If you love both cruising and all-inclusive beach resorts, Royal Caribbean’s growing partnership with Sandals and Beaches Resorts is worth watching. The cruise company’s 50-50 joint venture with the all-inclusive brands is targeted to close in early 2027, and executives spent much of the October 27 earnings call explaining why they see so much potential in it.

Royal Caribbean Chairman and CEO Jason Liberty said the company projects several hundred million dollars in synergy opportunities over time from the venture. Those gains could come from yield management, connecting the two companies’ loyalty programs, making better use of customer data, and gaining more purchasing scale together. Royal Caribbean does not currently expect to invest beyond its initial $3 billion or take a stake larger than 50 percent, and while the deal is expected to be immediately accretive, its contribution to earnings next year is expected to be immaterial.

For travelers, the most exciting part may be what comes next on the ground. The deal includes more than 1,000 acres of undeveloped Caribbean beachfront, much of it next to existing Sandals and Beaches properties. Most of that land will likely be used to add rooms at current resorts, though there may also be a couple of opportunities for entirely new developments. There are 18 Sandals and Beaches resorts today, with three more already under development. Liberty noted that about one-third of Royal Caribbean customers already take a Caribbean all-inclusive trip as an additional vacation, and the company wants those trips to stay within its family of brands. There is no plan for cruise ships to tender guests to the resorts, and for now the focus is on growing inside the Caribbean, even though executives believe the Sandals brand could eventually work in other parts of the world.

Key takeaways

  • Royal Caribbean’s 50-50 joint venture with Sandals and Beaches Resorts is targeted to close in early 2027, backed by an initial $3 billion investment.
  • The company projects several hundred million dollars in synergy opportunities over time, including connected loyalty programs and purchasing scale.
  • The deal includes more than 1,000 acres of undeveloped Caribbean beachfront, mostly beside existing resorts, likely to be used mainly for added rooms.
  • Sandals and Beaches currently operate 18 resorts, with three more under development.
  • About one-third of Royal Caribbean customers already take Caribbean all-inclusive trips as extra vacations — the market this partnership is built to serve.

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Source: Seatrade Cruise News