Royal Caribbean Slips on $3B Debt-Funded Sandals Deal

Key Moments

Landmark Acquisition for Royal Caribbean

Royal Caribbean has reached an agreement to acquire a 50% stake in Sandals Resorts International for $3bn, according to the Financial Times, assigning the all-inclusive Caribbean resort operator a $6bn enterprise value. The purchase marks the largest transaction in the Miami-based cruise group’s history.

The deal will establish a joint venture that holds Sandals’ portfolio of 20 hotel properties located across Caribbean destinations including St Vincent, St Lucia and Barbados. The Stewart family, which founded and built the business, will retain the remaining 50% interest in the new structure.

Ownership Structure and Governance

Under the terms of the agreement, the Stewart family will continue as co-owners alongside Royal Caribbean, maintaining significant influence over the resort group. Adam Stewart, who assumed the role of executive chair after the death of his father and company founder Gordon “Butch” Stewart in 2021, will share oversight responsibilities with Royal Caribbean’s chief executive Jason Liberty.

Liberty and Stewart will jointly lead the board that will supervise the newly created joint venture, aligning strategic decisions between the cruise operator and the resort group.

Strategic Rationale and Corporate Vision

The transaction follows years of unsuccessful efforts to sell Sandals, a process complicated by Gordon “Butch” Stewart’s death in 2021. His passing triggered family disputes and legal actions involving trusts that held portions of his estate.

Jason Liberty emphasized the strategic importance of the combination for Royal Caribbean’s broader growth plans. He said the partnership represents “an important next step” in the company’s push to develop a more expansive vacation offering, “bringing together two iconic leading vacation companies to further strengthen and grow one of the most admired resort portfolios in the world.”

Sandals and Beaches Brand Positioning

Sandals positions its properties as couples-only retreats, limiting bookings to two guests per room. Alongside the Sandals portfolio, the company also operates Beaches Resorts, a brand centered on family-focused vacations.

Within the region, Sandals is described as employing more people in the Caribbean than any other private-sector employer.

Royal Caribbean’s Broader Expansion Strategy

Royal Caribbean currently runs a fleet of 71 ships and has been moving beyond its traditional cruise-centric model under Liberty’s leadership. In 2018, the company acquired a majority interest in luxury cruise operator Silversea for $1bn, and subsequently went on to take full ownership of that business.

Market Reaction and Valuation

News of the Sandals transaction talks weighed on Royal Caribbean’s share price, with the stock closing down 6.1% on Tuesday. The decline adds to a 17% fall in the shares so far this year. The company’s market capitalization stands at $62bn.

Advisers and Closing Timeline

The parties expect the Sandals transaction to be completed in early 2027. Bank of America and PJT Partners acted as financial advisers to Sandals. Perella Weinberg and Morgan Stanley advised Royal Caribbean on the deal.