A SELF-FINANCING MARINE PARK:

THE SABA CASE

Short case study prepared for the CANARI Workshop on Revenue Generation for Protected Areas, Saba, Netherlands Antilles,
June 5-9, 1995

by

Tom van't Hof and Kenneth C. Buchan

Introduction

The Saba Marine Park (SMP) was created in 1987 in response to the desire of the Island Government to promote diving and snorkelling tourism, whilst protecting the marine resources upon which such tourism is based. The Park, which includes all near-shore waters of the island to the 60 m depth contour with a total area of 870 ha, has a comprehensive legislative base, the Marine Environment Ordinance 1987. SMP is zoned to allow for a wide spectrum of sustainable human uses. The management of SMP was delegated by the Island Government to the Saba Conservation Foundation (SCF), a local NGO. Although SCF's authority includes all management activities including law enforcement, permitting and legislative changes (on the advice of SMP) remain the responsibility of the Island Government. The Park also operates and administers the SMP Hyperbaric Facility, a recompression chamber used to treat diving accidents.

The main objectives of the Park are:

  • To achieve ecological sustainability and environmental quality.
  • To bring economic benefits to Saba.
  • To manage the park in a socially acceptable manner.
  • To provide an international site for learning about marine biology and management using the Saba Marine Park as a model

Prior the establishment of SMP few divers visited Saba. Dive operators at the time estimated the number of divers at 500 in 1984 and 1,000 in 1986. Following the establishment of SMP the number of visiting divers and snorkellers increased rapidly: from 2,600 in 1988 to well over 5,000 in 1994. Despite the fact that Saba is not among the popular yachting destinations in the northeastern Caribbean, the increase of yachts visiting SMP proved to be even more dramatic (see Table I) .

Table I. Visitors statistics SMP 1988 - 1994

Visitation Parameters 1994 1993 1992 1991 1990 1989 1988
No. of Divers 5,165 4,145 4,025 3,159 3,192 3,624 2,601
No. of Dives 24,383 19,607 17,202 12,952 14,121 16,060 11,664
Average Dives /Diver 4.72 4.73 4.27 4.1 4.42 4.43 4.48
No. of Visiting Yachts 463 416 388 182 131 ? ?
 

The case of SMP provides a good example of co-management: whilst Government retains ultimate responsibility for legislation and permitting, all management activities are delegated to a local NGO, and user groups (primarily dive operators) assist the Park by providing essential information on user statistics, by building environmental awareness among their clientele and "policing" them, and by reporting offences and maintenance needs to the Park Manager.

Financial strategy

The Park was established over the period 1986-1989 with grants totaling US $ 270,000 for investments, personnel and operating expenses from Dutch Development Cooperation, Island Government, and private Foundations. The Island Government continued to subsidize personnel costs through 1992.

Since the park concept included an obvious link between resource protection and tourism, and as the local government was not expected to be able to adequately fund the park in the long term, achieving financial self-sufficiency through revenue generation was a goal from the outset.

In order to become self-financing, SMP embarked on a three-pronged revenue generation strategy:

  • visitor/user fees
  • souvenir sales
  • donations

Additionally, the strategy focused on keeping operating- expenses low by using volunteer assistance where possible, soliciting in-kind services and goods, and requesting grants for "special projects". For example, almost all research and monitoring for SMP is conducted with grant monies.

SMP furthermore benefited from the fact that the Island Government maintained the annual personnel subsidy at the same level until it was cut entirely at the beginning of 1993. As income from fees, sales and donations were increasing; the Park was able to build up a reserve ("trust fund"), which accumulated to over US $ 100,000 by the end of 1992. This trust was considered essential to cover shortfalls caused by fluctuations in income which is obviously sensitive to external factors such as the state of the world economy.

The fee structure was initially targeting divers and snorkellers only. Divers were required by law to pay US $ 1.00 per dive and snorkellers US $ 1.00 per visit to the island. Fees were collected by the commercial operators who are required by the conditions of their SMP operating permit to transfer all fees collected, along with diver and snorkeller statistics, to SMP on a monthly basis. The permit requirement, in turn, is anchored in the Marine Environment Ordinance, with sanctions against non-compliance including suspending or revoking the permits. The fees were later raised to US $ 2.00 per dive and per snorkeller, while also a yacht mooring/anchorage fee was introduced (based on the number of passengers or crew on board, or on gross tonnage for larger vessels), which included the snorkelling fee.

Donations were received mainly from "Friends of SMP", primarily park visitors who signed up to support SMP and receive information on SMP via a newsletter. Initially, through a project with WWF-US, US citizens (most Park visitors originate from the US) were given the opportunity to make tax-deductible contributions benefiting SMP, to WWF. Upon completion of the WWF project, a "Friends of Saba Conservation Foundation" organisation was incorporated in the US, which received non-profit status from the IRS. This was done at minimal expense to SMP and SCF, as US "Friends" provided most of the services required for incorporating the organisation and obtaining its non-profit status, for free. These "Friends" continue to produce "SCF News", the quarterly newsletter, and distribute it using bulk mailing rates available to non-profit organizations, all of which amounts to considerable savings.

Souvenirs on sale include T-shirts, sweat shirts, polo shirts, caps, emblems, books, postcards, artwork, maps, and logo pins. All items are related to the Marine Park or to conservation in general. The assortment and sale of souvenirs is restricted by the limited space of the present SMP office and could be significantly increased if and when the proposed SMP visitor centre comes into being.

Financial results

The 1994 and 1995 SMP budgets amount to approximately US $ 111,000. This modest budget (modest in comparison to the size of the area managed and the number of visitors) includes US $ 94,000 for Park expenses, and US $ 17,000 for expenditure related to the SMP Hyperbaric Facility (see table II). The expense side of the budget includes a depreciation allowance, SMP trust, SMP Guidebook reprinting allowance, and a Hyperbaric Facility trust. The depreciation and SMP Guidebook reprinting allowance are fixed amounts at US $ 12,500. The results have shown a contribution to the trust fund in certain years (mostly due to the Government maintaining its personnel subsidy at the same level) and a contribution from the trust fund in others. The revenue and expected revenue generated, averaged over the years 1993-1995, is distributed as follows:

Visitor fees 51%
Gross souvenir sales 32%
Donations 9%
Other income 8%

Table II. Saba Marine Park Budget 1995.

Saba Marine Park
Budget 1995

All figures in Antillean Guilders
(Naf 1.8 = US $1.00)

INCOME
AMOUNT
 
DIVE VISITOR FEES
74,000
YACHT VISITOR FEES
11,000
SOUVENIR SALES (gross)
50,000
SMP DIRECT DONATIONS
4,600
FRIENDS Inc.DONATIONS
5,000
INVESTMENT INTEREST
7,000
MISCELLANEOUS INCOME
1,000
 
    152,600
EXPENSES
PERSONNEL
SALARIES
78,000
TRAINING AND UNIFORMS
8,000
 
OPERATING EXPENSES
BOAT OPERATION AND MAINT.
14,000
MOORING MAINTENANCE
6,000
EDUCATION/INFO./RELATIONS
2,000
EQUIPMENT
3,000
FUND RAISING
500
OFFICE ADMIN./OPERATION
8,000
SHED/WORKSHOP EXPENSES
500
RESEARCH AND MONITORING
2,000
TRAVEL
1,000
TRUCK OPERATION/MAINT.
3,000
INSURANCES
3,500
MISC. (BANK CHARGES ETC)
2,000
 
131,500
 
SOUVENIR PURCHASE
15,000
DEPRECIATION
13,500
GUIDEBOOK REORDER
9,000
 
169,000
YEARLY DEFICIT FROM SMP TRUST
16,400

 

Table II. Contd. Saba Marine Park Budget 1995.

Saba Marine Park Hyperbaric Facility
Budget 1995

All figures in Antillean Guilders
(Naf 1.80 = US $ 1.00)

INCOME
Treatment income (includ. receivables)
11,5000
Bad debt
-30,000
 
85,000
EXPENSE
OPERATING COSTS
Equipment supplies & oxygen
5,000
Equipment repair and maintenance
4,000
Equipment shipping
1,000
Education & information
400
Public relations/Travel
1,000
Insurances
3,500
Building repair, maint. & elec.
4,500
Depreciation
Tank
20,000
Building & Supplies
3,700
 
43,100
 
Capital reserve
41,900

 

In 1993, the first year after the personnel subsidy was cut, the financial results show a rather large deficit, which was supplemented from the SMP trust fund. However, this deficit is largely due to certain unusual expenses and some reimbursable expenses. Also, one has to bear in mind that the budget is always inflated because of the US $ 12,500 depreciation and SMP Guidebook reorder allowance. Taking these factors into account, one may conclude that the 1994 and 1995 budgets are essentially balanced, and that SMP has achieved its goal to become a self-financing entity within the Saba Conservation Foundation. It is also noteworthy that the assets in the trust fund have not decreased significantly (see Tables III and IV).

Lessons to be learned

The Saba Marine Park Case study presents a rather unique example because of a number of factors: the small size and scale of development on the island, the relatively unimpacted state of the resources prior to development of the Marine Park, and the short links between the community and decision makers.

Nevertheless, a number of important lessons which will have applications elsewhere can be derived:

  • It is essential to consider the full range of funding options available for protected areas, and to apply all options applicable and available to a particular situation.
  • Start-up funding for protected areas is usually easier to obtain than funds for continued operation. The prospect of self-financing parks will further enhance the chances of obtaining start-up funding and ensuring the long-term success of any protected area project.
  • When fund raising for protected areas, demonstrate that parks make economic sense. This means not only that parks can pay for themselves, but also that they can bring foreign exchange into the local economy.
  • Visitors are willing to pay for conservation and for well-managed parks, more than most people think. Willingness-to-pay surveys have pointed out that visitors are generally willing to pay even more than existing fees providing that a number of conditions are fulfilled:
    1. That fees are not going into the general treasury, but are being applied directly to park management
    2. That their contributions are effectively put to work (e.g. rangers patrolling the park, offenders prosecuted)
    3. That they receive tangible benefits from their fees (mooring buoys in marine parks, well-maintained trails, signs, information and interpretation) .
  • Visitors are frequently willing to make voluntary contributions in addition to mandatory fees, if they like the experience they had. A "Friends-of-the-Park" group can be of special value in this respect. However, in setting up such organisations, it is important that people receive benefits in return for their contributions, that contributions are acknowledged at a personal level, and that incentives are provided for larger donations.
  • NGO involvement in managing protected areas may help considerably in directing revenue back into the parks.
  • Community and visitor support for protected areas is essential to the acceptance of revenue generation for and by protected areas.
  • It is essential that any visitor fee system is based on solid legislation.
  • It is preferred not to hide visitor fees. Fees can be incorporated in packaged tour prices, but people are generally proud to contribute to conservation.
  • Keep the fee collection system as simple as possible, for all parties. Visitors do not want to be unnecessarily burdened with payments. Many of them are on vacation and want to have a good time! A simple fee collection system also saves money. In general, one should keep collection costs at less than 10% of the revenue.

Table III. Saba Marine Park Income and Expense Report 1994

Saba Marine Park
Income and Expense Report
1994

All figures in Antillean Guilders
(Naf 1.8 = US $1.00)

INCOME
 
SMP GENERATED REVENUE
 
Dive visitors fees
90,470.00
Yacht visitors fees
11,938.00
Souvenir sales
50,578.00
Direct donations
5,713.00
Interest on Bank Accounts
5,009.00
Miscellaneous
1,462.00
 
GRANTS:
Friends Inc.
13,886.00
WWF Netherlands
14,070.00
 
EQUIPMENT SALE:
Boat
9,000.00
 
202,126.00
 
EXPENSE
 
PERSONNEL
Salaries
75,143.00
Pens i on/AOV/AWW
4,536.00
Wage Tax
7,848.00
Training & Uniforms
6,057.00
 
OPERATING EXPENSES:
 
Boat operation & maintenance
18,922.00
Dive & Yacht mooring maintenance
6,651.00
Education/info./P.R.
2,799.00
Office Cc Shed Expenses
19,382.00
Research and Monitoring
864.00
Travel
2,351.00
Truck operation & maint.
2,027.00
Miscellaneous
174.00
Insurances
3,116.00
 
EQUIPMENT PURCHASES:
 
Inflatable Boat
9,000.00
 
PROJECT EXPENSES (to be reimbursed)
 
WWF Baseline Extension
8,609.00
WWF Economic Analysis
7,023.00
WWF Fish census
4,381.00
 
20,013.00
 
Souvenir purchases
19,854.00
Depreciation
14,418.00
Guidebook reorder
9,000.00
 
222,155.00
Deficit
-20,029.00
Monies to be reimbursed (WWF)
20,013.00
 
-16.00

 

Table IV. Saba Marine Park Liquid Assets (All figures are in Antillean Guilders. Naf 1.80 = US $ 1.00)

YEAR
1993
1992
1991
1990
1989
Liquid Assets
188,626
196,665
88,314
100,269
86,317