Core Insights - Shanghai Lego Land officially opened on July 5, 2023, with an investment of $550 million, making it the largest Lego park globally, built with over 85 million Lego bricks [1][9] - The park is part of Merlin Entertainment's ambitions in China, but it faces challenges in reputation due to equipment failures during the trial operation phase [1][10] Visitor Impact - The opening of Shanghai Lego Land significantly boosted hotel bookings in the surrounding area, with a 3.5 times year-on-year increase in reservations in Jinshan District, where the park is located [3] - Searches for Shanghai Lego Land on travel platforms increased fivefold compared to May, and ticket bookings ranked among the top five attractions in Shanghai [3] - The local accommodation market is seeing a shift, with over 70% of hotel bookings coming from out-of-province travelers, compared to over 50% last year [3] Operational Challenges - The park's opening coincided with peak summer tourist season, raising concerns about its operational readiness due to previous equipment malfunctions, including a ride that trapped visitors for over 40 minutes [10][11] - The hotel associated with the park has faced criticism for its strict check-in and check-out policies, which differ from typical hotel practices [10] Future Considerations - Experts suggest that the park's management needs to enhance operational efficiency and safety measures to handle the expected influx of visitors during the summer [16][17] - The park's target demographic is families with children aged 2-12, which presents unique challenges in terms of transportation and accessibility, as many families rely on parental support for travel [16][17] - Merlin Entertainment's strategy in China will be tested by the performance of Shanghai Lego Land, which may influence the future openings of parks in Shenzhen and Sichuan [17]

Core Insights - Shanghai Lego Land officially launched its public trial operation on June 20, 2023, primarily targeting visitors who purchased limited annual passes or hotel packages in early May [1] - The park's ticket sales for the official opening on July 5 have not yet sold out, indicating a lukewarm market response compared to competitors like Shanghai Disneyland and Beijing Universal Studios [2] - The park's location is criticized for being too far from central Shanghai, with a travel time of over 80 minutes compared to Disneyland's 50 minutes, which may deter potential visitors [2] Ticket Sales and Market Response - As of June 21, 2023, tickets for the official opening on July 5 remain unsold, contrasting sharply with the rapid sell-out of tickets for other major theme parks [2] - The ticket pricing structure has been deemed high, with children's tickets starting at 255 yuan and adult tickets at 319 yuan, peaking at 599 yuan during peak times [9] Visitor Demographics and Experience - The primary demographic for the park consists of families with children aged 2-12, with adults showing less enthusiasm for the attractions [3][9] - Popular attractions include the Lego Big Roller Coaster, with reported wait times varying significantly, indicating a mixed experience for visitors [6][9] Transportation and Accessibility - The park's remote location poses challenges for accessibility, with limited nearby attractions to enhance the overall travel experience [2] - Visitors have expressed concerns about potential traffic congestion during peak seasons, which could further impact attendance [2] Hotel and Accommodation Concerns - The Lego Land hotel has faced criticism for high prices and strict compensation policies, with family rooms priced at 2400 yuan on weekdays and 3200 yuan on weekends [10] - The hotel’s check-in and check-out times have been compared unfavorably to other theme parks, although the management claims this aligns with global standards [13] Legal and Policy Issues - The hotel’s compensation policy for damages to Lego models has raised legal questions regarding the reasonableness of the compensation range set between 2500 to 15000 yuan [14]

Core Viewpoint - Shanghai LEGO Park is set to officially open on July 5, with a focus on managing visitor flow and enhancing the overall experience for families and tourists [1][5]. Group 1: Visitor Experience and Management - The park has conducted a three-week internal testing phase, receiving approximately 50,000 visitors, primarily families, with wait times for attractions ranging from 5 to 75 minutes [1][3]. - The park aims to limit daily visitor capacity to 28,000, especially during peak seasons, to ensure a better experience and reduce long wait times [1][5]. - Feedback from visitors during the internal testing has led to adjustments, such as reducing water volume in the 4D cinema based on older visitors' experiences [3]. Group 2: Ticketing and Pricing - Shanghai LEGO Park has implemented a flexible ticket refund policy, allowing free refunds up to three days before the visit, with a one-time date change option [4]. - The park employs a six-tier pricing system, with ticket prices ranging from 255 RMB to 599 RMB, and enforces a real-name ticketing system to prevent price speculation [4]. Group 3: Transportation and Accessibility - In addition to train station shuttles, a dedicated bus route from Shanghai People's Square to LEGO Park is planned to enhance accessibility [2]. - Partnerships with local transport companies, such as Spring Airlines and Jinjiang, will facilitate direct transportation options for visitors [2]. Group 4: Attractions and Features - The park features eight themed areas, over 75 interactive rides and attractions, more than 10 retail stores, and thousands of LEGO models made from over 85 million LEGO bricks [4]. - The design incorporates elements of Jiangnan and Shanghai culture, aiming to provide a unique and immersive experience for visitors [3].

Core Points - Shanghai LEGO Park officially opened for public trial operation on June 20, 2023, primarily welcoming visitors who purchased limited annual passes or hotel packages [1] - The park features eight major areas, including LEGO City and LEGO Friends, with over 75 interactive rides and attractions made from more than 85 million LEGO bricks [1][2] - Ticket prices start at 1,399 yuan for annual passes and 3,588 yuan for hotel packages, with daily tickets priced at 549 yuan for adults and 439 yuan for children [6][18] Group 1 - The LEGO Monkey King theme area is a global first, inspired by "Journey to the West," featuring attractions like the Flower Fruit Mountain Mystery Boat Ride [2] - The park aims to manage visitor flow, with a maximum capacity of 28,000 visitors per day, especially during peak seasons [6] - The park's total investment is expected to exceed 10 billion yuan, with a projected annual visitor count of 2.4 million [18][19] Group 2 - The park allows certain food items to be brought in, but restricts items that require heating or have strong odors [12][14] - Transportation options include a dedicated bus line and high-speed train access, with a travel time of approximately 18 minutes from Shanghai stations [11][8] - The park's ticket pricing strategy is based on extensive consumer research and market analysis, with a focus on providing a family-friendly experience for children aged 2 to 12 [18]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $286.9 million, a decrease of $10.5 million or 3.5% compared to the first quarter of 2024 [18] - Net loss for the first quarter was $16.1 million, compared to a net loss of $11.2 million in the first quarter of 2024 [21] - Adjusted EBITDA was $67.4 million, a decrease of $11.7 million compared to the first quarter of 2024 [21] - Attendance decreased by approximately 59,000 guests or 1.7% compared to the prior year quarter, primarily due to the timing of Easter and spring break [18][19] Business Line Data and Key Metrics Changes - In-park per capita spending increased by 1.1% during the first quarter, marking growth for 19 of the last 20 quarters [6] - Admission per capita decreased by 4.2%, influenced by the admissions product mix and lower realized pricing [19] - Total revenue per capita decreased by 1.8% [19] Market Data and Key Metrics Changes - April 2025 attendance was up 8.1% compared to April 2024, indicating a positive trend moving into the second quarter [7] - Year-to-date attendance through April showed approximately 1.3% growth on a fiscal basis [19] Company Strategy and Development Direction - The company is focused on significant investments in new rides, attractions, and events to enhance guest experience and drive revenue [8][15] - Discussions are ongoing regarding the integration of branded hotels into parks and unlocking the value of owned real estate [12][15] - The company is exploring sponsorship opportunities, expecting to exceed $20 million in high-margin revenue over time [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving new records in revenue and adjusted EBITDA for 2025, with 75% of historical attendance and revenue opportunity still ahead [8][17] - The company is optimistic about the impact of new attractions and events, as well as the potential increase in attendance due to competitive market dynamics [34][65] Other Important Information - The company repurchased 100,000 shares for approximately $4.6 million during the first quarter [16][22] - The balance sheet remains strong, with a net total leverage ratio of 3.1 times and approximately $764 million in total available liquidity [15][22] Q&A Session Summary Question: How does the company plan to bridge the first quarter loss to expected EBITDA records? - Management highlighted strong April performance with attendance up over 8% and ongoing strategies to improve admissions per capita [30][34] Question: What was the impact of Easter on April attendance? - Management noted that April's attendance benefited from the Easter shift, with additional attendance beyond that expected from the holiday [41] Question: How is the company performing in international sales? - International ticket sales are up low single digits, with management indicating that international attendance does not significantly impact overall performance [52] Question: What are the expectations regarding labor costs due to competition from Epic? - Management acknowledged planned labor increases but emphasized effective management of costs to maintain guest experience [81] Question: What is the company's approach to capital allocation and buybacks? - Management stated that they are comfortable with the current leverage ratio and are focused on maximizing returns to shareholders through strategic capital allocation [86]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $286.9 million, a decrease of $10.5 million or 3.5% compared to the first quarter of 2024, primarily due to decreases in admissions per capita and attendance [18][21] - Attendance decreased by approximately 59,000 guests or 1.7% year-over-year, with the Easter shift impacting attendance by approximately 140,000 guests [19][21] - Adjusted EBITDA was $67.4 million, a decrease of $11.7 million compared to the first quarter of 2024, influenced by revenue declines and timing-related expenses [21][22] Business Line Data and Key Metrics Changes - In-park per capita spending increased by 1.1%, marking growth for 19 of the last 20 quarters [6][21] - Admission per capita decreased by 4.2%, primarily due to a shift in peak visitation days and a change in the admissions product mix [19][21] - Operating expenses decreased by $3.6 million or 2.2%, attributed to a reduction in non-cash adjustments [20][21] Market Data and Key Metrics Changes - April 2025 attendance was up 8.1% compared to April 2024, indicating a positive trend despite the first quarter's challenges [7][18] - Year-to-date attendance through April showed approximately 1.3% growth on a fiscal basis [19] - International ticket sales were up low single digits year-over-year, with group bookings running ahead of the previous year [50][52] Company Strategy and Development Direction - The company is focused on significant investments in new rides, attractions, and events to enhance guest experiences and drive revenue [7][11] - Discussions are ongoing regarding the integration of branded hotels and unlocking the value of owned real estate [12][72] - The company is pursuing sponsorship opportunities, expecting to generate over $20 million in high-margin revenue over time [14][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving new records in revenue and adjusted EBITDA for 2025, with 75% of historical attendance and revenue opportunities still ahead [8][17] - The company is optimistic about the impact of new attractions and events, as well as the potential increase in visitation due to competitive market dynamics [34][65] - Management acknowledged economic uncertainties but emphasized the resilience of their business model [16][61] Other Important Information - The company repurchased 100,000 shares for approximately $4.6 million during the first quarter, indicating confidence in the stock's valuation [16][22] - The net total leverage ratio as of March 31, 2025, was 3.1 times, with total available liquidity of approximately $764 million [15][22] Q&A Session Summary Question: How does the company plan to bridge the first quarter loss to achieve record EBITDA? - Management highlighted strong April performance with attendance up over 8% and emphasized upcoming new rides and attractions as key drivers for growth [30][34] Question: What was the impact of Easter on April's performance? - Management noted that April's attendance benefited from the Easter shift and additional attendance beyond that, indicating a positive trend [41] Question: How is the company addressing international sales and group bookings? - Management reported low single-digit growth in international ticket sales and positive trends in group bookings, indicating a strong outlook [52][54] Question: What are the expectations regarding weather impacts for the year? - Management anticipates more normalized weather patterns compared to the previous year, which experienced significant hurricane impacts [61][62] Question: How is the company managing labor and marketing costs in light of competition? - Management indicated effective management of labor costs despite market pressures and strategic redeployment of marketing expenses to maximize impact [81][84]