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Aquarium of the Pacific expects to clear all financial hurdles brought on by COVID-19 this year

A child watches penguins at the Aquarium of the Pacific, Thursday, June 17, 2021. Photo by Brandon Richardson.

Children squeal with delight as playful sea otters swim along the glass of their indoor exhibit at the Aquarium of the Pacific. In another room, kids are mesmerized by various jellyfish species floating in their tanks, some with long tentacles gently swaying in the water. Others watch frogs and fish and crabs with wonder.

For most of the last 15 months, guests were relegated to the aquarium’s outdoor exhibits due to strict COVID-19 rules, causing the facility to fall short of its projected revenues by millions of dollars in 2020. But thanks to pent-up demand, the tourist attraction is on pace to finish this year in the black while rebuilding its reserve funds, according to CFO Anthony Brown.

“I don’t want to jinx anything but it seems like the financial hardships of the last 15 months will more or less be resolved by the end of this fiscal year,” Brown said. “If the worst of the pandemic is behind us, we survived.”

For 2020, the aquarium’s budget projected $41.1 million in revenues and $38.5 million in expenses, for a net earnings of $2.6 million. But only being fully open for 91 days last year had a severe impact on the facility’s pocketbook, resulting in the aquarium closing out the year with $13 million in losses despite curtailing expenses by over $9 million, Brown said.

Last year’s budget projected 1.66 million people would visit the aquarium, a target that was missed by 66% with only 568,000 guests walking through the doors all year, Brown said.

The aquarium did score $3.3 million through the federal Payroll Protection Program, which helped offset losses but is currently on the books as a liability, Brown said. However, on June 18, Brown said the aquarium received word that the PPP loan, which has already been spent in full, is to be fully forgiven.

A couple and child observe the diverse marine life at the Aquarium of the Pacific on June 17, 2021. Photo by Tess Kazenoff.

The aquarium also was awarded a $25,000 relief grant from the state and has applied for a Shuttered Venue Operators grant through the U.S. Small Business Administration. Originally meant for concert venues and theaters, Brown said the museum community—including aquariums—lobbied for eligibility. The grant is for a percentage of missed revenue, which means the aquarium could be awarded up to $7 million, Brown said.

“It’s pretty significant,” he said.

But the year did not start off very promising, Brown recalled. The 2021 budget was due in early fall, at which time aquarium leadership expected to be fully reopened by Jan. 1.

“And we weren’t. We weren’t even partially open,” Brown said, noting the extreme winter surge of COVID-19 cases, hospitalizations and deaths. “So we had a pretty big mess … through March because our assumptions were wrong.”

The aquarium approved a balanced $31.8 million budgeted for 2021, meaning projected revenue was the same as projected expenses, Brown said. Anticipated January revenue was $2.2 million but, because the aquarium was only open two days that month (outdoors only), the facility brought in less than $1 million, most of which was donations, according to Brown.

The miscalculation for January threw the whole year into question, but since reopening—outdoors first, followed by indoors in mid-March, with limited capacity—the aquarium has been sold out most days, Brown said. Despite still only operating at 50% capacity, revenues have bounced back—through May, cash revenues reached $14.2 million, $2.6 million above budgeted revenues for that period.

There was one silver lining to the winter closure, Brown noted: The aquarium’s expenses through May came to $10.8 million, $1.7 million under budget with most savings coming from halting marketing and promotions while closed.

Weekend attendance is still well behind 2019 numbers but weekdays have been strong, according to Brown. “It’s really made the difference and helped us get through the first couple months,” he said.

A rainbow lorikeet looks at itself while a girl tries to take a picture at the Aquarium of the Pacific, Thursday, June 17, 2021. Photo by Brandon Richardson.

Attendance for 2021 was projected at 1.2 million but Brown is unsure if they will hit that number due to the rough start to the year. Through May, attendance figures were 350,000 less than expected, he said. But numbers are trending up, Brown added, citing May attendance that was 22% above original projections.

“I’m confident we will continue to have a strong 2021,” Brown said, adding that he is concerned about budgeting for 2022. Once again, the new budget must be presented in the early fall and uncertainty about what the “new normal” will look like is making it difficult to make projections.

A strong year in the black would mean the aquarium can begin bringing back programs, more staff and rebuild reserves that were depleted during the pandemic, Brown said. The aquarium’s operating reserves decreased from $5.8 million to $1.7 million and $6 million of funding leftover from the recent expansion decreased from $6 million to $2.6 million.

Fortunately, with revenues above and expenses below projections, the aquarium already has begun rebuilding its reserves, Brown said. Since reopening in March, operating reserves have rebounded to $4.3 million.

Prior to the pandemic, the aquarium had about 400 employees. Between layoffs and furloughs, staffing dropped to just over 200, Brown said, noting that many jobs had to continue regardless of whether the facility was open to the public. Today, staffing is back up to around 300, he said, noting that as capacity increases and programs return, so will staffing.

The last 15 months have been the most challenging in the aquarium’s 23-year history, Brown said—not just from a financial perspective but mentally and emotionally.

“There were some tough decisions we had to make and just the mental grind that weighed on everyone not knowing what was around the corner,” Brown said. “To come to an empty aquarium is mentally tough and the team did a lot to get through it. I can’t think of a tougher situation.”

“Unlike a museum that has art,” Brown added, “you can’t just throw a blanket over the exhibit and then dust it off when it’s time to reopen.”

A woman and child watch fish swimming by at the Aquarium of the Pacific on June 17, 2021. Photo by Tess Kazenoff.

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