Allegiant officials: Deal for Port Charlotte's Sunseeker could be done by summer

In an earnings statement released Feb. 4, Allegiant Travel Co. announced that after a strategic review, it was selling off at least a majority stake in the 750-room Sunseeker Resort Charlotte Harbor.

The news garnered a lot of attention as it spread across the region and country. Why wouldn’t it?

The discount airline had opened the resort just a year earlier. It spent nearly three-quarters of a billion dollars — $720 million — to build it and one former CEO had said the Sunseeker “marked the launch of an unprecedented pairing ­— a world class hospitality brand with an airline at its heart.”

But while news that the company was trying to unload a majority interest was surely interesting, and possibly sensational, it should not have come as a surprise.

The resort, long before it opened, has languished with one delay following after another in the four years after it broke ground. And then when it did open its doors to guests Dec. 15, 2023, its occupancy dragged for most of its first year.

The only time the occupancy rate at Sunseeker cracked 50% in the first 12 months it was in business was the fourth quarter — where it may have been helped by guests escaping back-to-back hurricanes.

Adding to the issues, Allegiant recorded a $321.8 million impairment charge related to Sunseeker in the quarter.

'Competitive process'

Despite the problems, Allegiant President and CEO Gregory Anderson believes there is a future for the resort.

In someone else’s hands, though.

“This unique resort located in a popular state offers excellent amenities and is managed by a highly-skilled team,” he told investors on a Feb. 4 earnings call. “We have great confidence in Sunseeker's future success and have observed material improvements in its financial performance.

“Nonetheless,” he added, “we need to acknowledge that a new capital partner will be important for Sunseeker to achieve its full potential.”

Anderson told investors that the company is already in talks with suitors and has shifted its focus to “advanced due” diligence and discussions.

On the earnings call, Duane Pfennigwerth, senior managing director for equities specializing in airlines and lodging at the investment banking firm Evercore ISI, asked Anderson directly about when the company would be able “to separate yourself from this asset.”

Anderson, understandably, hedged his answer, saying that “we're in a competitive process” and “that we could have this buttoned up by the summer.”

“It's kind of hard to talk about, but I’ll try and give you a little bit as high-level as I think we can hit. And that’s that there's high single-digit number of investors,” Anderson said on the call.

“These are well-made — well-known high-quality investors.”

He went on to say that the interest is promising and that no two deal structures are alike.

Allegiant has said it seeks to sell a majority stake but, in the earnings report, kept the possibility open to a bigger takeover by using the term “at least” as a qualifier.

Double storms

With much of the talk about the sale of the Sunseeker focused on its struggles, others share Anderson’s feeling that the resort has potential and that its struggles can be attributed to a string of bad luck mixed with growing pains.

The thinking in the company and in the local tourism industry is that there is a high potential for the resort as travelers get to know it better and that eventually it will overcome the setbacks of the first year and thrive.

“I think as time goes on, as more people experience it, as more people write about it, as more people talk about it, I think that it's only going to continue to grow,” says Sean Doherty, tourism director at the Punta Gorda/Englewood Beach Visitor & Convention Bureau.

And the numbers may bear that out.

Speaking to the investors Feb. 4, Anderson discussed the seasonality of business at the resort, saying that the first quarter is the strongest followed by the fourth quarter, with the summer being the weakest.

That could help explain at least some of the first year’s struggles.

Allegiant did not set its December opening date until Nov. 22, 2023, less than a month in advance. That could have led to the low occupancy issues in the first quarter given winter and spring resort travelers had likely already booked their trips.

As for the fourth quarter, which ran from Sept. 31 through Dec. 31, the area was hit by two major hurricanes in a matter of a couple of weeks around that time — Helene Sept. 26 and Milton Oct. 9.

While the resort may have benefited from some displaced residents, the reality is it had to deal with cancellations. Sunseeker President Micah Richins told investors in October that about 85% of the business bookings from that time rescheduled many trips into the first quarter of 2025.

Whatever the case, Allegiant, after dealing with all the issues that led Sunseeker to open three years later than expected and $225 million over budget, may soon be out of the resort business.

But as anyone who has followed the Sunseeker closely will tell you, you should probably expect the unexpected.