Merlin Entertainments operates several attractions in China, where it appeals to visitors with popular brands such as Legoland Discovery Center, SEA LIFE and Madame Tussauds. We spoke to its Regional GM for Midway China about attractions trends in the country.
Merlin Entertainment’s Midway operations in China includes six brands. These are Madame Tussauds, Legoland Discovery Center, SEA LIFE, Little BIG City, The Dungeons and Peppa Pig World of Play. It has 12 attractions in China, to date, located in cities such as Beijing, Shanghai, Shenyang, Chongqing and Wuhan. It is also opening a Legoland Resort in the country too.
Qi Zhang is Regional General Manager, Midway China for Merlin Entertainments. She gave blooloop some insights into COVID-19 recovery, trends and opportunities in the country.
Zhang joined the company in 2018. Previously, she worked at InterContinential Hotels Group as Head of Planning & Strategy for the Greater China region. She started her career in strategy and management consulting with Bain & Company, working in China, Europe and the US.
Zhang brings many years of experience in developing and implementing growth strategies and business improvement plans to her role with Merlin Entertainments in China.
Merlin Entertainments and COVID-19
Qi Zhang began by speaking about the impact of the coronavirus outbreak on the business in China:
“The pandemic in China started in January. And unfortunately, all sites closed, either before or during the Chinese new year period. So that was a major hit for us.”
“Some sites started to reopen in March or April, but recovery back then was very slow. Sometimes we only saw single digits of visitors in the early days. It was clear there was a lack of confidence in going out, particularly in terms of visiting an indoor attraction.”
Signs of recovery
“But now I think that the situation in China is, by and large, controlled with a few new cases every single day,” says Zhang. “Around 90% of those are actually imported cases. And at the same time, some of the things that the government did very early are also helping.
“So, for example, the government has been very harsh on layoffs, even during the peak of the crisis. Employment is absolutely priority number one. This could potentially help the economy quickly, getting to the recovery mode, and seeing how things ramp up.”
“This also gives people a lot of confidence in terms of spending, that they could go on with their more or less normal levels of consumption. In the past summer, people are gradually regaining their confidence and we clearly saw early signs of recovery in July and August.
“Individuals started to travel. The tour groups are yet to come back and maybe they won’t be back in exactly the same way as they used to be. With regards to international demand, this may take another six to 12 months to fully recover.”
The new normal for Merlin Entertainments in China
As attractions reopen around the world, both operators and visitors are having to adapt to a slightly different experience, with many extra health and safety procedures being put in place. With its operations in China, Merlin Entertainments had an opportunity to implement this ‘new normal’ early on.
We always put employee and guest safety as our first priority
“First of all, I think there’s clearly evolving customer needs,” says Zhang. “We believe, fundamentally, that their basic need is to feel safe. So, from Merlin’s perspective, we always put employee and guest safety as our first priority.
“During this period, we established detailed plans for this covering, for example, the PPE supplies and operational protocol as well as emergency plans. Our hygiene standards, from the locals perspective, were highly spoken of by local authorities. Plus, all these actions that we are taking are also well communicated to the public via various channels. All these add up to make customers feel comfortable visiting us.”
Attractions evolve in a post-pandemic world
The pandemic has caused many operational changes and also accelerated some new trends in the attractions industry. Zhang talks about how Merlin Entertainments is continuing to evolve in the light of COVID-19.
“There is something specifically related to the pandemic and there is also something we see as the balance between the long-established IP and new innovations. So, the thing that’s specifically relevant to this pandemic period is a new demand specifically for the family and kids segment.
“For example, during the lockdown, many daycare centres for preschool kids were gone. And basically, they have nowhere to go, when their parents have to work. Here, our Peppa Pig World of Play was nimble enough to introduce multi-entry tickets available at a very affordable price, to appeal to the young parents in the nearby neighbouring residential community.
“That turned out to be very successful. In fact, it was one of the main drivers in delivering the early-stage recoveries for Peppa Pig World of Play.
“At the same time, when schools were interrupted, we saw the increasing demand for education or experience-driven products. So Legoland Discovery Centers also introduced programmes like Little Playmaker.”
Changing with the times
“Then, speaking of the long-established IP, for example, our Madame Tussauds brand is very well known for famous fun, as well as its wax figure making heritage. But at the same time, nowadays celebrities are becoming more and more accessible to the general public.”
“This means that Madame Tussauds will be gradually losing its pitch if we don’t make any changes. So, at Madame Tussauds Shanghai recently, we had a crowdfunding marketing campaign, together with a celebrity. We offered unique celebrity content and exclusive secondary offers, as well as using hunger marketing to create FOMO – fear of missing out.
“With all these, we reached a crowdfunding target within an hour of sale, and then, more importantly, we managed to strengthen the bond between fans and celebrities as well as MT Shanghai, making things more relevant and meaningful.”
Merlin Entertainments in China
Merlin Entertainments offers 12 midway attractions around China, in different regions across the country. This means there are many regional differences to take into account.
“We have five attractions in Shanghai and three attractions in Beijing. Then we have two in Shenyang and one each in Chongqing and Wuhan,” says Zhang.
“For Beijing and Shanghai, they are obviously tier-one cities with relatively high purchasing power from the consumers perspective. However, the competition in those two markets is also more intense. Consumers in those two cities, they have more choices to choose from when they think about where to go.”
“Whereas, in the other three cities, they are tier two. We do see emergent demand from people who are looking for an IP-driven product and experience-driven products. But from a purchasing-power perspective, there are still gaps. And of course, from a competition perspective, there is also a difference.
“One of the key things about our agenda is how do we differentiate among ourselves. So for example, right now we have four Madame Tussauds in China. If one customer has visited Madame Tussauds in Shanghai, what is driving him or her to pay another visit to Madame Tussauds Beijing? That’s the thing that we are currently working on.
“In Shanghai, maybe there’s a label for the city as being modern, more trendy and more fashionable. Whereas for Beijing, the thing that we are trying to build for Madame Tussauds Beijing is more about classic, historical and cultural figures.”
“I do think there’s a huge untapped demand in China and Merlin Entertainments is working on this to see to what extent we can truly leverage or unlock the full potential,” says Zhang.
“So far, we only have attractions in five cities in China, and most of them are tier one and tier two cities. There is further demand that we have not tapped into, in tier two, or even tier three or tier four cities. There is also an increasing demand for major IP feature products, as well as the immersive interactive product that we are offering.”
“We are going to launch one of the biggest investment in midway attractions this year. At Changfeng Ocean World, previously we had two lovely beluga whales. Now, those two have been sent to the sanctuary in Iceland to be released into the natural environment.
“That is definitely a good move. But these two used to be the stars for Changfeng Ocean World. So as a next step, we are going to launch a new product at Changfeng Ocean World at the end of this year or early next year to maintain our appeal to the customers in the local market.
“The new product will be featuring a major IP partnership. It will also be promoting our BRP value proposition – breed, rescue and protect.
“We also have other plans to further upgrade our product at our Madame Tussauds brands. From an audience perspective, they would love to see more unique content there. They’d like it to be more immersive, to be somewhere they will be able to interact with the product on site. So we also have plans for that as well.”
The midway attractions in China are part of the overall midway division within Merlin Entertainments’ global operations. Zhang tells us how the teams work together, and how this has been useful when it comes to sharing information as the COVID-19 crisis unfolds.
“Throughout this period, we’ve shared our experiences with our global teams. And the central teams also supported us.”
“Speaking of the pandemic, China is actually a few months ahead of our global peers. So we shared what we saw and what we did here. Hopefully, this could be useful elsewhere, and help other Merlin attractions to get better prepared. For example, the relatively slow recovery for the tourist market and the need for the preschool kits. Plus, how we made the hygiene standards our first priority.
“These are useful lessons for Merlin attractions elsewhere.”
At the cutting edge
China is often at the cutting edge of attractions development. Zhang gave some insight into some emerging trends that she has seen recently while working with Merlin Entertainment’s midway brands in China.
“We do see an increasing demand in terms of digitalization. Also, a lot of attractions in China right now are using Face Recognition technology to enhance operational efficiency. You don’t need to redeem a ticket, you show your face at the entrance and get in immediately.”
We are delivering a more interactive, immersive experience, enabled and empowered by new technology
Over the last few years, there had also been a huge rise in virtual activities, from live streaming to gaming. Talking of bridging the gap between the virtual and the physical worlds of LBE, Zhang says:
“What we are trying to do right now is to strike the right balance between these two. I think the virtual world is definitely a trend. With the right tech, we can have a better opportunity in terms of delivering a better experience to the customers.
“But fundamentally, I think people still need something concrete, to embrace all the technology or the changes that the new technologies bring to us.
“Today, we are delivering a more interactive, immersive experience, enabled and empowered by new technology. So that when people come on-site to enjoy the location-based entertainment or leisure time, they can still feel the latest trends in terms of technology and they can truly enjoy it.”
A bright future for Merlin Entertainments in China
“Merlin Entertainments is a long-established, leading player in this particular industry,” says Zhang. “We have very good products, we have very good IP. And we will be taking full advantage of this, to take Merlin Entertainments to another level in China. Right now we have 12 attractions, maybe we could have 30 or even 50.
“Secondly I think there is potential for a number of new brands in China as well. Right now we have six brands here, but Merlin Entertainments does have many other brands, globally. So, I personally can see the potential market for some of those here as well.”
“We will be looking at how we leverage our historic and cutting edge experience in the location-based entertainment industry to benefit the overall China attractions business.
“We do national campaigns across our attractions and exclusive products for every single attraction. This is to enhance our appeal to the customers. We also use this to partner with and cooperate with different partners to fast track their recovery, to fast track the performance and so on.”
“Even though we have 12 attractions, we are one Merlin Entertainments business, so that’s the biggest advantage to us.”
The power of a strong team
“The last thing that I want to highlight is definitely the power of a team, especially from Merlin Entertainments’ perspective,” says Zhang in conclusion. “What we’ve experienced during this challenging period is very powerful and thought-provoking.”
We always put people first
“Our company’s reason for being is to provide incredible experiences to the customers. We always put people first. So, we do have a lot to live up to when it comes to how we treat our teams during this period. When we talk about our people, our first reaction is always to preserve, rather than cut. And I think this helped us a lot during the recovery. It will also be conducive to the long term development in the future.”