Sandals Resorts International Business Information, Profile, and History

Company Perspectives:

Since 1981, Sandals Resorts has been leading the Caribbean ultra all-inclusive industry by offering guests more amenities, more luxury, more innovations, and more choices than any of its competitors. In an industry category exploding with new contenders, the experience, training, and talent of Sandals' management team and resort staff ensure that the company is well positioned to stay at the forefront of the "all-inclusive" market.

History of Sandals Resorts International

Sandals Resorts International is world-renowned for its luxurious all-inclusive resorts dotting the Caribbean. The company's primary hotel brands are Sandals and Beaches, fittingly named given their location along some of the most sought-after stretches of sand in the world. With more than a dozen properties open or under construction in Jamaica, the Bahamas, St. Lucia, Antigua, and elsewhere, Sandals continues to take its properties to a higher level of service, truly earning the many awards bestowed on its brand of "Ultra All-Inclusive" resorts.

Entrepreneurial Experiments: 1970s-81

Gordon Stewart was born in Kingston, Jamaica, on July 6, 1941. The playground of his youth consisted of stunning stretches of coastline, including the white sand beaches running along the northern coast of Jamaica. As a young man, Stewart began his career in sales for the Dutch-owned Curacoa Trading Company. After working his way up to sales manager, Stewart departed in 1968 to start his own company called Appliance Traders, Ltd.

Appliance Traders was initially formed as a service and distribution company for air conditioners, but soon came to include other cold-air appliances such as refrigerators and freezers. Stewart faced a major challenge when Jamaica's government turned to socialism in 1970, severely restricting the import of goods into the struggling country. The young entrepreneur, however, soon found a way to work within the confines of the government's tightened controls: he segued into manufacturing.

By the dawn of the 1980s the Jamaican government had relaxed some of its strictures and turned its attention to promoting tourism. A government-owned, "all-inclusive" resort opened in Ocho Rios and Appliance Traders won the contract to supply the property's kitchen appliances and air conditioners. By this time, Stewart had crafted an unofficial motto for his business enterprises, always believing "We can do better." In this sense, Stewart decided to outdo the Jamaican government by creating his own all-inclusive resort.

The all-inclusive concept (originated by Club Med) met with high praise by vacationers around the world. Early all-inclusive packages included airfare, accommodations, and meals; as the notion caught on, other items were added such as premium alcoholic beverages, transportation to and from the airport, tips, and as part of Stewart's package, even water sports and activities. Later, some excursions, free transportation to other resorts, massages, and spa treatments were added.

Stewart found a property in Montego Bay called the Bay Roc Hotel. It was old and in desperate need of renovation yet situated directly on one of Montego Bay's loveliest beaches. Stewart believed the coastline alone was worth the price of the hotel and bought the property in 1981. He then turned it into a beautiful all-inclusive resort for couples. Although he had no direct experience in the travel or hospitality industry, Stewart followed a simple philosophy of not only giving clients (in this case, travelers) what they desired but to offer them more than they even expected or thought they might need.

Location, Location, Location: 1981-91

The Bay Roc Hotel was transformed into Sandals Montego Bay over several months with $4 million in refurbishing costs. Sandals Montego Bay was more than just all-inclusive, offering its guests water sports and a host of other extras all for the same price. The resort's rooms were a notch above competitors with upscale furnishings and service, and Sandals was the first Caribbean destination to place Jacuzzis, satellite television, gourmet dining, and swim-up bars at its resorts.

By the end of the 1980s Sandals had become a favored destination for weddings and honeymoons. Many of the company's guests were "repeats" who had visited a resort and come back to stay again at one of the four Jamaican properties (Sandals Montego Bay and Sandals Royal Caribbean in Montego Bay, Sandals Ocho Rios, and Sandals Negril). In actuality, there were five different Sandals hotels--if the smaller, more intimate Carlyle on the Bay was included in the count. The Carlyle was not considered a "resort" because it was not only small (52 rooms) but also because the inn was not a full-service facility like its siblings with several restaurants, bars, pools, and expansive beaches. The hotel, however, was renamed Sandals Inn and renovated over the next few years and included as one of the company's Montego Bay "Stay at One, Play at All" properties.

By 1990 Sandals had married its 1,000th couple and maintained an occupancy rate of more than 90 percent at its four full-service resorts. Funds from this phenomenal occupancy rate fueled expansion and Sandals bought another property to refurbish. Eden II, located in Ocho Rios by the Dunn's River waterfall, was set to undergo $20 million in renovations to become Sandals Dunn's River. Around the same time, Sandals initiated its first television advertising campaign, spending more than $3 million to inform television audiences about the firm's luxurious romantic getaways and to spotlight the "Stay at One, Play at All" concept.

The ad campaign (featuring three separate commercials filmed in Montego Bay, Ocho Rios, and Negril) in late 1990 was not only a first for Sandals, but for Jamaica as well, since no other resort in the country's young tourist trade had ever advertised on international television. With the launch of the Dunn's River resort in April 1991, Sandals not only celebrated ten years in business but reached two impressive milestones: First, of having 1,000 well-appointed rooms available at its resorts; and second, of becoming the Caribbean's largest operator of all-inclusive resorts (its number one rival, SuperClubs, had five).

Sandals ventured off its home turf to open its sixth all-inclusive resort on the Caribbean island of Antigua. The former Divi Anchorage Beach Resort, located on 11.6 acres of coastline at Dickenson Bay, was renovated and trebled in size for its rechristening as Sandals Antigua in July 1991.

Major Expansion: 1992-96

By mid-1992 Stewart had departed from his couples-only caveat by announcing construction of a property for families, to be called "Beaches." Families would be offered the same amenities as couples--several dining establishments, large pools, beachfront activities, as well as babysitting services and family-oriented fun. Beaches, like sibling Sandals resorts, would also be all-inclusive for a no-worry vacation. Another new approach was to build environmentally friendly resorts, working around a property's natural beauty as much as possible. This became particularly important at the Beaches construction site, after several native artifacts were found. According to Travel Weekly, the National Trust, the Institute of Jamaica, and Caribbean Environmental Consulting Services were all involved in the resort's construction to preserve as much of the natural environment as possible.

By 1993 Sandals had bought four new properties (one in Barbados, three in St. Lucia) to renovate and expand as future resorts. Two of the St. Lucia properties were combined to create Sandals St. Lucia, a luxuriously designed resort appealing to honeymooners and couples seeking top-notch, upscale accommodations. Sandals St. Lucia opened in April and the other St. Lucia property, Sandals Inn St. Lucia (later renamed Sandals Halcyon), opened the following year.

In addition to its buying spree Sandals adopted a new marketing concept as the only "Ultra All-Inclusive" resorts in the Caribbean. The new campaign was partially in response to SuperClubs calling itself "Super All-Inclusive" and for Sandals to differentiate itself from the all-inclusive imitators who were not all-inclusive and charged guests for airport transfers, baggage handling, taxes, premium alcoholic drinks, water activities, and other items. With many resorts calling themselves "all-inclusive" without actually embracing the concept, Sandals feared vacationers would think all resorts were the same. While Club Med had created the concept and SuperClubs had introduced it to Jamaica, Sandals believed it had perfected the art of all-inclusives--and set out to prove it one guest at a time.

In 1994 and 1995 Sandals launched a new advertising campaign ("Sandals is for Lovers"), updated and rebuilt Sandals Antigua (damaged by a hurricane), refurbished three of its Jamaican resorts, and worked on the renovation of a recently acquired Barbados property. Sandals Barbados was slated to open in April 1995 but was put on hold after the Barbadian government balked at granting the company incentives similar to those granted to visiting cruise ships. While the Barbados property languished, Sandals Royal Bahamian Resort and Spa debuted in 1996 to much fanfare. Located on Cable Beach on the island of Nassau, the newest Sandals was part of the company's new "Royal" scheme, denoting even more luxurious appointments than other properties. By this time the company had a 40 percent "return" guest rate (repeat customers) with about two-thirds of its overall guests from the United States and the remainder from other countries.

As Sandals awaited results from its "Royal" branding, SuperClubs had launched its "Lido" upgrades in Ocho Rios and Negril, featuring better food, rooms, and spa services. Club Med, the more mature of the three leaders, had started the trend with its "Finest" brand a few years earlier and made plans to renovate several of its less upscale resorts to Finest specifications. Regardless of how a Sandals, Club Med, or SuperClubs resort was titled, they all offered the concept of "worry-free" vacations to travelers willing to spend a little more to receive a lot more in amenities and services.

All-Inclusives for Everyone: 1997-2001

For Butch Stewart, with no experience in the hospitality industry whatsoever, business acumen had paid off in spades. He was not only one of Jamaica's most famous entrepreneurs but by 1997 his holding company, ATL Group, was the country's largest private corporation. Stewart had parlayed his Sandals success in several directions, such as buying into Air Jamaica, the country's primary airline, and turning it around. Stewart was behind the addition of Montego Bay as an Air Jamaica hub, which of course helped bring vacationers to his Sandals resorts.

Milestones in 1997 were the opening of Beaches Negril and Beaches Turks and Caicos. Beaches Sandy Bay (in Negril) opened the following year. Sandals and sister company Beaches were the hottest properties in the Caribbean marketplace. In 1998 came a new marketing campaign to attract more European vacationers to the company's Caribbean resorts. The company also began offering its clients a new travel pledge or "Blue Chip Hurricane Guarantee," to reschedule guests free of charge when hurricanes interrupted travel or forced the closure of any Sandals or Beaches property. Near the end of 1999, Sandals bought another Ocho Rios property called the Plantation Inn, slated to become the new Beaches Royal Plantation--a hybrid of Sandals and Beaches--for adults and kids 16 years and older.

In the new century, Sandals and its rivals experienced a bit of a slowdown as travelers tightened their belts. With the terrorist attacks in the United States on September 11, 2001, travel declined dramatically, impacted by fears of further terrorist activity. Airlines, travel agencies, and the entire hospitality industry suffered significant losses; but amazingly, business picked up at most Sandals resorts within several weeks. As 2001 came to a close, travelers were already returning to the Caribbean.

Travel Making a Comeback: 2002 Onward

In the summer of 2002 the fourth Beaches property, called Beaches Boscobel Resort & Golf Club, was opened in Ocho Rios. Beaches Boscobel became the third family-themed resort in Jamaica, with the other two, Beaches Negril and Beaches Sandy Bay, located several hours away in Negril. Beaches Boscobel was the first Beaches to offer families free golf in addition to its other amenities. Sandals inked a deal with Weddings.com for an online honeymoon registry, while Beaches pitched a "familymoon" concept for parents and kids.

In 2004 Sandals began several ambitious renovation programs, including the merger of two of its properties in Ocho Rios, Sandals Ocho Rios and the Grande Sport Villa Golf Resort & Spa. The new property, reopened in late 2004, was called Sandals Grande Ocho Rios Beach & Villa Resort and had undergone more than $10 million in refurbishing. Major changes were also on the drawing table for Beaches Negril, with the addition of a huge spa facility for adults and a water park for kids. The property's name was changed to Beaches Negril Resort & Spa to reflect these upgrades. Renovations and the addition of a new "Mediterranean Village" also were put in the works for Sandals Antigua, along with the opening of two additional Sandals resorts in Jamaica: Sandals Whitehouse (Westmoreland, opened in late 2004) and Sandals Dragon Bay (Port Antonio, opening in late 2005).

For Sandals, a sunny sky was literally the limit for the luxury resort operator. With more than a dozen popular properties and more due to open in the near future, the Sandals name had become synonymous with all-inclusive luxury. According to an April 2004 Zagat's survey of the best international hotels, resorts, and spas there were only three factors to which travelers paid attention when scheduling their plans: 35 percent said the fluctuating economy influenced whether or how much they would travel, while 17 percent had some concerns over terrorism or SARS. Since neither terrorism nor SARS had much impact on the Caribbean isles Sandals called home, travelers apparently ignored their economic fears and continued to come to paradise for a Sandals-styled respite.

Principal Competitors: Allegro Resorts; Club Méditerranée S.A. (Club Med); SuperClubs International; Hilton Hotels; Holiday Inn Sunspree Resorts; Sunscape Resorts.

Chronology

• Key Dates:
• 1981: Gordon "Butch" Stewart renovates the Bay Roc hotel in Jamaica and renames it Sandals Montego Bay.
• 1982: Sandals receives good press from a Montego Bay newspaper and a second hotel is acquired in the area.
• 1986: Sandals unveils the "Stay at One, Play at Two" concept with Sandals Montego Bay and Sandals Royal Caribbean.
• 1988: Sandals Negril opens along the Seven Mile Beach in Jamaica.
• 1989: Another resort is opened, Sandals Ocho Rios, a few hours from Montego Bay.
• 1991: Sandals Dunn's River resort, also in Ocho Rios, opens for business.
• 1992: Sandals buys the Upton Golf Course in Ocho Rios and offers golf to its resort guests.
• 1993: A new resort in St. Lucia debuts.
• 1994: Sandals launches wedding packages and a second St. Lucia resort, Sandals Halcyon, opens its doors.
• 1996: Sandals Royal Bahamian Resort & Spa opens in Nassau, the Bahamas.
• 1997: The first "Beaches" resort in Negril is opened.
• 2000: Beaches Grande Sport opens in Ocho Rios.
• 2002: Two additional resorts open, a Beaches in Ocho Rios and another Sandals in St. Lucia.
• 2004: Sandals combines two Ocho Rios properties while sibling company Beaches adds a spa and water park to its Negril property.