LEISURE LETTER (05/06/2014)

Tickers: HOT, MAR

EVENTS TO WATCH: 

Tuesday, May 6

• RHP Q1 earnings – 10am , Passcode: 25122491

• SHO Q1 earnings – 12pm

• TRIP Q1 earnings – 4:30pm

• DIS FQ2 earnings – 5pm , Passcode: 36995300

 

Wednesday, May 7

• STAY Q1  – 830am

• STN Q1 – 4pm

• CZR Q1 – 5pm , Passcode: 20337702

 

Thursday, May 8

• PCLN Q1 – 730am

• MPEL Q1 – 830am , Passcode: MPEL

• CAR Q1 – 830am , Passcode Avis Budget

• BEE Q1 – 10am , Passcode: 10895989

• HOT – 10:10am presenting at Baird's 2014 Growth Stock Conference

• SGMS Q1 – 430pm , Password: SGMS

 

Friday, May 9

• HLT Q1 earnings – 10am , Passcode: 25981567

• AHT Q1 earnings – 11am

 

Monday, May 12

• DRH Q1 earnings – 10am , Passcode: 66393516

• HMIN Q1 earnings – 9pm

 

Tuesday, May 13

• HTHT Q1 earnings – 9pm , Passcode 28722442

COMPANY NEWS

Paradise Entertainment - has placed more of its multi-game live dealer-table hybrids in Macau casinos.  Wynn has added 34 terminals to bring it to 80; MGM has added 50 to reach 109; and Casino Macau Jockey Club has installed 172 terminals.  The terminals are being used by Macau casinos to offset the cap on live table games and are targeting lower-wagering customers.

Takeaway: Paradise and Shuffle Masters are doing well in Macau

 

HOT – announced it will open 35 hotels in the Middle East in the next three years, expanding its portfolio to over 80 hotels.  Starwood will open seven new hotels in the Middle East this year, in both established and fast-growing markets such as the United Arab Emirates (UAE), Iraq and Bahrain. 

Takeaway: Growth in the Middle East

 

MAR – announced 14 new properties in the UAE and Saudi Arabia at the Arabian Hotel Investment Conference in Dubai.

Takeaway: Not to be outdone by its competitor.

 

INDUSTRY NEWS

Macau Labor Day Visitation – Macau welcomed 551,957 tourists in the 4-day holiday starting May 1, an increase of 20.3% YoY.  

Takeaway: A strong start to May and we forecast Macau May GGR to increase 20% YoY

 

Greater China Travel – State-run agency Xinhua reported that the mainland enjoyed a record-breaking figure of 37 million train journeys made by Chinese travelers during the Labour Day holiday this year, surging 16% from last year.

Takeaway: Mainland Chinese continue to travel despite a economic cross currents.

 

Avian Flu (H7N9) – Guangzhou suspended sales of live poultry at nearly a third of its wet markets as the providence began a four-month test.

Takeaway: Reactions to bird flu threats have been muted lately following many false alarms.

MACRO

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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