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llegiant Air appears to be exiting the real estate development business for good. The airline has been under contract to sell its Sunseeker Resort in Port Charlotte, FL to Blackstone Real Estate for $200 MM after spending over 6 years and more than $700 MM on the project. Sunseeker was a 785-room resort that opened in December 2023 but lost over $25 MM during its first year of operation.

    Allegiant had envisioned Sunseeker as a key attraction to lure customers onto its aircraft and sell them vacation packages, but it was developed at significant cost in time, capital, and opportunity. The project's lengthy delays, inflation, and supply chain issues increased the cost by over $200 MM above the original budget of ~$500 MM.

    Allegiant had also ventured into real estate projects beyond Sunseeker, including leasing vacant Big Box retail space to convert into family entertainment centers (FECs). The airline opened two FECs in Utah and Michigan but ultimately exited the business after closing its operations in March 2020 due to the COVID pandemic. Allegiant sold one of the FEC sites and took a loss on another.

    The airline's current leadership is unlikely to pursue other non-core real estate acquisitions or new ground-up development projects, as the airline business is tough enough. The sale of Sunseeker marks Allegiant's exit from the real estate development business, bringing an end to its ambitious but costly ventures in this area.