Sunseeker Resort sustains $35M in damage

PUNTA GORDA — Sunseeker Resort reported a $56.2 million loss in its third-quarter earnings this week, with nearly half due to Hurricane Ian damage.

The Las Vegas-based travel company's losses include a $35 million "special charge" for property damage at Sunseeker Resort being built by Allegiant Travel Co. along Charlotte Harbor in Port Charlotte. Several cranes and other equipment and parts of the structure at the resort's 24-acre construction site were damaged when Hurricane Ian hit Charlotte County with wind speeds of more than 155 mph in September.

During the Allegiant Travel Company's third quarter 2022 earnings call Wednesday, John Redmond, Allegiant's president and CEO, explained insurance recoveries will offset the "special charge" in the next quarters after payments are made for the millions in damage.

As of Sept. 30, the resort construction's cost is $437 million with $249 million funded by debt and the remainder paid by Allegiant. The third quarter capital expenditures were $88 million for the Sunseeker Resort and $3 million related to other Sunseeker capital expenditures.

Redmond said the fourth quarter should taper capacity a bit from the impacts of Hurricane Ian. He said the fourth quarter should be profitable. Allegiant repaid the $25 million emergency relief loan for Coronavirus Aid, Relief and Economic Security, CARES, Act.

The balance related to future scheduled flights is $367.8 million and the balance related to travel vouchers issued for future use is $62.1 million.

Allegiant Travel shares fell 61% since the beginning of the year. On Wednesday, shares hit $72.57, a decrease of 60% in the last 12 months, according to the Associated Press.

At Allegiant Airlines, bookings for the upcoming holiday season are tracking higher than at this point in 2019, Redmond reported.

"A new trend we are beginning to observe post-COVID is the increase in passengers combining business and leisure trips," he said, adding a recent survey showed a 15% increase in dual travel and 20% higher travel in September than last year.

Allegiant reported 4.3 million passengers so far this year. They rented 364,481 cars at the terminal and 71,205 hotel room stays.

"We completed the quarter with a controllable completion of 99.4% — a significant improvement from the first half of the year," he said during the call. "This was achieved on 17% more scheduled capacity than 2019 … The demand environment remained strong throughout the quarter, resulting in a total operating revenue increase of more than 28% as compared with 2019."

Allegiant reported the total operating revenue for the third quarter was $560.3 million, up 28.4% year over the last three years. The total average fare of $125.95 is up 15.5% from the third quarter of 2019. The total available liquidity at Sept. 30, is $1.2 billion, which includes $1 billion in cash and investments, and $225 million in undrawn revolving credit facilities. The total debt as of Sept. 30, is $2 billion.

Third quarter capital expenditures of $84 million, which includes $46 million for aircraft pre-delivery deposits, aircraft induction costs, and other related costs, and $38 million in other airline capital expenditures. Third quarter deferred heavy maintenance cost was $12.3 million.

Allegiant reported 2022 capital expenditures at $325 million, which includes $195 million for aircraft purchases and pre-delivery deposits, and other related costs, and $130 million in other airline capital expenditures.

The company acquired 38,000 new Allways Allegiant World Mastercard holders during the quarter, which was the strongest third quarter acquisition since the program's inception. The airline added 1.7 million members to the Allways Rewards program during its first year, he said.

In October, Allegiant was named Newsweek's Top 100 Most Loved Workplaces list for the second consecutive year.

Allegiant donated $100,000 to the American Red Cross for critical disaster relief to communities in the aftermath of Hurricane Ian.