Allegiant sells Florida resort for $200M after pandemic delays, hurricane setbacks

Allegiant Air’s parent company is selling its Florida resort less than two years after it opened the property, following setbacks from the pandemic and hurricanes and steep financial losses.

Las Vegas-based Allegiant Travel Co. announced Monday that it reached a deal to sell Sunseeker Resort Charlotte Harbor for $200 million to New York investment giant Blackstone.

The sale, which also includes a related golf course in the area, is expected to close in the third quarter.

Allegiant opened Sunseeker in late 2023, after the company borrowed $350 million almost four years ago to help pay for the project.

All told, the sale marks the conclusion of a side venture that the deep-discount airline initially said would transform the region’s tourism industry, but was ultimately hobbled by a global public health crisis and numerous natural disasters.

‘Significant operating losses’

The 22-acre, 785-room riverfront resort in southwest Florida features food and beverage outlets, two pools, a spa, a fitness center, a rooftop “adult pool and bar” and more than 60,000 square feet of indoor meeting space, according to a news release on the purchase.

Allegiant plans to use the sales proceeds to repay debt and strengthen its balance sheet, CEO Greg Anderson said.

Last year, Allegiant’s Sunseeker Resort business unit posted a $402.7 million loss before income taxes, according to a securities filing. In the first quarter of this year, it booked a $7.7 million loss.

Allegiant has said in securities filings that, as with many new hotels or resorts, Sunseeker’s booking and occupancy rates were lower than more established properties.

Sunseeker incurred “significant operating losses” last year, and occupancy was compromised by three major hurricanes, according to the developer.

“Although we are seeing improvement in recent months, we expect losses to continue in 2025,” Allegiant reported in March, adding it was looking to sell the resort.

‘Fantastic property’

Sunseeker’s buyer is no stranger to Allegiant’s hometown.

Blackstone kicked off a real estate buying spree in Southern Nevada after the mid-2000s bubble burst and spent billions for big-name resorts on the Las Vegas Strip.

Among its transactions: Blackstone acquired the Bellagio’s real estate in 2019 for more than $4 billion from MGM Resorts International and leased it back to the casino giant for an initial annual rent of $245 million.

Blackstone also purchased The Cosmopolitan for $1.73 billion in 2014 and sold the flashy hotel-casino in 2022 for $5.65 billion, saying at the time that this marked the most profitable single-asset sale ever for its real estate business.

Scott Trebilco, senior managing director at Blackstone Real Estate, said Monday that Allegiant built a “fantastic property” and that the new owner looks forward to bringing its “extensive experience with large scale resorts” to Sunseeker.

‘Transform hospitality’

Allegiant, an ultra-low-cost airline, is known for flying from small, underserved cities to warm-weather vacation spots, often without competition on its routes.

It also has a history of ventures outside aviation, including arcades, golf course management software and, as seen with Sunseeker, resort construction.

Allegiant broke ground on Sunseeker in 2019. At the time, the company said the “first-of-its-kind destination resort” was expected to “transform hospitality, dining and tourism in the area.”

It had a captive audience of sorts, as Allegiant was the only commercial carrier that served nearby Punta Gorda Airport, which was also one of its top airports for passenger growth at the time.

However, it suspended construction in March 2020 amid the early chaos of the coronavirus pandemic and resumed building the project more than a year later, in summer 2021.

It obtained a $350 million construction loan for the project in fall 2021.

Hurricanes

Sunseeker was also impacted by hurricanes Ian, Idalia, Debby, Helene and Milton between 2022 and 2024, Allegiant has said.

The resort was built to withstand hurricanes and flooding, but these weather events were “unprecedented in their frequency and the amount of destruction caused” in southwest Florida, according to the developer.

In fall 2022, for instance, Allegiant said the under-construction resort sustained $35 million in damages from Hurricane Ian, after cranes fell on the project and water got in.

In fall 2024, Hurricane Milton made landfall on the west coast of Florida, and Sunseeker was within the evacuation zone, Allegiant said. It temporarily halted operations at the resort and reopened a week later with limited services.

Overall, Allegiant has recorded $87.2 million in hurricane-related losses for Sunseeker and $58.6 million in insurance recoveries, the company indicated in a securities filing this year.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.