Merlin Entertainments Faces Debts and Competition as Theme Park Giant Struggles to Stay Relevant

On a windswept September morning, crowds continue to queue along Marylebone Road for a glimpse of Madame Tussauds’ wax replicas, undeterred by London Underground strikes. Inside, the familiar faces of Harry Styles, Sadiq Khan, Meghan Markle, and Elizabeth II greet visitors, while the venue itself raises questions about its modern-day relevance. At nearly £30 a ticket, the waxwork museum is either a nostalgic journey or a pricey, crowded diversion, depending on one’s perspective.

For Merlin Entertainments, owner of Madame Tussauds, Legoland, Alton Towers, and Chessington World of Adventures, its famous London attraction represents just one of several million-pound business headaches. While the group reported record revenues in 2023 as tourism rebounded after the pandemic, a different picture emerged in 2024. Visitor numbers grew, yet revenue dropped 3.2 percent to £2 billion. Pre-tax losses ballooned to £492 million, up from £214 million in the previous year, due in part to a £384 million writedown on key brands—£163 million of which related to Madame Tussauds.

Industry analysts have questioned whether Madame Tussauds still holds the appeal it once did. The traditional thrill of seeing celebrity likenesses up close increasingly feels out of date in an era dominated by social media and instant celebrity access. Merlin also marked down the value of its relatively new Legoland parks in New York and Korea by £110 million and £35 million respectively, as both underperformed expectations.

Underlying these financial challenges is a debt pile nearing £3.9 billion, much of it accrued since Merlin’s 2019 privatisation and the pandemic. The cost of servicing this debt in 2024 nearly hit £380 million. S&P Global Ratings recently downgraded Merlin’s parent company and its senior notes, citing “persistent high cash burn” and an “unsustainable” capital structure. The company’s bonds suffered as a result, intensifying investor anxieties.

Ownership lies with a consortium including Blackstone, the Kristiansen family of Lego fame, and the Canada Pension Plan Investment Board. The group’s spending model hinges on new attractions to encourage repeat visitors. Recent investments include Hyperia, the UK’s tallest coaster at Thorpe Park, and revamped rides at Alton Towers and Legoland Windsor. In 2025, Merlin rolled out the world’s largest Legoland in Shanghai and a new Peppa Pig theme park in Texas. At Madame Tussauds, new celebrity waxworks, such as Bella Ramsey, have been added.

Despite public assurances of “healthy operating cash flow” and £573 million in pre-tax earnings, a succession of chief executives and restructurings has unsettled the business. Under new leadership from industry veteran Fiona Eastwood, Merlin has refocused on its biggest assets and sought to divest its Sea Life aquariums, though sale efforts faltered.

Rising costs have also hit hard following government tax changes affecting staff pay. At the same time, consumer behaviour has shifted. Many pay less on visits or forgo attractions altogether as cost of living pressures mount, prompting Merlin to offer deeper discounts to stimulate demand. Experienced visitors argue that the standard of operations has fallen, with frequent ride closures having a negative impact on return visits.

The market threatens to become even more competitive as Universal prepares to launch a major theme park in Bedfordshire, opening in 2031 and expected to draw millions. With the backing of global brands and franchises such as James Bond and Lord of the Rings, Universal may outshine Merlin’s offerings, challenging the company’s ability to inspire repeat custom.

In a bid to capture new audiences, an £85 million partnership with Minecraft seeks to introduce rides and attractions across the UK and US. Whether this proves enough to rejuvenate Merlin’s fortunes remains to be seen. The theme park sector increasingly depends on diversification, strong brand franchises, and memorable guest experiences—qualities that Merlin must deliver if it is to weather mounting financial challenges and maintain relevance in a shifting leisure market.