Pandanomics - Can Edinburgh Zoo Get a Return on its Cuddly Investment?

It was business class all the way for Tian Tian and Yang Guang on board the suitably-sponsored FedEx Panda Express (as this exclusive snap suggests!). However, will the Pandas prove to be a worthwhile investment for Edinburgh Zoo?

Giant pandas Tian Tian and Yang Guang are the first to live in the United Kingdom in 17 years. They are also expected to be a big source of tourism in Edinburgh - and they will need to be given the substantial annual costs involved in having them stay in Edinburgh.

The most significant fixed cost is an annual rent of $1million (approx £640,000) which the Zoo has to pay China. Then there is an upfront investment of £250,000 to build the panda enclosure, to which you need to add the running costs involved in feeding and caring for the pair.

The Guardian has attempted to calculate the breakeven level of extra tickets that will need to be sold by the Zoo to cover the costs of an expected 10 year stay. They estimate that approximately 1,000 extra visitors will be needed each week over 10 years.

Can you see how they have calculated that figure? Does it take account of the potentially significant additional merchandise and refreshment sales that might be generated by visitors keen to catch a glimpse of Tian Tian and Yang Guang?

Have a go and calculate your own figures. Is it a worthwhile project for the Zoo? What will the commercial success of the investment depend on?

Key revenues and costs for the Pandas (courtesy of The Guardian)

£640,000 The amount Edinburgh zoo will pay every year to rent the pandas (their stay is planned to last 10 years).

£285,000 Cost of building enclosures at Edinburgh zoo.

£70,000 Cost of feeding both panda for a year, with bamboo imported from an organic farm in the Netherlands. (Pandas spend 14 hours a day eating and get through 18,000kg of bamboo a year).

£15.50 Price of an adult ticket to Edinburgh zoo. Children get in for £11 (family tickets are available).

916 Number of extra adult tickets that will need to be sold each week for 10 years to cover costs.

£30 Price of the small PandaRama bag, the first piece of merchandise announced by Edinburgh zoo on Twitter.

£40 Price of the Sing Sing Panda iPod dock, also on sale at the zoo.