Marine park operator Dolphin Cove Limited is advancing plans for the expansion of two parks, on the heels of what has been its best annual performance in its 22-year history, and expectations of increased business to come from larger cruise ships calling at the ports.
Chairman and CEO Stafford Burrowes is also at looking to grow the company by means of acquisition, but for now is focused on local expansion works at Dolphin Cove in Lucea, Hanover, and the Yaaman Adventure Park in Negril, both of which will be part-funded by investments the company has set to mature in the short term.
Dolphin Cove has been pumping cash into new features at the Yaaman Adventure Park ever since business there was slowed by the outbreak of the COVID-19 virus. Ticket sales from the adventure rides are said to be on the rise there.
Yaaman added adventure rides to Dolphin Cove’s main business line, as a marine park operator and dolphin attraction, but Burrowes wants to diversity the company’s revenue base even further to capitalise on the higher numbers and varied demand for attractions and tours from passengers aboard the larger vessels that have been docking in Jamaica since August 2021, following a 17-month hiatus induced by the pandemic.
“The vessels that are coming to the ports post-COVID are a lot larger in size and carrying much more passengers and so we believe that there’s opportunity to widen our client base,” Burrowes told the Financial Gleaner.
“Additionally, there are lots of hotels set to go up on this side of the island and that effectively means more business for us,” he said.
When the pandemic restrictions were lifted in the summer of 2021, the Carnival Cruise and Royal Caribbean cruise lines had promised to send some of their largest vessels to Jamaica. From those promises, some 110 cruise calls with 200,000 cruise passengers were projected between October 2021 and April 2022. The commitment was subject to continued close collaboration between the Jamaican authorities and the cruise lines on logistics and public health guidelines.
Royal Caribbean has four of the biggest cruise ships ever to be built: Oasis of the Seas, Allure of the Seas, Harmony of the Seas and Symphony of the Seas. The latter ship was once the biggest, but it has been superseded by another Royal Caribbean vessel called Wonder of the Seas, which has become the world’s largest cruise vessel.
Jamaica welcomed the latter ship last year, pushing cruise passenger arrivals, overall, to 855,000 in 2022. Tourism Minister Edmund Bartlett expects that number to climb to 1.4 million cruise passengers for this fiscal year.
Already, Dolphin Cove is seeing the net effect on its business, having recorded earnings of US$2.96 million for the year ended December 2022, on revenues of US$15.1 million. Just over half of its sales, 51 per cent, came from its dolphin and interactive programmes, while the rest was generated from other tours, food, and other products and services.
Overall, revenue outperformed the 2021 financial year by 99 per cent, reflecting a gain of US$7.5 million, and was also two percent better than the out-turn in the pre-pandemic 2019 period.
Based on its financial results, Dolphin Cove paid dividends of 80 per cent for the year, amounting to $314 million (about US$2 million), making it its biggest distribution in any annual period.
Last year, the company generated US$5.6 million in cash flows from operating activities, out of which Dolphin Cove said it has placed US$1 million in a short-term investment facility which it will use to part fund its expansion. A budget for the expansion plans was not disclosed.
“The funds will come from that and other means,” said Burrowes.
“COVID was a tough time for parks, but we were fortunate enough not to go into the pandemic with any debt; and we have recovered very quickly and very well. We are looking for any other type of business, not just expansion, but anything that would be complementary to our business because have a very good market,” he said.
Dolphin Cove operates six sites across in Jamaica and has several development plans on the card, inclusive of St Lucia, where it previously made a 40 per cent deposit on the construction of a new encounter park, and in Turks & Caicos, where it also setting up a marine attraction.
On Tuesday, Burrowes told the Financial Gleaner that the company is still in wait-and-see mode regarding execution of the projects outside of Jamaica.
“We are pretty confident about the Jamaican market and so were not hesitant about expanding, but as for the other markets, we will just have to wait and see how those market recover from the pandemic, so for now they are still on hold,” he said.
As for the expected sale of the 23-property it owns in Hanover, Burrowes said prospective buyer Reserve Investments Limited has opted to continue leasing the site for another year.