Royal Caribbean Group and Sandals Resorts have signed an agreement to form a partnership in the all-inclusive resort space with a 50 percent investment from Royal Caribbean Group.
The joint venture aims to create new opportunities for continued resort growth while broadening options across Royal Caribbean Group's vacation platform, growing its participation in the approximately $2 trillion global vacation market. The partnership will include Sandals and Beaches' collection of all-inclusive properties across the Caribbean, and the companies expect to “explore opportunities to broaden distribution [and] deepen guest engagement ... across both portfolios,” according to a statement from the companies.
"For nearly 60 years, we've reimagined what a vacation can be, constantly expanding the ways we inspire our guests to explore, connect and create lifelong memories," Jason Liberty, chairman and CEO, Royal Caribbean Group, said in the statement. "We have been building a vacation platform that brings joy to millions of people around the world and creates meaningful relationships that last with our guests. Our partnership with Sandals and Beaches Resorts is an important next step on that journey—bringing together two iconic leading vacation companies to further strengthen and grow one of the most admired resort portfolios in the world. The Stewart family has created powerful and beloved brands, and we are honored to build on that legacy. Together, we see tremendous opportunity to expand the reach of Sandals and Beaches Resorts and continue turning the vacation of a lifetime into a lifetime of vacations."
"My father, Gordon 'Butch' Stewart, founded Sandals Resorts with the belief that a company built in the Caribbean could stand on the world stage alongside the most respected names in hospitality. Today is proof of how far that vision can go," said Adam Stewart, executive chairman of Sandals Resorts and Beaches Resorts. "This partnership is the natural next step in building on that conviction. It gives us the ability to grow faster with a partner that shares our values of exceptional hospitality, long-term investment, and the power of enduring brands. Together, we will introduce more guests to Sandals and Beaches Resorts while creating even more extraordinary experiences for those who have made our resorts part of their lives for decades." Stewart added, "As we continue to grow, we will remain true to what has always defined us: delivering authentic vacations that exceed expectations while creating opportunities for our team members, travel advisor partners and the communities we call home. The future has never been brighter, and I know this moment would make my father incredibly proud."
Terms of the Deal
The joint venture will be governed by a board under the shared leadership of Stewart and Liberty. Stewart will maintain a leadership role in guiding the company's long-term strategic growth as executive chairman of Sandals and Beaches Resorts. Existing reservations, loyalty programs, resort operations and cruise operations will continue as usual.
Under the terms of the agreement, Royal Caribbean Group will acquire a 50 percent equity interest in Sandals and Beaches Resorts for approximately $3 billion, representing a forward 10 times multiple in earnings before interest, taxes, depreciation and amortization. Royal Caribbean Group has secured committed debt financing from Morgan Stanley to fund the investment. The transaction is expected to close in early 2027, subject to customary approvals and closing conditions and is expected to be accretive to earnings next year.
BofA Securities and PJT Partners acted as financial advisors, and Latham & Watkins and Jones Day acted as legal advisors to the Sandals Group. Perella Weinberg Partners and Morgan Stanley acted as financial advisors and Kirkland & Ellis LLP acted as legal advisor to Royal Caribbean Group.