What Allegiant’s Entry into Hospitality World Means to Planners

When discount airline Allegiant Travel Company announced at the end of August that it would be developing a massive hotel/condo resort on Florida’s Gulf Coast, investor sites went wild. One Allegiant Air executive quit. A lot of planners said, hmmm.

Allegiant will continue to pull from the playbooks of Pan American Airways and United Airlines (which at one time owned Hertz, Westin Hotels & Resorts and Hilton Hotels & Resorts hotel chains). The airline known for low airfares already operates a website selling hotel rooms and rental cars. Now the public company says it will spin off Sunseeker Resorts, a real estate company that will develop a 22-acre resort in Port Charlotte, Florida. Plans call for a 75-room hotel, 720 condo units and North America’s largest private-resort swimming pool and marina. It will also include meeting and banquet space, separate meeting rooms and more than 10 signature restaurants and bars.

Deposits are already being taken for luxury condos that could be complete in 2020. But there are some messages now for planners in this development.

1. Florida is hot right now. Sunseeker Resorts’ marketing materials call Florida’s Gulf Coast desired worldwide. Visit Florida estimates that a record 112.4 million people visited the state in 2016. Most stayed more than four nights. Allegiant estimates the project will result in an increase of 300,000 visitors a year to the area and $1 billion in economic impact in a decade.

2. The lowest price ethos might not carry over. Furnished condo units will sell for between $650,000 and $1.1 million for spaces ranging from 830 to 1,550 sq. ft. Exclusive privileges will include access to members-only dining and entertainment, a resident concierge, housekeeping and in-home grocery delivery.

3. The hospitality business might be doing better than the airline industry. Investor sites discussed the benefits of diversifying vs. neglecting core competencies. The announcement called it “an important step in Allegiant’s evolution as a travel company, offering customers more opportunity for leisure experiences.” Deloitte’s Travel and Hospitality Industry Outlook report for 2017 declared the economic fundamentals for consumer spending solid, giving travel companies reason to remain optimistic about demand for all types of trips. In the same report, it said that legacy airlines may face headwinds as new labor deals and rising oil prices put pressure on operating costs.

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