THE LEISURE LETTER (3/10/2014)

CZR, HOT


EVENTS TO WATCH:  UPCOMING EARNINGS/CONFERENCES 

TODAY

  • CZR 4Q 2013 conference call:  5 pm
  • STN 4Q 2013 conference call:  4:30 pm  

Monday-Thursday, March 10-13

  • 2014 Cruise Shipping Miami Conference

Tuesday, March 12

  • MTN FY2Q 2014 conference call:  4:30 pm

Friday, March 14

  • Hyatt Investor Day

COMPANY NEWS

CZR – a Las Vegas Review Journal story over the weekend was skeptical of CZR’s recently announced strategic asset sales to Caesars Growth Partners and called attention to Caesars Entertainment Corp’s $3.06 billion of maturing debt in 2015 and 2016

 

Takeaway:  We too were perplexed by the recent announcement...seems like a three card monte car

 

HOT – announced Sheraton will open 35 hotels during next 12 months with a focus on China and Southwest Asia.

Takeaway:  A little better than we thought. Hopefully, China doesn't blow up.

 

INDUSTRY NEWS

Number of cruise passengers in Spain +41% YoY in Jan Hosteltur 

According to the monthly report of state ports, Spanish ports in January received a total of 454,040 cruise passengers, representing +41% YoY.  The number of cruise ships that passed were 208, an increase of 21.6% YoY. 

 

Takeaway:  Positive data point in a market that has struggled the past several years


Massachusetts Update – The Commission will take up the decision of MGM by May 30 if the sole remaining applicant in Western Mass. — MGM Grand — is worthy of a license in Springfield.   The commission will then decide whether the Greater Boston casino license will be issued for Everett or Revere – pitting Steve Wynn against Suffolk Downs.  A decision is expected by June 30.

 

Takeaway:  Winner's Curse? PENN looks like the highest ROI in MA

 

MACRO

Chinese February data

  • Chinese new yuan loans CNY 644.5 bn vs Reuters estimate CNY716 bn
  • Total social financing CNY 958 bn vs CNY 2.58 tn in January

Takeaway:  Macro data from China remains disappointing.  The stock market is at the its lowest point since 2009.

 

Hedgeye remains negative on consumer spending and believes in more inflation.  Following  a great call on rising housing prices, the Hedgeye Macro/Financials team is turning decidedly less positive. 

 

Takeaway:  We’ve found housing prices to be the single most significant factor in driving gaming revenues over the past 20 years in virtually all gaming markets across the US.

 


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