Filling Big Sandals
In succeeding an entrepreneurial legend, Adam Stewart assumed control of a world-famous $1 billion resort chain and now oversees 22 properties and 8,000 employees — at the ripe old age of 27.
by Scott Eden
The boy-wonder CEO of Sandals Resorts, promoted to the post nearly two years ago at age 25, says he was not intimidated by the prospect of assuming day-to-day responsibility for an all-inclusive Caribbean resort chain with 8,000 employees, 22 properties, 3.1 million guests per year and nearly $1 billion in annual revenue. His confidence might well stem from his name, Adam Stewart, and the legacy to which that name refers: Adam is the scion of Sandals’s legendary founder, Gordon “Butch” Stewart, who remains chairman and, by all accounts, a firm guiding force. The younger Stewart, though, was born for the job — in 1981, to be exact, the same year his father leveraged the small fortune he had made as a Kingston, Jamaica, air-conditioning entrepreneur to acquire a down-at-the-heels hotel on Montego Bay. Adam Stewart literally grew up with, and in, Sandals. “The organization has always been part of our family,” he says in an accent that suggests a Scottish brogue that’s been jerked with West Indian spices.
“It’s like a living, breathing thing, as cheesy as that sounds.”
One of his earliest chores was stuffing envelopes in the marketing office. At 15, he began working as an activities director at the company’s family-friendly Beaches resort (Sandals itself is couples-only). It wasn’t especially taxing: “Basically,” he says, “they pay you to have fun with the guests.” He also had some less enjoyable responsibilities, such as cleaning rooms and bussing tables. He checked in travelers and carried their luggage. He logged time as a cabana boy.
“It was very much instilled in us from a young age that you work,” says Jaime Stewart, Adam’s sister, who at 29 also holds a high position in the Sandals organization, as managing director of SRI. “Any role you have in this company, you’ll have earned it, and you’re going to have earned it from putting in the time, putting in the hours.”
Her brother echoes the sentiment: “My dad has always operated by the philosophy that he who gets the job done will be put into a position to make decisions.”
Through all those years and all those jobs, Stewart developed “a passion” for the art of the hotelier, he says. He never questioned the career he’d eventually pursue. For this particular son of a billionaire, there would be no four years of easeful scholarship at Oxford or Cambridge or Yale. Instead, he enrolled in the hospitality-management program at Florida International University in Miami. After graduating in 2002, his education essentially continued apace, though this time right alongside his father in the company’s management offices. He headed operations for Sandals’s on-property revenue streams, monitoring everything from the rooms’ TV movies to the resort’s retail outlets and phone systems. When Butch Stewart turned 65 in 2005, he decided to step back a bit from the daily grind, and he felt his son had been sufficiently groomed. He thus crowned Adam his successor, though the old man still signs off on every major decision.
Among those key decisions have been the ways in which the Stewart clan has redirected the company over the last several years. Instead of cheapening their brand to make it more accessible to a mass consumer market, they’ve focused their attentions on the high end. Butch Stewart, referred to as “The Chairman” or “Mr. Chairman” by almost everyone in the company (including his children), has said that Sandals has “moved beyond the all-inclusive category and the often-maligned all-inclusive connotation.” The company’s expanding Royal Plantation resort chain, for instance, is a boutique version of Sandals. Adam is also overseeing the construction of a new resort at Port Antonio, on Jamaica’s northeast coast, and he recently helped complete negotiations for the purchase of 62 acres near Negril, on the west coast, for another. The Royal Plantation Collection, he notes, has been outperforming Sandals and Beaches of late.
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Renovation and expansion continue almost everywhere in the Stewarts’ resort constellation. The company has six large-scale construction projects underway or in the planning stages, including a $180 million expansion of its Beaches property in Turks and Caicos, and a $12 million project at the Montego Bay Sandals that will enlarge rooms and create a riverine pool that snakes along the room blocks, offering guests balconies that open onto the water. At most hotels, Stewart says, rooms are renovated every 10 to 12 years. At Sandals, “We do ours every two and a half to three years.” He estimates that Sandals has spent $200 million on rehab alone since 2005. The company acts as its own contractor, with its own full-time staff of architects, engineers and interior designers. “I always make the joke that we’re really a construction company that operates hotels,” he says. The company puts no limits on capital spending. “We sort of look at a blank piece of paper and say, ‘What would the ultimate be?’ ” he says. Then they execute it.
For an expansion of the Sandals resort on the island of St. Lucia, for example, the company is taking a cue from Las Vegas and creating a Venetian village with room blocks connected by gondolas on canals and an acre of infinity pool. “We let our imaginations run wild, and then we cost it out,” Stewart says. “We scale back here and there, where we have to, but we spend a lot.”
Much of what the company earns is reinvested in the form of upgrades to the physical plant and guest services (state-of-the-art water-ski boats, say, or bigger wine lists). “We pay the bills, we pay our staff and then everything goes right back into the organization,” Stewart says.
Such a business model is made possible by the fact that Sandals Resorts is 100 percent family-owned. It has no outside investors and no board of directors — “a huge advantage,” Stewart says. “We don’t have to report to anybody. We can make a decision this morning and have it implemented by this evening. It makes us nimble.”
One of Stewart’s primary goals has been to remove red tape wherever he can find it. He says he has two audiences in mind when he makes a decision: the customer and the staff. Reviewing the company’s structure division by division, he says, “I take it from the employees’ standpoint: How easy do we make it for them to get their job done?” To that end, he and his brother Bobby, 43, a computer expert in charge of Sandals’s information technology (and its director of SRI), helped design and implement a system that surveys guests via the Internet and collates their ratings of the resort and its services. They then distribute the results to employees, who can see their own scores and make on-the-job corrections as needed. “We use it on the property before every staff shift starts,” Stewart says.
The Stewarts as a unit are nothing if not detail-obsessed. Adam discusses a recent deal with Beringer Vineyards, in the Napa Valley, to pour bottles of wine that cost $18 retail, rather than the $4 bottles offered by some all-inclusive competitors. He mentions Sandals’s recently acquired $50,000 MasterCraft water-ski boats, the 300-thread-count linens on its beds and the two lighting specialists the company employs to make sure the mood is just right at each of the bars, restaurants and rooms in the chain. “We kind of go overboard on the details,” he says. That seems to be a family trait. When Butch Stewart began his career, he was a hustling salesman who understood in which details the devil could be found. As an air-conditioner man, he made himself available whenever a customer wished. He installed units on Christmas Eve (a husband’s gift for his wife). He made house calls at 2 o’clock in the morning if that’s when the machines broke down. “His entire work ethic was based on customer service — on saying yes,” Jaime Stewart says.
Whether by nature or nurture, the patriarch’s work ethic seems hard-wired into the entire Stewart clan, and by extension the company as a whole. A large portion of Sandals’s senior management has worked for the firm since its founding. There’s Eleanor Miller, director of projects, who has been with Butch since his air-conditioning days. And Brian and David Roper, both managing directors, who started with Stewart in 1981 as cooks and bartenders. And Daddy Stone and Red Jute, head waiter and restaurant manager, respectively, at the Montego Bay Sandals, who also came aboard that first year. “These people are extended family members,” Adam says. “You work all day with them, and then you go to their houses for dinner.”
Any family business has unique complexities and challenges, of course. But the Stewarts believe they’ve got those problems solved. “Because of the culture that’s existed here, with the organization being a part of us, we’ve never had a problem,” Adam says. “As a matter of fact, I wish it would never change. As companies get larger, sometimes it’s harder to have the family right there at the top, but I really don’t see this changing for us.”