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Last week, it was announced that Royal Caribbean Cruise would acquire a 50 per cent equity stake in Sandals Resorts for US$3 billion.

The news drew plenty of local and international media attention and will redefine tourism in the Caribbean.

Sandals was founded by Gordon “ Butch” Stewart and began operations in 1981. At that time, many fled from the tourism industry, with many business leaders, politicians and those looking on of the view that Butch, with no experience in the hospitality industry, could not run a small hotel in Montego Bay and make it a success.

Almost 45 years later, the rest is history. Sandals is a globally recognised brand employing around 20,000 people across the Caribbean. Butch proved the doubters wrong with the mantra to exceed expectations and deliver stellar service.

Sandals has gone on to become the most successful Caribbean brand and the leading indigenous hotel group in the region with 20 resorts in 10 countries. 

Butch Stewart is recognised as a legendary business personality, and what he was able to build stands as a testament to what can be accomplished in Jamaica and the wider Caribbean.

He died at the age of 79 in 2021, leaving an incredible legacy. He was succeeded by his son Adam Stewart, who was named Executive Chairman. Adam began working with his father 25 years ago, holding a number of senior positions and was appointed Group CEO in 2007. 

The last five years have been a tumultuous time for Adam Stewart. He lost his father, then his wife Jill to cancer, all while recently taking over the reins of both Sandals and the ATL Group.

Given that fate, some would be overwhelmed, done in by both the emotional and psychological strain. Perhaps they would have retreated into the carapace of their sorrow.

Adam Stewart bore it all with a smile and a stiff upper lip. There were many watching, looking for signs of fragility-he gave nothing away. He kept calm and carried on.

He was gracious to those who expressed condolences and offered their support. It’s only when you are truly up against it that you see who your true friends are, who will stand beside you when the night is at its darkest, and you are standing guard. 

There were those both in the family and in the company who challenged his leadership, proclaiming him unfit to take over from his father. They were quick to portend the demise of a great brand.

Lawyers who were once loyal to his father turned on him, discredited him, and attacked him with the viciousness of a spitting cobra.

He took the slings and arrows, went into defensive mode to fend off those who sensed an opening. He remained steadfast.

Those who worked at the Group must have been in trepidation. What did the future hold? Would it all come tumbling down? Adam Stewart had to ensure that almost 20,000 staff members that their welfare was not in jeopardy while pressing ahead, building upon what his father had left behind.

Adam Stewart must have had his moments when he asked himself, who can I trust? Who is going to plunge the knife in my back? Who is smiling at me but wishes me ill will? All those people who avidly said they were his father’s friends, would they be his friends? Could he count on them?  Whom should he watch out for? Where were his allies?

If he had gone dark, morose, malevolent, he could be forgiven for doing so. But he didn’t. He rolled up his sleeves and took the “Dunkirk” spirit route.

Butch Stewart knew his own mind and relied heavily on his instinct. He could “suss” people out, and he was rarely wrong. It was a key factor in his success. 

He had decades of experience with this – Adam didn’t.

Yes, he must have grieved; he may have wondered, what now? But he pressed on. He remained at the bow, steering the ship despite those questioning his captaincy.

Now he has navigated the ship not into squalls and treacherous rocks but into a place of azure skies and calm waters. Now all on board are vigorously clapping and patting each other on the back. Some of the officers have come on deck with a grog or two of rum for the captain who proved his prowess. 

The Sandals/Royal Caribbean Cruise deal is the biggest yet in the English-speaking Caribbean, and it was crafted by Adam Stewart. It will elevate Sandals into a much stronger financial entity and will speed up further expansion of the chain. Land-based hotels and cruise shipping are the linchpins of Caribbean tourism, and now together, this deal makes Sandals/Royal Caribbean a major force across the entire Caribbean, not just the English-speaking Caribbean.

Sandals was valued at US$6 billion, but Our Today understands that, with the financial add-ons, the valuation is closer to US$7 billion. 

When Butch Stewart was looking for a vehicle to earn foreign exchange and bought the Carlyle Hotel, could he have foreseen that his son would preside over a US$7 billion Caribbean hotel leader decades later? 

A world-class operator like Royal Caribbean, which has a market cap of US$70 billion, saw the value in Sandals and decided that together they could be a tourism behemoth

This is a story of a small acorn growing into a huge oak tree. 

What Adam Stewart pulled off sees Sandals now valued at more than Scotia Group Jamaica, NCB and Grace Kennedy combined. This is an incredible achievement by a company started by Butch Stewart 45 years ago, now run by his son, who worked beside him.

Adam Stewart has in effect sent the doubters into retreat. They had so many things to say but must now give credit where it is due.

This deal was over two years in the making.  It demonstrates that the Caribbean can stand on the world stage with investment-grade corporations. Sandals was subjected to extraordinary diligence scrutiny and asked an inexhaustible number of questions. Its books were gone over again, again and again. It stood up to the scrutiny; it was evaluated as world-class.

Here is a lesson for the younger generation of Jamaican business leaders, many of whom are unable to pass muster, fail at the scrutiny level and cannot seem to submit timely audit reports. You can’t be seen driving around in Porsches and proclaiming you are a “Top G” when the paperwork shows you are failing and just can’t cut it. You cannot fake the funk.

Adam Stewart is in their generation but passed the test after a rigorous examination. That is a salient lesson from this deal for the business community in Jamaica. 

For those who said that Sandals was a mess and its prospects look bleak under Adam Stewart, they were wrong and by a long way. Companies like the world’s second-largest cruise line company do not acquire duds and cosmetically constructed companies.

The islands where Sandals has a presence will now become stronger destinations. Royal Caribbean cruise ship passengers can now stay at Sandals. People can now book a Sandals/ Royal Caribbean vacation, thus combining a land-based and sea experience. This is a quantum leap in tourism, so much so that Jamaica’s Minister of Tourism, Ed Bartlett, is keen to find out what Jamaica can get out of this deal. How can it benefit and reap more money? Some may say, well, you can start by forgoing the proposed increased GCT to 15 per cent on the sector. 

The Executive Chairman of Sandals Resorts has said that this partnership with Royal Caribbean may very well see the brand now go beyond the Caribbean. In years past, Butch Stewart received many offers to take Sandals to other parts of the world- Russia, Alaska, the Middle East- but he was not too enthused. He once said, “ If I can’t get to any of my hotels within three hours, I’m not interested”. That was him talking as a Caribbean player. Now his son Adam has made Sandals a world player. Sandals’ heritage and DNA will always be Caribbean. It will not lose its core values- Adam Stewart will see to that.

Now it can compete in larger Caribbean markets. Costa Rica, Dominican Republic, and Mexico are now all on the radar.  It now has the muscle to go into new destinations and scale at a faster rate. 

“Sandals will remain Sandals and Beaches will remain Beaches. This partnership provides greater opportunities to members of the Sandals Resorts family across the Caribbean. We are a family of thousands, and it will get bigger now. They now have the option to remain land-based or work on the cruise ship. I think many will bring excellence to Royal Caribbean’s operations on the sea,” said Adam Stewart.

Sandals 2.0 sees the Group redefining itself with a commitment to innovation and greater sophistication. Sandals will never be a sterile concrete block offering all-inclusive resort services. Many will look to replicate Sandals’ success in the  Caribbean with 1000 room structures that have shared logistics and suppliers from abroad. But they will not have Sandals’ secret sauce. The accountants and auditors will look to extract more revenue, but the quality of the product is what should be its unique selling proposition.

Adam Stewart is going with a high-quality build, larger rooms, as he has done in St. Vincent. He doesn’t want the cost of building new hotels to hamper operations.

In the first ten years, Butch Stewart grew Sandals at an astonishing rate with six hotels ( 1981-Sandals Resorts Beach Club,  1986-Sandals Resorts Royal Caribbean, 1988-Sandals Negril, 1989-Sandals Ocho Rios, 1991-Sandals Dunns River,1991-Sandals Antigua).

In his first five years at the helm, Adam Stewart has built four new hotels and renovated a further eight, with three now under construction. He has been busy. Sandals has an EBITDA north of US$600 million a year.  When Butch Stewart was the boss, the Group had a suspected EBITDA of US$370 million.

Since Adam succeeded his father, the Group has spent around US$1 billion on the hotel side and over US$100 million on the ATL businesses. 

The partnership with Royal Caribbean Cruise has nothing to do with the ATL Group, which is also headed by Adam Stewart. He has plans to grow the company his father started back in 1968 and is excited by what is to come for the companies within it. Already, ATL Automotive has 12 car brands in 23 countries.