SWOT-ing Sandals: SRI wants to build multiple hotels in a year

 

A EC$30 million loan was how the Government of St. Vincent and the Grenadines paid for the purchase of Buccament Bay Resort, which it later sold to Sandals Resorts in 2021.

Buccament Bay Resort had not reopened since it was shuttered in December 2016, when its electricity connection was severed because of non-payment.

Sandals Resorts International purchased Buccament after considering increasing the tempo of new hotel development , looking to finance sources such as Bank to secure financing for the projects. The chain is now betting on a better year in 2025, holding a five day marketing conference in 2025 for its sales agents to iron out strategy.

According to Statistica.com, the Travel & Tourism market in the Caribbean is expected to generate a revenue of US$1,241.00m by 2025. The market is projected to grow annually at a rate of 5.29 per cent during 2025-2029, resulting in a market volume of US$1,525.00m by 2029.

Tourism remains in the Caribbean, the largest source of foreign revenue. Growth in the region has attracted private equity and large chains seeking to cash in.

SRI’s newest hotels are located in St. Vincent and the Grenadines and Curaçao, increasing to 18 its properties in the Caribbean.

Back in 2017, CEO Adam Stewart told BloombergPursuits “We want to build three or four hotels a year. We are trying to look for bigger capital to grow. We know exactly what to do and how to do it. But up until now we’ve been restricted by the balance sheet of regional banks.”

Back then, he was looking at a significant expansion of SRIs resort portfolio across seven Caribbean islands.

Sandals at the time was planning to spend close to US $375 million to develop a 580-guestroom Barbados hotel and about $500 million to develop a resort on the island Tobago .

In 2017, according to Bloomberg, Sandals' ADR across its 6,000-guestroom portfolio was approximately $550 with wide variations. The resort has over the-water suites in Jamaica and St. Lucia, which come with a personal butler and around-the-clock service, for US$3,000 per night.

SRI has continually bet on more amenities, more luxury, more innovations, and more choices than any other beach resort with properties also located on coveted beach side property

‘In 2017 there were Sandals and Beaches Resorts on 10 islands across the Caribbean — in Jamaica, Antigua, Saint Lucia, Bahamas, Grenada, Barbados, Curaçao, Turks & Caicos, and Saint Vincent. As of 2023, according to Wikipedia, Sandals had 18 resorts:  of which seven are in Jamaica.

Innovation remains a key marketing tool for the chain. While the Sandals brand features overwater suites at some of their other properties, Saint Vincent and the Grenadines offers the very first two-story options with Vincy Overwater Two-Story Villas.

• Rooms at the resort in the Sandals Luxury level start at US$409 per person, per night
• Club Sandals rooms start at $468 per person, per night
• Butler rooms start at $557 per person, per night
• Vincy Overwater Two-Story Villas start at $1,614 per person, per night.

There are 11 restaurants and 9 bars at the all-inclusive resort.

Sandals Swot analysis

One SWOT analysis of the resort chain , published by MKT (Marketing Experts: SWOT Case Study - Sandals) comments, “They spent a huge amount of capital setting up a new resort in Barbados, only to have it sit there, unoccupied. The government of Barbados does not allow their beaches to be blocked off with fences, and Sandals requires that their guests be kept separate from other people to prevent crime and interlopers. They have been at odds about this issue since 2001 and their fully completed resort there has yet to see its first guest.

They also state, “They need to better position themselves against competition, other luxury resorts, Breezes All-Inclusive Resorts and other popular destinations for honeymoons and families.”

The analysts identified new opportunities as including “opening new resorts in Belize, or Hawaii, and some non-beach areas such as Alaska and Colorado; they could also open resorts in other International settings such as China, Japan, Taiwan, France, Spain, Italy, Greece, Australia, Mexico and Brazil.”

Threats

The analysts identified hurricanes, human resources challenges in the form of employees and crime as the primary threats facing the hotel chain.

“One threat that cannot be controlled is the weather. Hurricanes are bad for business all over the Caribbean. (Also) There are several ethical arenas that need to be understood when dealing with the tourism industry. Crime rates typically increase with the growth and urbanization of an area and growth of mass tourism is often accompanied by increased crime. The presence of a large number of tourists with a lot of money to spend, and often carrying valuables such as cameras and jewelry, increases the attraction for criminals and brings with it activities like robbery and drug dealing.”

For the wider industry in Jamaica, the annual numbers were flat after negative notices issued by the United States to travelers about crime in the island. Jamaica is Sandal’s largest source of revenue.  Rocketreach.co estimates annual revenue at US$4.8 billion for the resort chain.

Photographs: SRI property in Saint Vincent and the Grenadines (above) and Sandals in Curacoa (below).

Caribbean Money Daily

Caribbeanmoney.blogspot.com

Follow us for breaking news

Contact: austanny@yahoo.com/ 1 876 727 3818