Royal Caribbean Buys Half of Sandals Resorts in $3 Billion Caribbean Bet

Royal Caribbean Group confirmed Wednesday that it will pay roughly $3 billion for a 50% equity stake in Sandals Resorts International, the family-owned Caribbean all-inclusive chain, in a deal that pushes the world's second-largest cruise operator deep into the land-based resort business for the first time. The agreement, disclosed in a securities filing lodged with regulators, ends weeks of speculation that began after a report of the talks briefly rattled Royal Caribbean's stock.

Under the arrangement, Royal Caribbean Group and the Stewart family, which has controlled Sandals since its founding, will each hold half of a new joint venture overseeing Sandals and its family-focused sister brand, Beaches. Adam Stewart, the company's executive chairman and son of founder Gordon "Butch" Stewart, will continue running day-to-day operations alongside Royal Caribbean chairman and chief executive Jason Liberty, who will share leadership of the venture's board.

The numbers

The $3 billion price values Sandals at roughly $6 billion overall, or about ten times its projected earnings before interest, taxes, depreciation and amortization, according to deal terms Royal Caribbean disclosed to the Securities and Exchange Commission. Royal Caribbean said it has lined up committed debt financing from Morgan Stanley to cover the purchase and expects the transaction to add to earnings starting in 2027, when it is also expected to close.

Both sides brought in heavyweight advisers: Sandals worked with BofA Securities and PJT Partners on the financial side and Latham & Watkins and Jones Day on legal matters, while Royal Caribbean used Perella Weinberg Partners and Morgan Stanley for financial advice and Kirkland & Ellis for legal work, according to the company's own newsroom announcement.

How the two companies got here

Royal Caribbean has spent the past several years trying to capture more of what Liberty has called an approximately $2 trillion global vacation market rather than just the portion spent on cruise fares. The company, which operates 71 ships across the Royal Caribbean International, Celebrity Cruises and Silversea brands, already runs private destinations such as Perfect Day at CocoCay in the Bahamas and has been building out land-based offerings piece by piece. The Sandals stake is by far its largest move yet into hotels, a sector cruise lines have historically avoided.

Sandals, for its part, is one of the few globally recognized vacation brands built entirely within the Caribbean. Gordon Stewart opened the first Sandals resort in Montego Bay, Jamaica, in 1981 and grew it into a chain of adults-only, all-inclusive properties spanning eight Caribbean destinations, with the Beaches brand serving families and slated to expand to five locations. Stewart died in 2021, and his son Adam has run the company since, describing Wednesday's deal, in a jointly issued statement, as proof of "how far that vision can go."

Who is affected, and what they are saying

Sandals and Beaches together employ more than 13,000 people across the Caribbean, with the largest concentrations of staff in Jamaica, the Bahamas and Saint Lucia, and both companies say existing reservations, loyalty programs and employment arrangements will continue unchanged through the transition. Royal Caribbean shareholders felt the deal first: the stock swung sharply over the past week, initially falling as much as 5% to 7% when reports of the talks first surfaced amid investor worry about the leverage and integration risk of a major hotel acquisition, according to market coverage of the swings.

Caribbean governments are watching closely as well. In the Bahamas, where Sandals operates the Emerald Bay property in Exuma that closed in 2024 and is being redeveloped into a Beaches resort, Deputy Prime Minister Chester Cooper said in remarks reported from Nassau that he was "hopeful that the additional financial injection for Sandals will accrue positively to the growth and development" of the roughly $100 million Exuma project, calling the tie-up a "cruise-and-stay" opportunity for Royal Caribbean.

Liberty framed the deal as a natural extension of Royal Caribbean's expansion beyond ships, saying the company has been "building a vacation platform that brings joy to millions of people around the world" and calling the partnership with Sandals "an important next step on that journey." Stewart, in turn, said the agreement would let Sandals "grow faster with a partner that shares our values of exceptional hospitality, long-term investment, and the power of enduring brands," adding that "the future has never been brighter."

Not everyone in the region is convinced a cruise operator belongs in the hotel business. Dionisio D'Aguilar, a former Bahamian tourism minister, questioned the logic of the acquisition in comments to a Nassau newspaper, pointing to the industry's mixed record running hotels.

"I'm a little surprised they've lurched out of their core business. History demonstrates that cruise companies are really not good at running hotels," D'Aguilar said, adding that it would be "very, very important" for Adam Stewart to remain in control of Sandals day to day.

Wall Street's reaction shifted once the deal was formally confirmed. Royal Caribbean shares climbed nearly 4% on Thursday, their best single-session gain in two months, after JPMorgan raised its price target on the stock to $394 from $345 while keeping an overweight rating, and after Citi Research's James Hardiman placed Royal Caribbean on a 90-day positive catalyst watch, arguing that "the true value lies in what Sandals brings to Royal Caribbean's broader network," according to an alert tracking the analyst moves. Even with Thursday's rally, the stock remains down about 16% for the year, while shares of rivals Carnival and Norwegian Cruise Line moved far less on the news.

What happens next

The transaction still requires customary regulatory approvals before it can close, which both companies expect in early 2027. Royal Caribbean has said the acquisition will not disrupt existing Sandals or Beaches bookings, loyalty benefits or resort operations in the interim, and Adam Stewart is expected to keep his title as executive chairman under the new joint-venture structure. Bahamian officials have said they hope the capital injection accelerates the stalled Emerald Bay redevelopment, while analysts will be watching for details on how Royal Caribbean plans to link cruise itineraries with resort stays, the "cruise-and-stay" packaging that both Cooper and company executives have pointed to as the deal's clearest commercial upside. Sandals said in its own release announcing the partnership that it intends to direct additional resources toward future expansion once the venture is in place, without specifying new locations.