Burrows…Our plan is to develop a family resort on this land (Photo: David Rose)
Dolphin Cove Limited is putting a 22-acre beachfront property in Hanover on the market for $18 million (Jamaic $2.79 billion), with the aim of developing a family resort hotel on the land in the wake of disruptions caused by the COVID-19 pandemic.
The destination developer sold a $100,000 ($13.6 million) option in March 2020 to Reserve Investments Limited, a subsidiary of a Spanish-speaking hotel developer, for the right to buy land to be developed into a hotel. The plan was to continue operating a marine park on the site and make it part of the hotel’s services, bringing in more business for the company, which keeps dolphins, birds and other animals on the premises.
But those plans evaporated as the pandemic threw the world into chaos and halted several planned tourism developments, the sector hardest hit by the global crisis. As a result, Dolphin Cove owned the land after Reserve Investments did not pay the additional $100,000 to extend the option for another year. Thus, the company, Dolphin Cove (Negril) Limited, kept the land and Dolphin Cove Montego Bay, the name given to Lucy’s attraction, continued to operate as usual.
“Our plan is to develop a family resort on this land. We bought the land on the cheap many years ago and we had actually received a letter from NEPA (National Environmental Planning Agency) and were the first to give permission to build an eight-storey, 850-room building. We’ve been down the road with NEPA so we have a head start in that respect. So as far as looking at a new hotel, any new developer can benefit from some of the work that’s been done with the environmental department and the NEPA department,” Dolphin Cove founder and chairman Stafford Burrows said at the company’s annual general meeting at the Courtyard by Marriott Hotel in New Kingston, St Andrew.
The property is currently being advertised on real estate website Coldwell Banker, and Burrows said he would be happy to see interest from an existing hotel chain with a presence in Jamaica. He added that selling the property is not the only consideration and that other arrangements, such as joint ventures, would also be explored, but that Dolphin Cove does not intend to be involved in operating the hotel.
Dolphin Cove currently employs 240 people across four facilities and offers a variety of services, including dolphin interactions, food and gift shopping, and ATV, dune buggy and zipline rides at the Yaman Adventure Park in Ocho Rios, St. Ann. The company has bounced back from the pandemic and public emergency to achieve record consolidated sales of $17.11 million and profit before tax (PBT) of $3.95 million in 2023. This compares to 2017, when it recorded consolidated sales of $16.63 million and profit before tax of $3.94 million.
Dolphin Cove had 153 employees in 2019.
“Rather than closing the facility, we are looking for developers to build around the dolphin habitat. Dolphin Park will remain open to the public, but we will always benefit from significantly increased attendance at our family resort, which will be anchored by Dolphin Park. All of this is good for 2024, 2025 and 2026,” Burrows told shareholders.
Despite several hoteliers lamenting the impact of the US travel advisory in January, Burrows noted that “it had very little impact (on his business). In fact, the impact it had on the country was enormous. We had more tourists arriving than usual. There was no negative impact whatsoever.”
However, he noted that the Dolphin Cove team had to do everything in its power to reroute traffic to the facility following recent damage to the cruise ship pier in Ocho Rios, which the first quarter (Q1) report said will be out of service for at least six months, which forced his team to do additional work to mitigate an estimated $250,000 in lost cruise ship business from 30 canceled cruise ship calls to the Star property in Ocho Rios near Dunn’s River Falls.
Despite the delays in restoring the pier, Burrows is urging officials to consider adding another “finger” to the pier so that the space can accommodate four ships at any one time. He noted that this is crucial when larger ships visit Jamaica, and being able to accommodate six ships between Ocho Rios and Falmouth would make Jamaica a more first-class destination.
“We’ll probably be without a pier for a year. All our guests will be heading to Falmouth and Montego Bay. We still get a lot of people coming from Falmouth. Dunn’s River Falls is one of the most popular spots ever. If you’re going anywhere from Falmouth, you’re going to the Dunn’s River Falls side and we’ll be there. Hopefully the authorities will see the benefit of being able to accommodate more than one boat in Ocho Rios. It will solve a lot of problems,” Burrows added.
Dolphin Cove’s first quarter consolidated revenue increased to $4.9 million from $4.85 million, while gross profit was roughly flat at $4.35 million. Higher operating expenses and a decrease in the accounts receivable impairment provision caused Dolphin Cove’s operating profit to decrease 8% to $1.76 million.
Pre-tax income fell 6% to $1.68 million, while net income fell 12% to $1.38 million, for earnings per share of $0.0035.
Dolphin Cove will also settle a US$113 million (Jamaica $177.64 million) debt relating to 2019 with the Jamaican Tax Authority, to be paid in 10 monthly installments, a process that will commence immediately.
Dolphin Cove’s total assets increased 1% during the quarter to $37.95 million, with non-current assets at $31.38 million and cash and cash equivalents at $2.08 million. Total liabilities and shareholders’ equity were $6.16 million and $31.79 million, respectively.
Dolphin Cove’s shares fell to 23.13 Jamaica dollars on Thursday, but are expected to rise 31% in 2024, giving the company a market capitalization of 9.08 billion Jamaica dollars (US$57.92 million). Dolphin Cove paid a dividend of 0.60 Jamaica dollars on June 21, totaling 235.46 million Jamaica dollars (US$1.5 million). This brings the trailing 12-month dividend to 2.40 Jamaica dollars, raising the dividend yield to 10.38%. Dolphin Cove plans to return to a quarterly dividend schedule not seen since 2017. Dolphin Cove is a 79.99% subsidiary of Mexico-based Dolphin Capital Company S. de RL de CV, and Gonzalo Pacheco Pérez serves as CEO of Dolphin Cove.
