Adelaide Zoo Adelaide Zoo $24 Million in Debt

[zooboy28]

Not ideal, hope they have a plan to get through this.

Adelaide Zoo $24m in debt - ABC Adelaide - Australian Broadcasting Corporation

It has been revealed today the Adelaide Zoo is $24 million in debt and the State Government has had to step in and assist the institution financially.

The Minister for Environment and Conservation, Paul Caica, announced in parliament today the government had given Zoos SA $2 million to help see it through 2011/12, which sparked fears the zoo may close.

Professor Chris West, CEO of Zoos SA, was quick to quell any worries and assure people there are no job cuts planned and the zoo will be staying open.

"Clearly it's a serious situation... but we are confident that we can work this through."

Prof West says economic burdens outside of the zoo's control are to blame for the financial hardship, but admitted a lack of sponsors for the prize exhibit, pandas Wang Wang and Funi, was adding to the difficulty.

"The root cause is mainly because of the Global Financial Crisis and the fact that we didn't achieve as much corporate sponsorship as we planned to."

Zoos SA is an independent conservation charity but Mr West acknowledges the connection between his organisation and the State Government.

According to Prof West, a mutually beneficial relationship has grown between the zoo and government, which has encouraged conservation and education within the community.

"But in simple tourism and financial terms," he said, "we also make a very large contribution.

"Last year the pandas made a contribution of nearly $60 million to the economy of the state and Zoos SA as a whole made a contribution of about $116 million."

Minster Caica was less enthusiastic about the overall contribution the panda's had made to the operational costs of the Adelaide Zoo.

"The government has recently been informed that while the pandas have indeed attracted many more people through the gates, including from interstate and overseas, and revenues have increased in the form of sponsorships, memberships and events, these revenues have not been able to match the increase in the zoo's operating expenses," he said.

The State Government is currently involved in a review of the economic management of the Adelaide Zoo, that includes both the zoo's board and management teams.

Prof West says he welcomes the review, the zoo is safe, employees will keep their jobs and the pandas are staying put.

"The last thing that we'd ever plan to do would be to send the pandas back to China."

 

[Electus Parrot]

Does not surprise me one little bit. Personally as an Adelaide Zoo-goer, I feel the pandas were a waste of time and money. I think once everyone saw the pandas once, they realised how boring they usually are.

 

[Hix]

Koalas sleep more than pandas, and lions sleep alot too, but that doesn't stop them being popular.

Just wait until they breed the pandas, zoo attendances will skyrocket.



Hix

 

[tetrapod]

Koalas sleep more than pandas, and lions sleep alot too, but that doesn't stop them being popular.

Just wait until they breed the pandas, zoo attendances will skyrocket.



Hix

As far as I know you cannot train pandas to jump through hoops and the like.

Breeding...! Even the Chinese have difficulty breeding pandas (properly).

Edinburgh beware...

 

[Steve Robinson]

Somebody must be pulling somebody's leg about this!

The Federal Government pays the Chinese Government $1million a year for the Pandas.
The South Australian Government paid $18.9million for a new entrance, fencing and conference centre for Adelaide Zoo to capitalise on the boring beasts.
Visitation at the zoo is up by 70%.
Zoo membership is up by 25%
And still the zoo is $24million in debt????????????????

How much were they in debt before they started spending money on Giant Pandas?

 

[Steve Robinson]

Just wait until they breed the pandas, zoo attendances will skyrocket.



Hix

Attendances have skyrocketed 70% already and they are $24million in debt.

Baby Pandas might send them completely broke!

 

[nanoboy]

Attendances have skyrocketed 70% already and they are $24million in debt.

Baby Pandas might send them completely broke!

Haha.

I assume that a zoo is run like any other for-profit organisation, where the aim is to make a profit to re-invest in the business, or at worse, to break even.

If the zoo is in so much debt, maybe it is because they borrowed money to invest in expansion and improvement, in the hope that they would become profitable again in the next few years. It sounds like their efforts have been working if membership and visitor numbers have increased so much. So maybe what we are seeing isn't such a big deal after all, and they will be in the black in a couple years, as forecast?

 

[Steve Robinson]

Yes - I think that the crucial [but missing] piece of information is the level of debt before they started spending money on Giant Pandas.

 

[CGSwans]

Yes - I think that the crucial [but missing] piece of information is the level of debt before they started spending money on Giant Pandas.

That's one piece. But there's heaps more to know before trying to assess whether this is even a problem. What is the gearing ratio? What is the forecast interest liability? Is the organisation's cash flow sufficient to meet liabilities if they fall due (in other words - are they solvent)? Does the debt only arise from capital works, or have they borrowed to pay operational costs?

Debt is not, prima facie, a problem.

 

[nanoboy]

That's one piece. But there's heaps more to know before trying to assess whether this is even a problem. What is the gearing ratio? What is the forecast interest liability? Is the organisation's cash flow sufficient to meet liabilities if they fall due (in other words - are they solvent)? Does the debt only arise from capital works, or have they borrowed to pay operational costs?

Debt is not, prima facie, a problem.

Yeah! That is what I was trying to say, but I didn't know the correct financial terms.

 

[Chlidonias]

South Australians say Adelaide Zoo is too expensive | Adelaide Now

SOUTH Australians say Adelaide Zoo is too expensive and a price rewind or discount offers would encourage more people to visit.

Responding to yesterday's report in The Advertiser that Zoos South Australia had fallen into a $24.4 million financial black hole, a resounding number of AdelaideNow readers said they could no longer afford to go.

Adelaide Zoo is more expensive than the Melbourne and Perth zoos, but is cheaper than Taronga and Western Plains Zoo in NSW, and Australia Zoo in Queensland.

A family pass for two adults and two children costs $85 here, compared with $78.40 at Melbourne Zoo, where an extra three children are admitted.

The price of an adult ticket in Adelaide has risen from $15 in 2004 to $31.50.

AdelaideNow reader "Love it but too expensive" used to visit the zoo four or five times a year, but could no longer afford the cost. "Add up admission price, food and carpark and it comes out to over $100 - and forget the very expensive zoo shop."

According to the Zoos SA's latest available annual report, admissions at Adelaide Zoo dropped slightly in 2008-09 to 369,549, after dropping by more than 30,000 the previous year.

Attendance numbers at Monarto have been growing, but overall visitor numbers to both zoos were 5 per cent lower in 2008-09 than two years previously.

 

[CGSwans]

That is a huge increase in admission price over a 7 year period. I know that Adelaide has made some major improvements in that time, but a 110% jump in price when inflation over the period was about 19% is massive.

 

[Chlidonias]

Snelling to get tough on zoo crisis | The Australian

23 June 2011

SOUTH Australian Treasurer Jack Snelling has vowed to ask "serious questions" of three government representatives on the board of the Adelaide Zoo as it struggles with debts of $24.4 million acquired on the backs of two giant pandas.

This comes as it can be revealed Di West, the wife of zoo chief executive Chris West, was appointed more than a year ago to a key position with responsibility for sponsorship and membership.

Professor West said the "root cause" of the financial problems had been a shortfall in corporate sponsorship.

Ms West yesterday told The Australian the sponsorship section of the zoo "report in to me", but she was gagged from speaking directly to the media.

A spokeswoman for the zoo refused to comment because "we don't want this story to develop any further".

However, in parliament yesterday the opposition probed the role of three public servants - including a representative from Treasury and Finance - who serve on the board.

Liberal Treasury spokesman Iain Evans asked how the zoo had come to have increased debt to "unsustainable levels".

Operating costs had grown from $7m five years ago to a forecast $21m for the next financial year.

"Did representatives of the government ever raise concerns about the zoo's finance with the Treasurer and, if not, what was their purpose of being on the board?" Mr Evans asked.

Mr Snelling told parliament he would investigate and be asking "serious questions".

"I will be asking some serious questions," Mr Snelling said.

"The government expects the best of public servants who serve on boards representing the government and if there has been some inadequacies then I will take the appropriate action."

Mr Evans asked: "The government gives the zoo $3m a year, it gave them $18m for the panda enclosure - what financial mechanism of reporting back did they have in place?

"When did the government representatives alert the government to the financial problems?"

The full extent of the financial problems facing the Zoological Society, which runs the Adelaide Zoo where giant pandas Wang Wang and Funi live, was outlined by Environment Minister Paul Caica in parliament on Tuesday.

The not-for-profit organisation's debt includes $6.7m for the giant pandas.

When the zoo failed to secure sponsorship for its $27m new front entrance, fence and conference centre, the state government provided a one-off capital grant of $18.9m, on top of the $3.126m in operating funds provided annually in the budget.

 

[Chlidonias]

Claims $24m debt the result of poor decisions | Adelaide Now

23 June 2011

FORMER board members and staff of Zoos South Australia have questioned how its debt has blown out to $24 million.

They have suggested management was wrong to invest in projects it did not have funding to cover.

As concerns grow over the not-for-profit organisation's precarious financial position, it has been revealed that it is yet to finalise its 2009-10 annual report, nearly 12 months after that financial year concluded.

A source close to the zoo said taking over management of Warrawong Sanctuary in the Adelaide Hills in May last year was a poor decision, and relying on sponsorship dollars for working capital was bad practice.

However, chief executive Chris West said the zoo was instead a victim of the global financial crisis.

He said the zoo's economic contribution to the state last year was $116 million - most of which was generated because of the giant pandas. Nearly $7 million of the debt is from paying for the pandas.

"We've had independent people look at our governance and financial management and what they're coming back with is a picture of under-investment and our challenge is to stretch to service that level of debt," Mr West said.

"The story really is about how a relatively small charitable organisation was in a position of having to stretch to cover capital investment for the facelift of Adelaide Zoo and the pandas.

"Then, part way through, the GFC hit and we have been, if you like, behind the ball since that point."

Former board members contacted by The Advertiser said they were shocked that the debt had blown out by so much. They suggested management should have acted more prudently in its investments. None wished to be named.

A spokeswoman for the zoo said the 2009-10 annual report was not finished but would soon be ready for release. Its latest-available annual report shows Zoos SA's operating costs ballooned by more than $2 million in 2008-09, while admissions revenues increased by just $169,967.

The zoo's finances are heavily influenced by grants, donations and bequests. It received $10.5 million in extra revenues in 2008-09, boosted by an $8.9 million increase in grant revenues to $12.5 million.

The State Government has advanced $2 million of the zoo's 2011-12 allocation to help ensure its operations.

 

[Electus Parrot]

I rember back when it would cost me, a child, $8 to get in, and my parents $14 each. Since then, it has mor ethan doubled for both of these!

I think the price of the zoo increased by $10 or so when the pandas came along, otherwise the price was still alright.

 

[Chlidonias]

Adelaide Zoo needs new cash cow | Adelaide Now

29 June 2011

A FURTHER financial bailout for the Adelaide Zoo is likely because of its ongoing financial difficulties.

Treasurer Jack Snelling told Parliament's Estimates Committee yesterday that he could not rule out further funding for the zoo, which is $24 million in debt.

Mr Snelling told the Estimates Committee that Treasury was looking at the zoo's finances.

"We are working through what the options are," he said. "But it is more than likely the Government is going to have to do something to stabilise the zoo's finances."

The State Government has advanced $2 million of the zoo's 2011-12 allocation to help ensure its operations.

Government sources have told The Advertiser the zoo's finances are "in a mess".

Mr Snelling said he could not comment on what the zoo's private sector creditors were likely to do.

Environment Minister Paul Caica announced the initial bailout in a statement to Parliament earlier this month, blaming the zoo's problems on the global financial crisis and a shortfall in private sponsorship.

It was understood the zoo had been expecting sponsorship of about $10 million but fell $8 million short. Unlike interstate zoos, the Adelaide Zoo is privately operated, by the Royal Zoologicial Society, and receives around $3 million a year from the Government.

Opposition Treasury spokesman Iain Evans said he could not see how the Government could avoid putting more money into the zoo.

However, he did not think the Government would take over the zoo. "They are more likely to call for possible management changes or a restructure," Mr Evans said.

He was critical of the Government's financial oversight considering there were public servants on the board.

"When did Paul Caica first know about the zoo's financial difficulties and when did his department first tell Treasury?" Mr Evans said.

Mr Snelling said Treasury became aware of the zoo's predicament around April when told by the Environment Department.

Zoos SA chief executive Professor Chris West said the zoo was working with the Government to find a long-term sustainable model that provided a positive economic contribution as well as education, conservation and community benefits.

 

[Simon Hampel]

I admit that I have not paid attention to the cost of zoo entry since I bought my wife a life membership years go - we get in for free to both Adelaide and Monarto zoos.

However, I do feel that by pricing entry too high, they not only limit potential visitor numbers, they also are doing the community a disservice by not giving more people the opportunity to be exposed to the conservation messages that are such a powerful educational tool for zoos.

I level the same criticisms about zoos in Sydney - they are just too expensive for most families.

 

[nanoboy]

Maybe there should be 3 pricing structures: one for locals, one for Aussies, and one for international visitors.

 

[Electus Parrot]

There are two issues to that. Tourists would that was not fair and not bother going, and the second issue is, how can you tell quickly and certainly (so not holding up the lines to get in). Unfortunately Adelaide Zoo has moved from being the nice, clean zoo with a great collection of mammals, birds etc, to a collection that has lost half of its diversity because of two pandas (this change has been because under Chris West I believe).

 

[nanoboy]

There are two issues to that. Tourists would that was not fair and not bother going, and the second issue is, how can you tell quickly and certainly (so not holding up the lines to get in). Unfortunately Adelaide Zoo has moved from being the nice, clean zoo with a great collection of mammals, birds etc, to a collection that has lost half of its diversity because of two pandas (this change has been because under Chris West I believe).

Maybe have at least one person in the party show a form of ID? I need to do this every time I flash my FOTZ card, but I am usually held up in the queue by people fumbling to find their wallets, and asking questions about the price anyway.

If the present price remains the same for tourists (and the price for locals/Aussie is reduced), the tourists will just accept it for what it is. I have been to a few establishments overseas and experienced that and couldn't be bothered by the price difference really.