MIAMI/MONTEGO BAY--Royal Caribbean Group is making one of the biggest moves yet by a cruise company into land-based Caribbean tourism, agreeing to invest approximately US$3 billion for a 50% stake in Sandals and Beaches Resorts.
The agreement, announced Wednesday, September 23, will create a joint venture combining Royal Caribbean Group’s cruise and destination portfolio with one of the Caribbean’s best-known all-inclusive resort companies. The transaction implies a valuation of approximately US$6 billion for Sandals and Beaches Resorts and is expected to close in early 2027, subject to customary regulatory approvals and closing conditions.
The deal brings together two companies with extensive operations across the Caribbean tourism industry. Royal Caribbean Group operates the Royal Caribbean, Celebrity Cruises and Silversea brands, along with private destinations and a developing river cruise operation, while Sandals and Beaches have built a large network of all-inclusive properties across Caribbean destinations including Jamaica, The Bahamas, St. Lucia, Barbados, Grenada, Antigua, Curaçao and Turks and Caicos.
Under the agreement, Royal Caribbean will acquire an equity interest in the resort company for approximately $3 billion. The companies said the investment represents a forward EBITDA multiple of approximately 10 times. Royal Caribbean has secured committed debt financing from Morgan Stanley to finance the transaction.
The partnership represents Royal Caribbean Group’s first major move into the traditional all-inclusive resort sector at this scale and broadens a strategy that has increasingly expanded the company beyond conventional cruise vacations.
Royal Caribbean has already been investing heavily in private destinations and land-based experiences, including Perfect Day at CocoCay in The Bahamas and its Royal Beach Club concept. The Sandals transaction would give the company an established Caribbean resort platform rather than requiring it to build a new hotel brand from the ground up.
The Stewart family, which built Sandals into one of the Caribbean’s leading resort companies, will remain involved following completion of the transaction.
Adam Stewart will continue as Executive Chairman of Sandals and Beaches Resorts and will share leadership of the joint venture’s board with Royal Caribbean Group Chairman and CEO Jason Liberty.
The companies said existing Sandals and Beaches reservations, resort operations and loyalty programs will continue as usual. Royal Caribbean’s cruise operations and loyalty arrangements will also remain unchanged for the time being.
The partnership will, however, explore opportunities to expand distribution, increase guest engagement and make it easier for travelers to discover vacation products across the companies’ respective portfolios. That could eventually create opportunities to more closely connect cruises, resort stays, private destinations and other vacation experiences.
Royal Caribbean said the agreement forms part of its effort to participate more broadly in the global vacation market, which the company estimates at approximately $2 trillion.
For Sandals and Beaches, the investment is expected to provide additional capital and resources to support expansion of the resort portfolio and meet demand for the brands in existing and potentially new destinations.
The transaction is significant for the Caribbean because it combines two companies with major influence over different parts of the region’s tourism industry.
Royal Caribbean brings millions of cruise passengers into Caribbean destinations every year, while Sandals has spent more than four decades building an all-inclusive resort business centered heavily on Caribbean islands.
Royal Caribbean Group currently operates 71 ships sailing to more than 1,000 destinations across all seven continents through its wholly owned cruise brands and its interest in TUI Cruises.
Travel Agent Central described the Sandals transaction as the largest acquisition in Royal Caribbean’s history and noted that the company’s last comparable expansion occurred in 2018, when it acquired a majority interest in luxury cruise line Silversea for approximately $1 billion before later acquiring the remainder.
The Sandals investment goes considerably further because it moves Royal Caribbean beyond another cruise brand and directly into the all-inclusive hotel sector.
It could also create a much broader vacation network through which travelers could eventually move between Royal Caribbean cruises, private destinations and Sandals or Beaches resorts.
Both companies also maintain significant relationships with travel advisors. Sandals has long relied on its Certified Sandals Specialist network, while Royal Caribbean continues to generate a substantial portion of its cruise business through travel agencies. Existing arrangements with travel advisors will continue following completion of the transaction.
The transaction remains subject to regulatory approvals and other customary closing conditions and is expected to be completed in early 2027.
Royal Caribbean said it expects the investment to contribute positively to earnings beginning next year.
Photo: Jason Liberty, Chairman and CEO of Royal Caribbean Group, and Adam Stewart, Executive Chairman of Sandals Resorts, mark the signing of an agreement (Photo Credit: Royal Caribbean)
