Sandals Resorts International's Gebhard Rainer on tax dispute, expansion plans

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A leader within the Caribbean all-inclusive vacation space, Sandals Resorts International has expanded into a veritable empire since opening its inaugural Montego Bay, Jamaica, resort in 1981. In late January, however, news broke that the company's 758-room Beaches Turks & Caicos Resort was embroiled in a dispute with the Turks and Caicos government, with the latter alleging Sandals is on the hook for millions in unpaid taxes. Sandals has fired back with a lawsuit against the government, while also announcing that it will be closing the Beaches Turks & Caicos property three times over the next two years, with the third closure in January 2021 set to be indefinite. Hotels editor Christina Jelski recently spoke with Sandals Resorts International CEO Gebhard Rainer to get an update on the situation as well as discuss Sandals' expansion prospects.

Q: Has anything changed in the past few weeks regarding the Beaches Turks & Caicos situation? And should travel advisors and guests be concerned about booking the property?

Gebhard Rainer
Gebhard Rainer

A: We are in continuous discussions, and the situation will evolve. But the closures that we have announced for this year, in September and October, and next year, also in September and October, are really nothing to be too concerned about. You could really label them as seasonal adjustments. Most of the properties in Turks and Caicos are actually closed during that period. Logistically, it really was not a big issue for us, to be honest with you. We have relocated those bookings that were made during those periods without any problem. Any new booking requests that come in for those periods, we redirect to the other Beaches properties we have. For us, the actual period of closure is pretty short, because by the time we close, we're quickly preparing to reopen again. But it allows us to do maintenance and do certain repairs that need to be done. So, it's a little bit of a breathing space, if you will.

Q: Can we expect to see a resolution soon?

A: We should have an update on this in the next couple of months. I believe that it's going to be ironed out. We play a very big role in the business community on Turks and Caicos, contributing to the local economy both directly and indirectly. People think that when you're in an all-inclusive, our guests don't leave the resort. But we actually encourage them to leave and get to know the culture and the place locally as well as to take tours to understand the islands. It's an important part of what we do. And I think the government, they all see it this way, as well. But sometimes, you get into situations where you have to negotiate certain things, and that's where we are right now. But I am very confident that we will find resolutions.

Q: Do you have any expansion plans in the pipeline?

A: We are always on the lookout for opportunities and expansion in markets that we're currently in as well as in new markets. But when it comes to growth, we're very, very selective. Because in the all-inclusive business, location and the uniqueness of a destination is very important, and it's what the success of an operation, at the end of the day, is going to be built on. Also, we don't have enough Beaches properties to fulfill the demand that we currently have on family vacations coming through. So we've actually been looking at developing Beaches locations, and it's an important part of our strategy going forward. Beaches is a hugely successful concept.

Q: The core Sandals brand has, in some ways, become synonymous with weddings and honeymoons. How fast is that part of the business growing, and how have you had to evolve to keep up with changing wedding and honeymoon travel trends?

A: Weddings and honeymoons are a very big part of our business, and it's a part that has been steadily growing. We're the largest wedding provider in the Caribbean, by far. But we've definitely had to constantly adapt to new trends out there, especially since millennials have a different expectation in terms of how they want to execute weddings for themselves. We are adjusting and catering to that. Ten or 15 years ago, a destination wedding had more set expectations, and it was typically something very small, with maybe a few family members. Today, a destination wedding can often be something very big. People fly out 50, 60, 100 or more people. And it is very different. We now offer completely customizable wedding experiences. You can select a unique location and customize the look and feel of it down to the napkin rings, cake decor, etc. That's what our younger wedding couples are really, really enjoying, and that's what does very well.

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