The Edge

Richard Northedge takes on corporate finance

Edinburgh zoo Panda’s - Pandanomics!

Paying £750,000 a year for a brace of pandas! The same question applies to the monochrome mammals as to all other immigrants: can they pay their way or will they be a burden on the public sector? Well, maybe the bamboo eaters can be self-sufficient or even profit centres.

Edinburgh zoo is renting a pair of the Chinese bears for $1m a year. It has spent £285,000 building them an enclosure and faces a £70,000 a year bill for stuffing them with bamboo shoots. Write-off the cost of the compound over the decade of the lease and that comes out, with not much rounding, at £750,000 a year.

But the Scottish zoo charges £15.50 per adult entry. So it requires 48,000 more visitors a year to finance the pandas, and as it claims to have 550,000 visitors already (not all full price, of course) that would be a mere 9 per cent increase. Given the scope for increasing that ticket price now there’s a reason for attending, the visitor numbers needn’t rise even that much.

Well, if anything is going to make people go to a boring zoo full of stick insects now that chimps’ tea-parties and elephant rides have been banned, it is surely a pair of cuddly ailuropda melanoleucas. That’s Tian Tian and Yang Guang to their friends back home in China, and if they had a good agent they would be receiving a cut of that revenue.

Adelaide and Atlanta reckon that putting a panda in their zoos increased visitor numbers by two-thirds; Edinburgh is banking on only half that.

It seems so obvious a money-maker you wonder why some modern-day Barnum or Bailey hasn’t hired a couple of pandas to hawk round fairgrounds. Indeed, you wonder why China has leased them out so cheaply, but of course, while pandas are rare on earth, in their home country China has a surplus of the animals to rent out. So sending pandas to Europe, America, Australia and who ever else needs a tourist boost make sense.

The downside for Edinburgh is that the eight year old animals don’t survive into middle age, but DoFonline’s animal actuary reckons they have a couple of decades ahead of them – twice the length of the lease. The upside is that they produce a panda cub and the visitor numbers and admission price soars. China gets to keep the baby, but by then, so what – Edinburgh zoo will be a cash cow.

The greater downside is that Britain is pandared out – we’ve seen enough television pictures of these black and white sloths not to want to see them in their immobile real life. It’s a big risk for a local authority, but exploiting innocent animals is the least of local government’s sins. Maybe every city should hire a pair or furry exotic mammals?

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