How about a cruise company that’s not just a cruise company… but an entire vacation company? That seems to be a possibility following report that cruise giant Royal Caribbean Group is in discussions to buy land-based vacation company Sandals Resorts International.
The possible deal was reported by the Financial Times on Tuesday afternoon. According to the FT, the possible deal values Sandals at $6 billion.
Royal Caribbean Group also owns multiple cruise lines and dozens of ships, including nine of the 10 biggest ships at sea. It also has a number of private destinations such as CocoCay where it hosts passengers for the day.
However, acquiring Sandals would be a different line of business as the cruise company does not have resorts on land.
Sandals Resorts International is the parent of Sandals, which offers 17 different all-inclusive resorts designed for couples around the Caribbean. It also owns the family-oriented Beaches resorts, Fowl Cay in The Bahamas, and Rio Chico in Jamaica.
While the deal is not definite, the report says that it could “be reached in the coming days” though it was said that discussions could still fall through.
There are no details on financing or how much of the company Royal Caribbean could buy. But the Financial Times says that Royal Caribbean would buy a majority stake, and it would be the biggest deal in the cruise line’s history.
At $6 billion, that’s roughly the same value as three of Royal Caribbean’s Icon-class ships.
Should the deal happen, there would be an opportunity for Royal Caribbean to cross-sell resort stays to cruise passengers who are already familiar with the brand. As well, the cruise line certainly has experience in providing vacations, so the possible deal doesn’t feel far-fetched.
Royal Caribbean has made a big push in the past several years to provide more options for private destinations, which it sees as an avenue for growth. This includes a massive planned Perfect Day Mexico location that was scrapped by the Mexican government. Looking at pricing, a stay at Sandals is generally more expensive that your typical cruise.
This “gap” between land-based vacations and cruises is something that cruise companies have looked to narrow for years. It may be a case of “if you can’t beat them, join them.”
