Image: Royal Caribbean International
Royal Caribbean could soon be expanding well beyond cruise ships and private islands.
Royal Caribbean Group is reportedly in advanced talks to acquire a controlling stake in Sandals Resorts International, the company behind the well-known Sandals and Beaches all-inclusive resort brands across the Caribbean.
According to the Financial Times, the proposed transaction could see Royal Caribbean pay around US$3 billion for approximately half of the company, valuing Sandals at more than US$6 billion.
If completed, it would reportedly be the largest acquisition in Royal Caribbean's history.
But there's one important point: the deal isn't done yet.
Neither Royal Caribbean nor Sandals has publicly announced a completed agreement, and reporting indicates that negotiations remain underway.
What is Royal Caribbean reportedly buying?
The proposed transaction would give Royal Caribbean Group a controlling interest in Sandals Resorts International.
Sandals operates its adults-focused all-inclusive resorts across destinations including Jamaica, The Bahamas, Saint Lucia, Grenada, Barbados, Antigua, Curaçao and Turks and Caicos. It also operates the family-focused Beaches brand.
Under the deal currently being discussed, some members of the Stewart family — descendants of Sandals founder Gordon "Butch" Stewart — would reportedly retain an ownership stake.
Royal Caribbean could also receive an option to acquire the remaining shares in the future.
That structure wouldn't be entirely unfamiliar to Royal Caribbean.
The company initially purchased a majority stake in luxury cruise line Silversea before later acquiring the remaining shares and taking full ownership.
Why would a cruise company want Sandals?
Royal Caribbean Group increasingly describes itself as a vacation company, rather than simply a cruise company.
It currently owns Royal Caribbean International, Celebrity Cruises and Silversea, while also holding a 50% interest in TUI Cruises. Across those brands, the group operates 71 ships and is continuing to expand into new types of holidays.
Celebrity Cruises is due to enter the river-cruise market in 2027, while Royal Caribbean has been investing heavily in its own land-based destinations.
Its growing portfolio includes the Perfect Day private destination concept and the Royal Beach Club collection.
Buying into Sandals would take that strategy significantly further by giving Royal Caribbean a major position in the all-inclusive resort market.
It would also give the company another way to sell Caribbean holidays to the enormous customer base it has already built through cruising.
That doesn't necessarily mean we'll suddenly see Royal Caribbean cruise-and-Sandals packages appearing next week. No such plans have been announced.
But the potential crossover between two major Caribbean holiday businesses is fairly obvious.
Sandals has been investing heavily in its resorts
The potential acquisition comes while Sandals itself is investing significantly in its Caribbean properties.
Earlier this year, Sandals announced a US$200 million transformation of three Jamaican resorts — Sandals Montego Bay, Sandals Royal Caribbean and Sandals South Coast.
The redevelopment includes new accommodation, restaurants, pools and other facilities as part of what the company calls its Sandals 2.0 strategy.
Sandals Montego Bay is the company's original flagship resort, dating back more than four decades.
Image: Photo by Meg von Haartman on Unsplash
It would be Royal Caribbean's biggest acquisition
Royal Caribbean has made some sizeable acquisitions before.
In 1997, it acquired Celebrity Cruises, while its more recent expansion into the luxury market came through the acquisition of Silversea.
But the reported Sandals transaction would be considerably larger.
The Financial Times says the deal would value Sandals at more than US$6 billion, with Royal Caribbean potentially spending around US$3 billion for its initial stake.
That scale has already attracted attention from investors, with Royal Caribbean shares falling sharply after reports of the negotiations emerged on Tuesday.
What could it mean for cruisers?
For now, probably nothing.
And that's an important distinction.
There has been no announcement of changes to Royal Caribbean cruises, Crown & Anchor loyalty benefits, Sandals holidays or any combination of the two.
Until a transaction is actually completed — and Royal Caribbean explains what it intends to do with the business — anything along those lines is speculation.
But if the acquisition proceeds, it would put one of the Caribbean's best-known all-inclusive resort operators under the control of one of the world's biggest cruise companies.
Royal Caribbean already brings millions of holidaymakers into the Caribbean each year and is spending heavily on destinations designed to capture a larger part of what passengers spend while they're there.
Sandals would give it access to an entirely different type of Caribbean holiday.
Instead of simply asking travellers which Royal Caribbean ship they want to sail on next, the company could potentially be positioning itself to ask a much broader question:
Cruise or resort?
Either way, Royal Caribbean would have a holiday to sell them.
For now, though, it's one to watch.
Reports suggest an agreement could potentially be reached within days — but until Royal Caribbean or Sandals makes an official announcement, this remains a proposed deal rather than a completed acquisition.
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