Allegiant stops work on $1B Florida resort due to coronavirus

Dive Brief:

Just one year after breaking ground on its $1 billion Charlotte Harbor resort complex in Southwest Florida, Allegiant Travel Co., owner of Allegiant Air, has put a halt to construction of the waterside development. The company confirmed the move to shareholders and analysts in its first quarter 2020 earnings call this month.
The project was expected to take 18 to 24 months to build out, and Allegiant previously said that the first phase of the resort — which included approximately 500 hotel rooms, more than 180 extended-stay suites, conference space, restaurants, bars, retail and a harbor walk — would open this year. Suffolk is the general contractor for the project.
On the earnings call, John Redmond, president of Allegiant, said the company would not put any more money into the Sunseeker resort for the next 18 months. The first phase is expected to cost at least $420 million. Allegiant also put a hold on the renovation of its Kingsway Country Club property in Lake Suzy, Florida.

Dive Insight:

During the company's earnings call, Redmond called COVID-19 "the ultimate hurdle," and that has proven to be the case for other tourism-related construction projects in Florida as well. In fact, getting the state back to pre-coronavirus tourism numbers could take several years, state tourism officials said earlier this month.

A 90% reduction in airline traffic, which translated to a 95% reduction in passengers moving through Orlando International Airport has prompted the Greater Orlando Aviation Authority to consider reducing the scope of its $4.2 billion capital program by chopping approximately $371.5 million of project features from terminal work.

The plan includes building 15 gates instead of 19 in the South Terminal portion of the expansion, as well as reducing the scope of the airside concourse, baggage handling system, the passenger boarding bridge, the ground transportation facility and other planned elements.

Walt Disney World, one of the biggest tourist draws in the state, has also been trimming its capital projects budget. Disney Chief Financial Officer Christine McCarthy said earlier this month that capital outlays of $900 million have been cut from the company's renovation and construction plans for its parks and resorts. All in-progress construction was halted when the company's parks were shut down in March.

At the other end of the Interstate 4 corridor in Tampa, Florida, Port Tampa Bay is dealing with a novel coronavirus-related hit to its cruise line revenue, according to the Tampa Bay Times. Port officials, which said their operating revenue is down 5% because of cruise cancellations, have scrapped plans for a $5 million terminal renovation and will instead settle for a $500,00 roof repair.

Allegiant's decision to suspend work at the Sunseeker project is part of an overall cost-cutting effort to help the airline withstand the repercussions of a drop in air travel due to the COVID-19 pandemic.

Nevertheless, Allegiant spokesperson Hilarie Grey told the Las Vegas Review-Journal that the company has no plans to abandon its sponsorship of the $2 billion Allegiant Stadium, now under construction in Las Vegas. The venue will be home to the Las Vegas Raiders and is scheduled to reach substantial completion in July.