Royal Caribbean Takes 50% Stake in Sandals, Valuing Resorts at US$6.0Bn

• Royal Caribbean Group (RCL) has agreed to acquire a 50% stake in a newly established joint venture controlling Sandals Resorts International for US$3.0Bn, valuing the Caribbean all-inclusive resort operator at US$6.0Bn. The transaction, which represents a forward EBITDA multiple of approximately 10x, is the largest in the cruise operator’s history. Parts of the Stewart family will retain control of the other half of the business.
• The deal adds Sandals’ 20 resorts across the Caribbean to Royal Caribbean’s portfolio, operated under the couples-only Sandals brand and the family-focused Beaches brand, with properties in Jamaica, the Bahamas, Saint Lucia, Grenada, Barbados and St Vincent. The acquisition extends the company’s push into land-based vacations, building on its Perfect Day and Royal Beach Club private destinations and its planned 2027 entry into river cruising, while allowing it to cross-sell holidays on land to its customers.
• The joint venture will be governed by a board under the shared leadership of Jason Liberty, Royal Caribbean’s Chairman and CEO, and Adam Stewart, who will remain Executive Chairman of Sandals and Beaches Resorts. Existing reservations, loyalty programs and resort operations will continue as usual. Royal Caribbean has secured committed debt financing from Morgan Stanley, and the transaction is expected to close in early 2027.
• The agreement caps years of stop-start efforts to sell Sandals, the Caribbean’s largest private employer. Several sale processes over the past decade failed to yield a deal, including an attempt halted by the pandemic, while the death of founder Gordon “Butch” Stewart in 2021 gave rise to family disputes and legal battles over the trusts holding parts of his estate. Sandals engaged bankers last year to run the latest process, which drew interest from both strategic bidders and private equity groups.
• Royal Caribbean’s shares closed down 6.1% following news of the deal and are down 17% year-to-date. Cruise operators are underperforming the wider market for the first time since the pandemic, as the conflict in Iran and regional instability dent demand. In July, Royal Caribbean trimmed its 2026 revenue growth projection to 9% from 10%, citing foreign exchange effects. The company, which operates 71 ships, has a market capitalization of US$62Bn.
• Looking ahead, the joint venture is expected to accelerate the expansion of Sandals and Beaches Resorts to meet global demand, while growing Royal Caribbean’s participation in the approximately US$2 trillion global vacation market as cruise operators seek to capture a larger share of consumers’ overall travel spending. The companies will also explore opportunities to broaden distribution and deepen guest engagement across both portfolios. The transaction is expected to be accretive to Royal Caribbean’s earnings next year, subject to customary approvals and closing conditions.

(Sources: Financial Times, Reuters, Sandals Resorts & NCBCM Research)