Travel enthusiasts dreaming of combining a cruise with an all-inclusive beach holiday just hit the sweet spot. The Royal Caribbean Group has agreed to purchase a 50 percent stake in the Sandals Resorts International for approximately three billion dollars. This deal makes the iconic Caribbean resort brand valued at approximately six billion dollars. By establishing a partnership, which includes a new joint venture, one of the largest cruise companies in the world and one of the most well-known all-inclusive resort operators in the region join together.
Sandalsbrother to the all-inclusive family resorts, Beacheshas long been a popular choice for couples traveling to romantic, adults-only destinations throughout Jamaica Antigua St. Lucia, Barbados, Grenada, and other islands. Nowthrough a new agreement between the cruise line and the hotel chainpairing the associations’ products is an obvious choice to Royal Caribbean, a line known for operating some of the largest ships, with their own private ports of call. With the new alliance, vacations end not at the ships door step, but can go straight to the resort, or take a rum punch from the ship into the best of the Caribbean.
The two companies will also co-lead the JV. The chairman and chief executive officer of Royal Caribbean, Jason Liberty, and the executive chairman of Sandals, Adam Stewart, will lead the co-chair. Stewart would still be in his executive capacity to help run Sandals long-term. The other-half in the ownership would stay with the people related to the founder’s family, and this will help the brand retains its Caribbean ethnicity. The current book-outs, the membership’s programs, and the regular operations in respective resorts and cruises will carry on.
Royal Caribbean is backing the investment with committed debt financing from Morgan Stanley. The company anticipates the deal will complete in early 2027 after normal approval processes and sees positive earnings contributions from the first full year. This valuation equates to approximately 10x forward EBITDA and is a result of Sandals pricing power in the all-inclusive sector.
This is the biggest land grab from the cruise line. For years the cruise industry has been all about ships, private islands and things to do on board a ship. Now players are trying to tap into much more of an entireSpend. By aligning its fleet and destinations with that of the Sandals resorts, Royal Caribbean gets an immediate deck of around twenty properties as well as a blueprint for high-margin, all-inclusive lodging. The deal is also likely to pave the way for quicker expansion for Beaches and Sandals, perhaps well beyond the Caribbean in the future.
For the passenger these advantages might seem fairly immediate. For instance, finish a week sailing on a Royal Caribbean ship then overnight a few nights in a Sandals property using the same loyalty points or special inclusive deal rates. Or start at Beaches and then get into a cruise. The businesses say they aim to develop a grander “lifetime of journey” platform that makes it possible for individuals to come back from different brands and formats.
