Resort, already $100 million over original price, faces $35 million in hurricane damage | Business Observer

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

In the report, released Wednesday afternoon (November 2), Las Vegas-based Allegiant said it lost $56.2 million in third-quarter pretax revenue, largely due to one-time charges for property damage caused by the storm.

The news is not 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 approved for payment.”

The company did not provide further details of the damage caused, but in late October said it was severe enough to halt construction for a few weeks and delay the resort’s opening by at least six months. of $618 million from Port Charlotte.

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

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

What will be interesting to see is in the days, weeks and months ahead is how investors react to the $35 million damage assessment for a project that has already been delayed twice and has saw its price skyrocket over $100 million from the original estimate of $510. million. At the close of business on November 2, the company share price was down 4.2% at $72.22 for the day. As of 5:13 p.m., it was down another 3.07% to $70 in after-hours trading.

The report on the results was released at 4 p.m.

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

“As a result, we handled the event safely and returned operations to normal as quickly as possible. Although we expected a revenue headwind resulting from Hurricane Ian in the fourth quarter, the impact was minimized thanks to the efforts of our team.

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

The room mix will include 189 one- to three-bedroom luxury suites ranging in size from 875 square feet to 1,700 square feet and will include chef-level kitchens, private balconies and separate check-in, services and private lounges . The company calls this hotel concept a Sunsuites hotel.

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

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