Merlin Entertainments, operator of Madame Tussauds waxworks and other attractions, has seen a fall in demand from domestic tourists following recent attacks in London and Manchester and said  foreign visitors could stay away in the coming months.

Shares in Merlin, the world’s second-biggest visitor attractions group behind Walt Disney, fell by as much as 4.1 per cent to lead fallers on the blue chip FTSE 100 index.

The firm, which also runs the London Eye and the Sea Life aquarium, said trading in its London business in the early part of the year had benefitted from an increase in foreign visitors to Britain, reflecting the weaker pound.

It said this trend continued in the immediate aftermath of the attack in Westminster on March 22, although that incident did result in a softer domestic, day-trip market.

Merlin said the subsequent attacks in Manchester on May 22 and London Bridge on June 3 resulted in a further deterioration in domestic demand.

“Given the typical lag between holiday bookings and visitation, we are also cautious on trends in foreign visitation over the coming months,” the firm said.

Merlin, which also owns Legoland and theme parks such as Alton Towers, said overall group trading to date had been broadly in line with expectations. It noted that over 70 per cent of 2016 profit was generated from outside the UK.

“I remain confident in the company’s underlying growth prospects,” chief executive Nick Varney said. He said the longer term impact of the terror attacks was unclear. “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.”

Shares in Merlin, up 12 per cent this year, were down 14 pence at 488.8 pence.