PORT CHARLOTTE, Fla. — Allegiant Travel Company announced it is cutting its losses and selling the 785 room Sunseeker Resort on Charlotte Harbor.
The announcement came during the company’s Q4 earnings call on Tuesday, which revealed an impairment charge of $321.8 million, $5.7 million in hurricane damage from Helene and Milton, and a 54% occupancy rate in that time.
Now, according to Allegiant, it plans to sell “at least a majority interest in the resort.”
The resort opened in Dec. 2023, and has reported shaky earnings and occupancy rates ever since. The opening was delayed by COVID and Hurricane Ian, ultimately putting the construction $225 million over budget.
Greg Riehle, with Riehle Hospitality Consulting, said in addition to initial setbacks, the location of the resort and few surrounding amenities likely contributed to the lack of patrons and revenue.
“I believe that's a large part of the problem which is one they obviously can't overcome,” said Riehle. “Having a golf course is a draw and driver, but it's not enough for a 700 plus room hotel, and there’s just not enough around it.”
Despite the location, Riehle said the resort has potential. It is quickly accessible from PGD and RSW, and has plenty of space for conferences and group trips, something Riehle said could be the key to success for the next owner.
“It has a pretty decent size meeting space, which is critically important for group business obviously,” said Riehle. “Group business has a lot of advantages over social business in terms of food and beverage spending as long as the group is captured on the property which it would be here. So, I think that it really should continue to focus on group business and I think that is where it is going to find most of its success.”
But who has the cash, and time to step in and give the resort a chance to grow its customer base? Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management said there are a few options.
“Private equity could do it, there are buckets of money on Wall Street that will look for distressed sales such as this,” said Landsberg. “I believe it to be distressed because Allegiant took a $300 million write off so we know it's not making a lot of money.”
Aside from private equity firms, Landsberg said most likely it will be a hospitality industry giant.
“The realistic option for many is going to be a large multinational type hotel chain that has the operating space that could use a property here and that's in the conference business. Names like Marriott, or Hilton or Hyatt come to mind as somebody who may be able to kick the tires a bit and bring Sunseeker into their fold and not have to make it profitable in a month or a quarter which is what Allegiant had to do.”
According to Allegiant, the company aims to have Sunseeker sold by this summer.
