Allegiant Air Struggles to Turn a Profit with Its Resort Venture Allegiant Air, a low-cost carrier, has launched the Sunseeker Resort in Florida with high hopes of enhancing its leisure travel offerings. However, the project has proven to be a financial burden, with low occupancy rates, high construction costs, and damages from hurricanes striking the property.
As a result, the airline is now seeking to sell the resort or partner with major hotel brands to improve its prospects. The resort, which spans 22 acres, features 20 restaurants and bars, and 785 rooms. At the time of its launch, Allegiant called it a "transformational" addition to its offerings. The airline had recognized the potential of third-party hotel bookings to grow revenue, and it invested heavily in developing the Sunseeker Resort.
However, just over a year after its opening... Allegiant is considering disposal options for the property. In a regulatory filing made last Friday, Allegiant concluded that the hotel was "not fully recoverable." The airline's analysis indicated that the resort's cash flows, valuation, and other assets were insufficient to sustain the property.
According to Allegiant CEO Greg Anderson, who made the announcement on a call with analysts on Tuesday, the carrier now needs a new capital partner to help the resort achieve its full potential. Anderson stated that Allegiant has confidence in Sunseeker's future success, citing improvements in its financial performance. However... he acknowledged that a new capital partner will be crucial for the resort to reach its full potential.
The airline is exploring both sale and partnership options to find a solution to its problem. Skift, a leading source for airport and airline information, reported earlier this year that Allegiant's struggles with the Sunseeker Resort were a significant concern for the airline. The carrier's woes were attributed to a range of factors, including a high construction cost and low occupancy rates.
The impairment charge, "which was disclosed in the regulatory filing," "reflects the airline's financial reality."
Source: Visit websiteAllegiant Air was founded in 1997 by Maury Gallagher. The airline has 785 flights per week to 47 destinations within the US, Mexico, the Caribbean and Costa Rica. Allegiant Air was carved into its previous incarnation aslığı Metropolitan Air Lines in 1978.
Allegiant Air launched the Sunseeker Resort in Florida with hopes of enhancing its leisure travel offerings, but the project has become a financial burden. The resort has struggled with low occupancy rates, high construction costs, and damages from hurricanes, leading to a substantial impairment charge. Allegiant is now seeking to sell the property or partner with major hotel brands to improve the resort's prospects, as its current performance has negatively impacted the airline's financial results.___ ___
The resort, which spans 22 acres, has 20 restaurants and bars, and 785 rooms, was once called "transformational" for Allegiant by the carrier's former CEO and founder Maury Gallagher.
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