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As Hurricane Milton barrels toward the Tampa Bay, Florida, area, budget carrier Allegiant Air (ALGT-1.00%) is facing major disruptions on multiple fronts. Plane-tracking site FlightAware says the company has canceled 63% of its Wednesday flights and 43% of its Thursday ones — plus, the company’s troubled southwest Florida resort has been dealt a string of hurricane-driven blows.
“Hurricane Milton is expected to disrupt the Allegiant flight schedule beginning Tuesday, October 8,” Allegiant said in a travel alert — which is putting it lightly.
The storm, which the National Weather Service projects will make landfall late Wednesday as a Category 5 hurricane with “a large area of destructive storm surge, with highest inundations of 10 ft or greater” and “devastating hurricane-force winds,” has closed airports across the Florida peninsula, including several Allegiant considers its bases.
The company’s most recent annual report said it would have 555 routes as of Feb. 24 of this year. Flights heading to the Floridian cities of Orlando, Tampa/St. Petersburg, Punta Gorda, and Sarasota account for 206 of them, or 37% of Allegiant’s network.
As of Wednesday, all of the airports in those cities — Orlando International Airport, Orlando-Sanford International Airport, Tampa International Airport, St. Pete-Clearwater International Airport, Punta Gorda Airport, and Sarasota-Bradenton International Airport — have shut down or severely curtailed operations in anticipation of Hurricane Milton.
Twenty acres of trouble
Though Allegiant’s primary business is air travel, the company announced in 2017 that it would branch off into the hotel business with Sunseeker, a 20-acre, 785-room resort in Charlotte Harbor, Florida. Allegiant described the hotel this way in its annual report:
Sunseeker is located in one of the premier vacation destinations for the U.S., the west coast of Florida, located within a ten minute drive to our Punta Gorda (PGD) airport, sandwiched between Sarasota/Tampa-St. Pete to the north and Ft. Myers/Naples to the south. This location will serve us well. The property speaks for itself.
The property, which opened in December, is quiet at the moment.
“Due to the expected arrival of Hurricane Milton, we have suspended all hotel operations to ensure the safety of our guests and team members,” the resort said in a recent travel advisory. Cancellation fees for planned stays will be waived through Oct. 11, when the company hopes to resume operations.
Even before the storm, questions swirled about whether Sunseeker was a good idea. The aviation website Simply Flying pondered in May if the resort was the “craziest thing Allegiant Air ever did.” The hotel’s expected $500 million price tag swelled to $750 million. And beyond the supply chain shortages and inflation in the wake of the COVID-19 pandemic the hotel has experienced, this is not the first time that a hurricane has disrupted business at Sunseeker.
Construction was interrupted by storms twice, in 2022 and 2023. The first was Hurricane Ian, which made landfall dead-on as a Category 4 storm. The second was Hurricane Idalia, which struck northwestern Florida as a Category 3 storm but still left its mark in the southwestern part of the state.
“Damage from the storms and other insured events exceeded $78 million,” the company said in its annual report. Much of that will be recouped by insurance, but not all.
Back in July, Allegiant said in its most recent quarterly statement that it expects to lose $25 million on Sunseeker this year, only some of which will be recouped by insurance. That’s a big deal for a company that reported $118 million in net income last year.
The company previously announced a strategic review to “maximize the value” of the resort. That includes the hiring of Prospect Hotel Advisors, the go-to hospitality consultants for Blackstone (BX+1.96%). During the earnings call, analysts peppered Allegiant about how long it would take to throw in the towel on Sunseeker. Then-president Gregory Anderson, who took over as CEO last month, hinted that the answer would be: not long.
“All options are on the table — that includes a sale or a stake sale,” he said. “And I think, down the road, as we think about it, in the not too distant future, an option will be to remove it off of our balance sheet.”
This year’s hurricane season, which the National Weather Service says will be “highly active” thanks to “warmer-than-average sea surface temperatures in the tropical Atlantic Ocean and Caribbean Sea” (and climate change) has nearly two more months to go.