number one visitor attraction operator in Europe and number two in the world. Based in Poole, Dorset, UK, Merlin operates an international portfolio of global and local attractions, including Madame Tussauds, The Dungeons, Alton Towers Resort, Legoland, Sea Life, Gardaland and The EDF Energy London Eye. The company’s 78 attractions, six
The viewing platform at Blackpool Tower
hotels and two holiday villages in 17 different countries across four continents – Europe, North America, Australasia and Asia – annually receive approximately 44 million visitors, and employ 17,000 staff.
Legoland Florida received thousands of visitors in its opening weekend in October
For every market that might be looking a little mature, you see emerging markets and think, ‘wow, there’s a hell of a lot still to go for’
MAGIC FORMULA With revenue growing every year despite challenges within the industry (group rev- enue was up 4.1 per cent and EBITDA up 8.5 per cent in 2010 and the company’s on target for 2011), I wonder what the secret to Merlin’s success is. “Not to be compla- cent,” replies Varney. “Everybody knows it hasn’t been easy in recent times. We have got great brands in our portfolio and a very strong team who know exactly how to get the best out of those brands.” Merlin’s strategy is to use six growth
drivers, which are: investment in its exist- ing estate; rolling out midway attractions (Legoland Discovery Centre, Sea Life, Dungeons, Madame Tussauds and the Eye); turning its theme parks into short break destinations – with accommoda- tion and second gates; leveraging group advantage through the Merlin annual pass; opening new Legoland Parks; and also through acquisitions. “All these growth drivers reinforce each
other naturally and, combined with the strength of our brands, give us a very good advantage,” Varney explains. “But, right at its heart, we’re driven by the desire to give our customers a memorable experi- ence. We measure our performance in this area on a daily basis through our customer feedback systems. “Ultimately, you can spend lots of money and acquire lots of things, but unless you’re making the customer happy so that they come back for more, you won’t get anywhere. Merlin’s success and ongoing growth is entirely about making sure we
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deliver to our visitors.” Earlier this year the company stated that its strong develop- ment pipeline would leave Merlin with more than 80 attractions across four continents by the end of 2012. At the time of going to press, Merlin has 78 attractions with fi ve opening next year. Can Varney foresee a point in the future where the company stops expanding? “No. I can’t imagine that,” he replies
without hesitation. “We’ve got a very scaleable model and the market remains fragmented. For every market that might be looking a little mature, you see emerg- ing markets such as China, India and South America, and think, ‘wow, there’s a hell of a lot still to go for’. “Internally we’re looking to pick up the pace of our growth, not slow it down,” he continues. “What’s interesting about the Legoland projects is that we’re looking both for sites that can be funded off our own balance sheet, and partnerships – such as Malaysia, which opens in 2012
– that are predominantly funded by the government. In places like Korea you might even see a combination of the two.” Varney’s other successful ingredient to success is good old-fashioned honesty. “I pride myself and Merlin on being a very straight and fair person and organisa- tion,” he says. “What you see is what you get. Throughout my business career I’ve learned that you don’t need to be clever in negotiating and dealing with people, you just need to be straight and fair. If peo- ple see that and trust you, then business becomes much easier.”
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OWNERSHIP At the beginning of 2010 it looked as though Merlin might become a publicly quoted company. Instead, CVC Capital Partners joined Blackstone and KIRKBI as shareholders. Varney still has aspirations to see Merlin become a public company, but not just yet. “I don’t think anyone would want to fl oat a company on the stock mar- ket at the moment and we’ve plenty to be getting on with,” he says. Family and rugby are Varney’s other pas- sions. He has four children, who are big fans of Alton Towers and the Dungeons, and works as “a very informal non-execu- tive director of Bath Rugby Club”. With so much going on, it seems incred-
ible that one person can manage it all. “I don’t!” he laughs. “At Merlin it’s funda- mentally about the team. There’s no huge corporate head offi ce, just a relatively
AM 4 2011 ©cybertrek 2011
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