Farm finances not getting better

The Cayman Turtle Farm, which was taken over by the government in 1983, receives about 230,000 visitors per year. That makes it the most popular land attraction for visitors in the Cayman Islands and the second most popular attraction overall next to Stingray City and the Sandbar in Grand Cayman’s North Sound.  

However, to just “break even”, facility Managing Director Tim Adam estimates they would have to draw twice that number – 460,000 people – about one-quarter of Cayman’s current yearly total visitors, counting both cruise ship and stay-over tourist numbers.  

That number is not likely to be reached unless Grand Cayman can install a new cruise ship berthing facility in George Town and/or a berthing facility at the West Bay Public Beach, Mr. Adam said. When the Turtle Farm was expanded in the early part of last decade, the business model called for the construction of a cruise dock at the public beach.  

“In the current scenario, where we don’t have a cruise dock…we have to bear in mind that about 70 per cent of our revenues come from the cruise business,” Mr. Adam said.  

He also says an aggressive tourism marketing campaign targeted at stay-over visitors is under way, but that alone won’t make the numbers the farm needs to be solvent one day.  

Financial records show the overall net loss figures for the Turtle Farm have dropped from about $13 million in 2007/08 to about $8 million in 2010/11.  

Personnel costs for the farm operation have dropped by about $1.8 million in the last two years, mainly due to the layoff of 20 staff members at the facility in mid-2010. Revenues have increased slightly in recent years, but they are not keeping up with the costs of operating the Turtle Farm.  

While some of that could be considered good or at least better news, other farm operating costs have increased. For instance, the facility’s electric bill went from $1.2 million in 2009 to $1.7 million in 2010; an increase of more than 40 per cent in a single year.  

The farm also lost $3 million in depreciated assets in one year between the 2011/12 and 2012/13 fiscal years.  

Over the past four government budgets, including the current 2012/13, the Cayman Islands government has spent or plans to spend an average of $9.775 million each year in ‘equity investments’ for the continued operation of the Turtle Farm.  

The payments, according to Turtle Farm Chief Financial Officer Phillip Fourie, are mostly to pay off debt accumulated by the farm during a redevelopment and expansion effort that was undertaken between 2001 and 2004 and other loans that were taken since that time  

For instance, this year Fourie says about $6 million will be paid from the government subsidy to retire the principle and pay off interest on that debt. The other $4.5 million will go to making up operational costs of the farm that its revenues cannot support.  

The majority of the remaining facility debt, about $31 million as of the end of October, will be paid off by 2019 or earlier, according to farm officials.  

When the Turtle Farm may manage to retire its debt is immaterial to the debate, according to officials with the UK-based World Society for the Protection of Animals. The problem is the tourism facility’s business model is no longer relevant from when it was first established, WSPA officials said.  

Initially the Cayman Turtle Farm was mainly focused on the sale of turtle products; not only meat but oils, shells and other products, according to the agency’s report. When the Convention on International Trade in Endangered Species was established, such trade outside of the Cayman Islands became illegal.  

A transition from the turtle product trade to tourism seemed a logical alternative at the time, the WSPA said, but it hasn’t worked.  

From 2001-2004, the farm underwent a major tourism-focused redevelopment … at a cost of some US$47.5 million. Complications and “excessive fees” from securing loans for the project have been an “ongoing source of discussion on the Island”. Loss of assets during 2004’s Hurricane Ivan was also significant.  

A loan from Cayman National Bank “to the tune of” $8.8 million was sought and obtained in 2006 after the farm “continued to generate significant losses and experienced cash flow difficulties”, according to the WSPA report.  

The farm remains heavily in debt with total long-term borrowings of approximately US$55.6 million. Those balances were totalled by WSPA as of June 2010. Today, farm officials said its debts are less than half that amount. 

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