Music by Hugh Williams with lyrics by Jimmy Kennedy. The song was inspired by the "red sails" of Kitty of Coleraine, a yacht Kennedy often saw off the northern coast of Ireland and by his adopted town Portstewart, a seaside resort in County Londonderry.
The title of the song provides the inspiration for the Red Sails Festival held annually in Portstewart, Northern Ireland. Kennedy wrote the song while staying in Portstewart.