Las Vegas-based travel company Allegiant has decided to halt work on a $1bn tourist resort in southwest Florida after suffering losses of $2m a day on its airline as a result of the coronavirus pandemic.
Allegiant began work on its Charlotte Harbour Sunseeker resort last year, but has now decided to close down the site for at least 18 months and may seek new investors.
The company said on its website for the resort: "This action is to ensure the wellbeing of all parties involved with Sunseeker Resorts, including team members, construction workers and future guests … This was not an easy decision, but we are adhering to the latest information and protocols from the world’s leading health experts and government authorities."
Suffolk Construction, the Miami-based contractor for the scheme, will now close the site and remove its cranes.
The resort, which is made up of about 500 hotel rooms and 180 apartments, was to have completed its $420m first phase this year. However, passenger numbers on the company’s Allegiant Air budget carrier fell 97% in April, plunging the company into a $33m first-quarter loss.
Greg Anderson, chief financial officer at Allegiant, told investors on a conference call that the company would not restart work on Charlotte Harbour until it had secured its airline business. "Our number one priority is to ensure survival and long-term success," he said.
As well as halting work on the resort, Allegiant has suspended stock buybacks and dividends, cut executive salaries by 50% and announced pay cuts for 1,100 employees, about a quarter of its workforce.
Image: The 20-acre Florida site for Charlotte Harbour (Allegiant)