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Business Observer Wednesday, May 4, 2022 4 months ago

Cost of Allegiant's Charlotte Harbor resort jumps again, now topping $600 million

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Allegiant Travel Co. reports cost of massive resort development has risen again, now $100 million more than originally projected.
by: Louis Llovio Commercial Real Estate Editor

The price to build the Sunseeker Resort Charlotte Harbor has gone up — again.

After saying earlier this year the price tag for the resort had risen to $585 million, Allegiant Travel Co. disclosed in an Securities and Exchange Commission filing Tuesday afternoon, May 4, that the price tag now stands at $618 million.

The company says in the filing — its first quarter earnings report — that the increase is “primarily due to inflationary pressures on materials as well as supply chain delays.”

The increased cost of building the resort knocks up the originally expected price tag of $510 million by more than $100 million.

According to the filing, the total amount spent on the project as of March 31 is $275 million, with $87 million funded by debt and the remaining $188 million coming from the airline. Capital expenses for the resort in the first quarter were $64 million, 100% of which came from debt, the company says,

But the news wasn’t all bad. In the filing Allegiant, which began accepting bookings for the hotel in March, says that “although (it’s) too early to determine trends, the average daily rate for bookings to date is more than 50% higher than the average daily rate we used in our model.”

Overall, the company reported that its total operating revenue for the quarter was $500.1 million, up 10.7% over a three year period.

The Sunseeker, expected to open in the middle of next year, when complete is expected to have 785 rooms as well as 19 restaurants and bars, two pools, a spa and salon, a 117,000-square-foot “ground level experience,” 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.

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