Sandals Resorts seeks funding for a dozen hotels
New York City – 20 July 2017 –
Sandals Resorts International is looking to Wall Street to help finance as many as a dozen new Caribbean hotels as the luxury resort manager ditches its conservative strategy of building just one project per year and keeping debt right down, Bloomberg reported.
CEO Adam Stewart, who runs Sandals with his father, Gordon “Butch” Stewart, said the closely-held company is not for sale and has no immediate plans to go public, contrary to rumours. Instead, it’s looking beyond the regional Caribbean banks it has traditionally used, to fund the biggest expansion in its history.
“We’re open to taking on more debt to build more than on hotel at a time. We want to build three or four hotels a year,” Stewart said.
The company, which owns and operates 23 resorts across seven Caribbean islands, is in talks with Deutsche Bank and others to raise money as it weighs the new projects, including four hotels it plans to build next year, Stewart said.
While the company does not disclose revenues, Stewart said the company is “very sound,” with a ratio of debt to earnings before interest, tax, depreciation and amortization of less than one.
“The Marriotts, the Hiltons, the Hyatts, institutional capital and private equity, they’re all looking to get a piece of the action in the Caribbean,” he said. “It’s at an inflection point. I expect to see a massive boom in the 2-star or 3-star level of hotels.”
Sandals, the biggest private employer in Jamaica, targets the luxury vacation market. The average daily rate across its portfolio of 6,000 rooms is around US$550, according to Stewart. It’s opening over-the-water suites in Jamaica and St. Lucia, which come with a dedicated butler and around-the-clock service, for as much as US$3,000 a night.
“We’re easily among the most expensive and we’re proud of it,” Stewart said.