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London Eye turns record £25m profit as tourism takes off
Jonathan Prynn, Consumer Business Editor09.10.09
The London Eye has defied the global recession by turning a record profit of almost £25 million.
The 135-metre attraction – London's fourth highest structure — pulled in 3.85 million “passengers” last year, only just short of its best figure.
Finances have been boosted by a surge in European visitors since the collapse of sterling last autumn, the trend towards “staycations” and visitors dipping deeper into their pockets to book “pods” for special occasions such as Valentine's day proposals.
Operating profits were up by 15 per cent to £24.68 million, making it almost certainly London's most profitable attraction, according to accounts filed at Companies House this week.
The figures, which cover the year to 27 December, also shows total revenue up six per cent at £52.04 million and revenue per visitor up eight per cent.
It is a remarkable performance for a near 10-year-old “temporary” structure that was originally due to be scrapped after five years and was only expected to draw two million a year.
In 2005 the South Bank Centre threatened to increase the rent for the land it stands on from £64,000 to £2.5 million, making the Eye financially unviable. Later that year its future also appeared in doubt when ballooning interest payments on a £150 million loan from British Airways plunged it into losses.
But David Sharpe, London division director for owner Merlin Entertainment, said last year had been “very, very positive” adding that revenues and passenger numbers in 2009 are slightly ahead again. “It has been superb considering it looked as if it was going to be potentially a very tough year,” he said. He added that the profits had allowed Merlin to invest in new features such as the pre-flight “4D” cinema show as well as a £12.5 million programme of refurbishments on the pods in time for the 2012 Olympics.
Since the first paying passengers boarded the then Millennium Wheel in March 2000, it has now carried 35 million people, more than the population of Canada. It ranks as one of the world's top 50 tourist destinations in terms of visitor numbers just behind the Statue of Liberty and the Coliseum but ahead of the Taj Mahal and the Palace of Versailles. It is Britain's most visited paid-for attraction.
Mr Sharpe said London tourism had stood up well to the recession with Merlin's other attractions including the London Dungeon, Madam Tussauds and the Aquarium “all performing to budget”.
