Skip to main content
Lee-Collier-Charlotte
Business Observer Wednesday, Nov. 2, 2022 3 weeks ago

Resort, already $100M over original price tag, faces $35M in hurricane damages

Share
Allegiant Travel Co. discloses the cost of financial damage to the Port Charlotte resort in an SEC filing.
by: Louis Llovio Commercial Real Estate Editor

Damage to the Sunseeker Resort Charlotte Harbor Resort from Hurricane Ian will cost Allegiant Travel Co. about $35 million, according to the company’s latest earnings report.

In the report, released Wednesday afternoon Nov. 2, Las Vegas-based Allegiant says it lost $56.2 million in income in the third quarter before taxes due in large part to the one-time charge brought on by the property damage from the storm.

The news isn’t all bad. The company says in the report that “insurance recoveries will offset the special charge in subsequent quarters when recoveries can be estimated and are approved for payment.”

The company did not provide further detail on what damage was done but in late October said it was severe enough to stop construction for a couple of weeks and delay the opening of the $618 million Port Charlotte resort by at least six months.

In the October announcement, the company said construction had restarted on a pool deck and pool and that five cranes used on the project were being replaced.

The delay was the second for Allegiant which was forced to close for 17 months beginning March 2020 due to COVID restrictions.

What will be interesting to see is in the coming days, weeks and months is how investors respond to the $35 million damage assessment for a project that has already been delayed twice and seen its price tag skyrocket more than $100 million from the original estimate of $510 million. At the close of business Nov. 2, the company’s stock price was down 4.2% to $72.22 for the day. At 5:13 p.m., it was down another 3.07% to $70 in after-hours trading.

The earnings report was released at 4 p.m.

Allegiant CEO John Redmond said of the storm in the earnings report that “the team swiftly came together to reposition aircraft, secure the operation, re-accommodate customers and secure the property at Sunseeker Resort.

“As a result, we safely navigated the event and returned operations to normal as quickly as possible. Although we do expect a headwind to revenue resulting from Hurricane Ian during the fourth quarter, the impact was minimized due to the efforts of our team.”

When it is complete, Sunseeker is expected to have 785 rooms, two pools, a spa and salon, an adults-only rooftop retreat, 60,000 square feet of meeting space, a harbor walk and an 18-hole golf course.

Included in the room mix will be 189 luxury one- to three-bedroom suites that will range in size from 875 square feet to 1,700 square feet and come with chef-level kitchens, private balconies and separate check-in, services and private lounges. The company calls this hotel-within-a-hotel concept Sunsuites.

Allegiant also announced in the earnings report that it had donated $100,000 to the American Red Cross for post-Ian disaster relief. 

Related Stories

Advertisement