The Ardent Leisure Group Ltd (ASX: ALG) share price is sliding today despite announcing plans to redevelop its Dreamworld Resort.
At the time of writing, the entertainment company's shares are fetching for 79 cents, down 1.25%.
Dreamworld eyes comeback
Ardent Leisure shares have failed to take off as investors shrug off the company's $75 million injection into Dreamworld Resort.
According to this morning's release, Ardent Leisure advised it has entered into a non-binding agreement with accommodation developer, Evolution Group.
A family-run company, Evolution Group has built over 2,200 rooms around Australia through resorts and also accommodation houses.
The deal will see Evolution Group build an accommodation precinct on part of the unused land owned by Ardent Leisure. The area is conveniently situated adjacent to the Dreamworld theme park.
The accommodation will consist of a 4-star 250 room resort-style hotel, 40 bungalows, and a 5-star tourist park with 100 powered sites.
Ardent Leisure stated that the new facilities will be designed to cater for all guests, especially interstate travellers.
Within the complex, visitors will have access to family accommodation options, restaurants, conference rooms, swimming pools, and a gymnasium.
The agreement is subject to a number of customary preconditions to be met before works begin.
Comments from management
Dreamworld CEO, Greg Young welcomed the new partnership, saying:
The hotel and tourist park will complement Dreamworld as a premium entertainment destination and add a new level of convenience for guests who will have our theme park and water park on their accommodation's doorstep.
This announcement is another positive step in the recovery of our parks post-COVID and will have a significant economic impact not only for Dreamworld, but also for the northern Gold Coast, one of Australia's fastest growing regional corridors.
Evolution Group, John Robinson Jr went on to add:
We are incredibly excited to be taking these first steps with the Dreamworld team and we are looking forward to work collaboratively to deliver guests a range of high-quality accommodation options.
Ardent Leisure share price review
Ardent Leisure shares have performed relatively well over the last 12 months, gaining more than 130%. This is a stark contrast from when the company faced uncertain troubles at the height of the COVID-19 pandemic.
Based on today's share price, Ardent Leisure presides a market capitalisation of roughly $383 million, with 479 million shares outstanding.
