Royal Caribbean Group is reportedly closing in on a deal to take control of Sandals Resorts International in a transaction that would value the Caribbean all-inclusive chain at more than $6 billion and give the world’s biggest cruise company its first real foothold on dry land.
The Financial Times first reported the talks Tuesday, citing people familiar with the negotiations who said an agreement could land within days but could also still collapse. If it closes, this would be the biggest check Royal Caribbean has ever written. The target is a portfolio of 20 adults-only Sandals resorts plus the family-focused Beaches brand, scattered across Jamaica, St. Lucia, Barbados, the Bahamas, and other leisure hot spots. The Stewart family, which has run the company since Butch Stewart opened his first Montego Bay property in 1981, would hold onto a slice, with Royal Caribbean in the driver’s seat and a path to buying the rest later, per the FT.
Investors were not thrilled. Royal Caribbean stock dropped about 6% Tuesday afternoon.
But advisors should be paying closer attention. Sandals and Royal Caribbean are two of the most trade-loyal suppliers in the business. Sandals built its brand on agencies, from the Certified Sandals Specialist designation to a sales team that shows up at every consortium conference with a checkbook. Royal Caribbean still routes most of its bookings through the travel trade. Put those two under one roof and an advisor gets a supplier that can cover a honeymoon at Sandals Grande St. Lucian, a multigenerational sailing out of Port Canaveral, and, presumably, a stay-and-sail combo nobody has had to stitch together by hand before.
The flip side is worth watching, too. Royal Caribbean has a loyalty program in Crown & Anchor and an onboard NextCruise operation built to book guests directly for their next trip, and Sandals has its own returning-guest base through Sandals Select Rewards. Whether a combined company pushes those customers toward advisors or around them is the question the trade will want answered.
The play fits a pattern under CEO Jason Liberty. Royal Caribbean has been spending heavily to keep guests inside its ecosystem once they step off the ship, whether at Perfect Day at CocoCay or the Royal Beach Club on Paradise Island, and it has pushed into river cruising and vacation packages. The last time the company went shopping at this scale was 2018, when it took a majority position in Silversea and later absorbed the whole line. Sandals is a bigger swing. This is an established land brand with a fiercely loyal customer base and its own advisor relationships, and it does not need Royal Caribbean’s ships to fill rooms.
It has also been a famously hard company to sell. Stewart shopped it in 2019 to clean up his estate, and the pandemic killed that process. His death in January 2021 opened up a court fight among family members over the trusts that hold much of the business. Bankers were brought back in last year and fielded interest from both strategic buyers and private equity, the FT reported.
Perhaps a cruise line is the buyer that finally closes the deal.
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