Alton Towers operator Merlin reveals drop in visitors after terrorist attacks

The group, which run the Staffordshire theme park, said concerns had resulted in fewer visitor numbers at its attractions such as Madame Tussauds and the London Eye.

In a trading update covering the year to date, the firm said incidents in Manchester and London have dented domestic demand, with Merlin "cautious" on the levels of overseas visitors in the coming months.

Trading at Merlin's Legoland Parks and theme parks - such as Alton Towers - has been in line with expectations, but some have been "adversely affected in recent weeks by the terror attacks and subsequent heightened security measures", the company added.

Merlin said it benefited from the collapse in the Brexit-hit pound as more foreign tourists flocked to London, which continued in the immediate aftermath of the Westminster attack on March 22.

But the group added: "The incident did result in a softer domestic, day-trip market.

"However, the subsequent attacks in Manchester and London over the past month have resulted in a further deterioration in domestic demand and, given the typical lag between holiday bookings and visitation, we are also cautious on trends in foreign visitation over the coming months."

Merlin's other attractions in the capital include London Dungeons and Sea Life.

Boss Nick Varney said the impact of the terror attacks is still "unclear at this stage", but he backed the city to bounce back.

He said: "What is clear, however, is that London has bounced back before, and will do again.

"I have every confidence in the longer-term resilience and growth trajectory of the market. London is very much open for business, welcoming visitors from the UK and from around the world to this exciting and vibrant city."

He added that he remains "confident in the company's underlying growth prospects".

Shares in Merlin fell 2.4% in morning trading as investors digested the news.

Neil Wilson, senior market analyst at ETX Capital, said: "Merlin had already warned in March when it released its 2016 full-year preliminary results that the threat of terror attacks had hit its UK business, citing events in Paris and Brussels as having an impact.

"But it is worth noting Merlin is only about a third of the way through a planned global expansion of Legoland.

"There ought to be considerable new revenue streams coming in the longer term that investors who are worried about terror threats to the UK business in the near-term may want to look more closely at."