Core Insights - The closure of the Madame Tussauds wax museum in Beijing marks the second closure in China this year, following the Chongqing location, indicating a broader trend of declining interest in traditional attractions [1][2][4] - Merlin Entertainment, the parent company, is shifting focus from high-cost wax museums to more profitable ventures like Legoland, as it faces significant financial losses [2][20][22] Financial Performance - Merlin Entertainment reported a pre-tax loss of £492 million (approximately ¥4.72 billion) for 2024, a 130% increase in losses compared to 2023 [20] - The company’s revenue decreased by 3.2% to £2.057 billion, with a noted decline in brand value for Madame Tussauds amounting to £163 million [20] Operational Challenges - The operational costs for the five Madame Tussauds locations in China exceed ¥630 million, with the Beijing location alone costing over ¥140 million [2][14] - High production costs for wax figures, approximately £150,000 (around ¥1.5 million) each, contribute to the financial strain, making it difficult to achieve economies of scale [5][14] Market Trends - The decline in visitor numbers is attributed to changing consumer preferences, particularly among younger audiences who find static wax figures less appealing compared to interactive experiences offered by emerging entertainment options like VR and AI [12][13][17] - The shift in consumer behavior reflects a broader trend where traditional attractions struggle to compete with more engaging and immersive entertainment experiences [22][24] Strategic Shifts - Merlin Entertainment is prioritizing investments in Legoland and other attractions that promise higher returns, indicating a strategic pivot away from the wax museum model [18][22] - The company is exploring new formats such as digital exhibitions and lighter asset models to sustain the Madame Tussauds brand, acknowledging the need for innovation in the face of declining interest [22][24]

Core Viewpoint - The China-Hong Kong Tourism and Leisure Index has shown a slight increase over the past month and three months, but has declined year-to-date, reflecting the overall performance of listed companies in the tourism and leisure sector in the mainland and Hong Kong markets [1]. Group 1: Index Performance - The China-Hong Kong Tourism and Leisure Index reported a value of 753.41 points [1]. - The index has increased by 0.58% over the past month and by 0.90% over the past three months [1]. - Year-to-date, the index has decreased by 1.48% [1]. Group 2: Index Composition and Adjustments - The index includes listed companies from the tourism services, scenic spot operations, tourism retail, and duty-free properties sectors [1]. - The index is based on a reference date of December 31, 2014, with a base point of 1000.0 [1]. - Sample adjustments occur biannually, specifically on the next trading day after the second Friday of June and December [1]. - Weight factors are generally fixed until the next scheduled adjustment, with temporary adjustments possible under special circumstances [1].