Will There Be An October Surprise? Call with renowned pollster Scott Rasmussen

Will There Be An October Surprise?  Call with renowned pollster Scott Rasmussen - HE M octobersurprise


We will be hosting a conference call on Monday, November 3rd at 11:00am EDT with renowned pollster Scott Rasmussen to discuss the upcoming midterm elections.  


Mr. Rasmussen will provide a 30 minute presentation on potential election outcomes followed by an open Q&A moderated by Hedgeye Director of Research Daryl Jones.


Mr. Rasmussen was referred to by the Washington Post as "a driving force in American politics" and been called "America's insurgent pollster". He has widely been considered one of the more accurate pollsters in the nation and the one who is most in touch with subtle opinion shifts in the electorate.




  • What are the probable outcomes nationwide for both the Senate and House of Representatives?
  • Which races are most likely to end in surprise?
  • What are the implications of this election for politics, economics, and policy?
  • Post the results, what are the implications for the President and both parties in various outcome scenarios?



  • Toll Free Number:
  • Direct Dial Number:
  • Conference Code: 399212#
  • Materials: CLICK HERE(slides will be available

    approximately one hour prior to the start of the call)

Ping for more information.



Founder and president of Rasmussen Reports, Scott Rasmussen is a political analyst, New York Times bestselling author, public speaker and independent public opinion pollster. 


In 2012, Rasmussen became a New York Times bestselling author with his book The People's Money. His earlier books include Mad as Hell: How the Tea Party Movement is Fundamentally Remaking Our Two-Party System and In Search of Self-Governance.


Rasmussen and his firm have developed a reputation for delivering reliable, newsworthy and actionable public opinion data.'s Mickey Kaus declared in 2009, "If you have a choice between Rasmussen and, say, the prestigious N.Y. Times, go with Rasmussen." The Washington Examiner's Michael Barone calls him "one of America's most innovative pollsters." Pat Caddell and Doug Schoen, pollsters for Presidents Jimmy Carter and Bill Clinton, say that Scott has an "unchallenged record for both integrity and accuracy."


In 2008, Rasmussen projected then-Senator Barack Obama would win the presidential election by a 52% to 46% margin. Obama won 53% to 46%. In 2004, Rasmussen was within half a percentage point of the actual vote totals earned by both President Bush and Senator Kerry.


Cartoon of the Day: A Closer Look Behind Today's GDP Report

Takeaway: A closer look behind today's GDP number reveals a picture not nearly as pretty as the headline suggests.

For more Hedgeye macro perspective on today's GDP report click here.


Cartoon of the Day: A Closer Look Behind Today's GDP Report - GDP cartoon for 10.30.2014


Takeaway: Perception of Vegas recovery remains much stronger than the data indicates. Another weak quarter from MGM

How to convinced the Street that normal is not normal - low hold blamed for tough quarter (19.8% is pretty close to the midpoint of 18-22% normal range unless my calculator is broken)




  • Very robust mass market growth at MGM China
  • Lower margins at Strip due to investments made to Delano, lower table hold, and increases in certain expenses
  • MGM Cotai: on schedule to open in Fall 2016; 
  • Delano completed at end of September:  has exceeded expectations
  • Monte Carlo/NYNY:  construction work disrupted performance
  • MGM National Harbor opening Fall 2016
  • MA: Confident on NO vote on Proposition 3
  • Japan IR debate:  remains active
  • Strip REVPAR:  6% exceeded guidance of 5%
  • Grew convention mix by 3% points; in 4Q, will increase convention mix by 2% points, will bring FY convention mix to all-time high of 17%.
  • 4Q REVPAR guidance: 5%
  • STRIP EBITDA:  -$40m due to lower table hold, higher employee benefits, and marketing costs associated with Delano
  • CityCenter:  improved profitability at VDara
  • Aria:  lower EBITDA due to lower table hold %
  • Vdara:  96% OCCU, 12% in REVPAR
  • Crystals:  another successful quarter
  • $545m cash at MGM China
  • MGM $1.2 bn: available liquidity; MGM China $1.4 bn available liquidity
  • $404m cash CityCenter ($157m in restricted cash); total debt: $1.5bn
  • 3Q:  $103m capex (wholly-owned); $46 (National Harbor/MA), $98 MGM China ($17 at MGM Macau, $81m at MGM Cotai)
  • MGM China
    • Slot handle: 5%; revs: -7% due to lower hold
    • Mass: drove 75% of profits
    • Will continue to allocate tables to mass floor
  • Las Vegas consumers:  feeling better, lower gas prices; +4% visitation YTD
  • Mandalay:  will increase conv space in 2015 by 300k sq ft


Q & A

  • -$40m breakout excluding low table hold impact:  70% related to changes in employee benefit side; 30% impact from Delano/Monte Carlo
  • Flow through has been more volatile.
  • MGM China margins:
    • Controlling costs in tough revenue environment
    • Mass business - pretty steady and consistent
  • Convention 1Q 2015:  pace continues to get better; 
  • 2015 convention mix should be higher than 17%; low single digit growth in convention business 
  • Goal is to increase REVPAR in every quarter in 2015.
  • MGM China VIP/Mass margin pressures?
    • Some operators have been discounting. Does not motivate customers. MGM China does not see need to discount.
    • Premium mass outperforming in the Peninsula
    • Highest EBITDA/per room in the industry
  • Low Bellagio 3Q REVPAR:  have started to push rates.  Convention rates were lower than what they could have been. 
  • 3Q Low table hold:  Mirage - largest decline  on a YoY basis; MGM Grand (held well last year, held more normal this year); Bellagio table hold (being a little better this year at normal levels)
  • REVPAR:  luxury/core pretty consistent; revenue spend up 3-5% on luxury and core properties; consumers getting more healthy
  • REVPOR was 6% in 3Q, strong performance
  • 2015:  convention business will be stronger in the city than 2014, will build share and benefit core properties 
  • 4Q:  having a great convention quarter; mix up 3% points;  but tough comps in 4Q 2013.  Shake Shake coming in mid-December.
  • F&B Vegas EBITDA:  +9% in 3Q, driven by catering business driven by strong convention calendar; 
  • Excited about Genting project:  will drive new customers to Las Vegas

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Takeaway: We continue to like NCLH and think Prestige synergies are likely to contribute to continued estimate beats

Positive commentary regarding 2015 $25m Prestige synergy target which we think is too conservative. Guidance for 4Q yields is above Street expectations. 






  • 25th consecutive quarter of trailing EBITDA (TTM) growth; 23% CAGR
  • Anticipate Prestige closing in mid-November; 4Q call will be first with integrated company
  • Norwegian Escape:  offering 7-day cruises beginning in Nov 2015
  • Have set Ebola protocols across fleet; have seen impact on the margin over past several weeks however, booking have returned back to pre-Ebola levels.
  • FX impacted 3Q by 2 cents; going forward impact will be similar in 4Q
  • Made incremental investments in marketing in 3Q
  • 4Q
    • Drydock earlier than expected 
    • Work underway for scrubber installations; will have a number of staterooms out of service
  • 2015 capacity: 59% in Caribbean, 17% in Europe, 5% Hawaii, 3% Bermuda
  • 2015 Caribbean capacity: slightly down for the year;
  • 1Q 2015: tougher comps (3.8% yield in 1Q 2014, two ship charters that did significantly well (Sochi/Bud Light Hotel)); volume will be consistent with 1Q 2014
  • Investor Day in early February and will provide 2015 commentary
  • In 2016 and afterwards, will report on consolidated basis

Q & A

  • 2015:  significantly more loaded on Getaway, Epic, and Breakaway in 1Q YoY.  Well ahead on every quarter on load in the Caribbean.  1Q pricing is a little bit tough 
  • <1% industry capacity change in Caribbean in 1Q from 53% to 52.2% 
  • 1Q yield: could finish +1% yield (but would be difficult to achieve that given tough comps)
  • Prestige synergy of $25m:  is already in the bag; more opportunities ahead - port contracts, shore excursions, fuel
  • Margin opportunity with Prestige?  if economic picture gets a little better, could be another 500bps improvement
  • 2015 Prestige:  booked solidly; revenues up significantly, feeling some pressure in 1Q, same as Norwegian. 
  • Revenue opportunities with Pride of America and The Haven concept
  • Shift of drydock impact on 4Q? $2-3m benefit 
  • 1Q 2013 charter contribution: a little over a 1% of growth
  • Commissions/transportation/other line run rate:  15.5-16%; renegotiated port contracts, renegotiated credit card costs, more casino initiatives; more targeted incentive programs.
  • MSC aggressive 'free-ship' offer:  great brand in Europe
  • Europe:  pricing doing well in 2014 but because of carnage in 2012/2013; sees good pricing continuing.
  • Asia:  will be more interested in 2016


Strong Q3 but Q4 tempered by renovations and more difficult YoY compares in 2015





Ed Walter, CEO

  • Strong F&B and Group rated results in Q3
  • Feel good about business and outlook
  • Highest Q3 occupancy since 2000 which drove ADR
  • Q3 strong demand across all group segments especially Association +14%  and strong Corp demand +3.5% resulted in Corp rate +4.5%, Sept group revenues +15% was second strongest month of the entire year.  
  • Group demand in the quarter increased nearly 6%, rate jumped by more than 4.5% and  group revenues improved by more than 10.5%.
  • Group limited transient occupancy, resulted in transient rate ADR +6.5% 
  • Banquet & AV revenues +8%, 40% flowthrough
  • Acquisitions 
    • European JV buying Grand Esplanade Berlin Euro 81 million
    • b2 Miami $58 million
    • Desire to buy hotels with third party operators, currently have seven third party operated hotels in portfolio
  • Disposition
    • European JV Sheraton Skyline
    • Tampa Marriott $199 million
  • CapEx $29 million - ROI projects such as:  1) conversion of underutilized space such as Manchester Grand Hyatt San Diego;  2) rebranding/ renovations such as Memphis;  3) projects to reduce energy costs $17 million in NY for $3 million in annual savings
  • Q4: lower group demand, lower F&B
  • H2 > H1 results
  • Rooms booked in 2014 for 2015 +5%
  • 2015 RevPAR driven by rate and change in business mix


Greg Larson, CFO

RevPAR results

  • Lat Am +26%; Q4 will be slower
  • West: rate driven, strong group, group revenues +11.4%. Group created compression eliminated special corp.  Q4: SF continue to out perform, SEA & LA in line, DEN under perform. Phoenix better/stronger
  • HI and San Diego, under performed, higher airfares.  SD meeting space renovations and pre-construction.   Q4: SD weak/construction; HI out perform
  • South Central:  strong group rev +11.9%, 8% F&B rev.  ATL, CHI strong.  Group volume 8%, rev +11%.  Outperform in Q4.  Houston weak due to difficult comps.  Q4: negative due to renovations
  • East: transient rev +15%.   Q4 Boston / WDC weaker - Boston Q4 13 World Series.  NY: under performed in Q3, =8.5% Group revenue gain, but impacted by select service supply.  Q4: NY under perform
  • European JV:   Q4:

Margin Growth:  180 bps in H1 and 170 bps in H2


Special Dividend:  possible in Q4 if not find 1035 exchange for Tampa Marriott proceeds




Q: Independent hotels - why shift, why now?

  • Focus on limited markets, more deeply - already own many large group/convention hotels in current markets, this is natural extension to grow portfolio

Q: Group as %age of revenue mix, now vs. last cycle?

  • ~40% normally, last peak was 43%, 37% today.

Q: Independent hotels - growth and size of this segment

  • Likely grow from acquisitions, have some conversion ideas, would like 10% of total rooms independent channel.

Q: Capital allocation vs. length of cycle - buying assets vs. share repo?

  • Feel good about cycle, look at acquisitions over 10 years, therefore must include some period of softer results as compared to other buyer who may look to buy but also try to sell prior to peak.

Q: Group weakness in Q4?

  • Renovation disruptions....if not renovations, group +4%.
  • Group bookings 4% higher in Q4 if not have renovations across portfolio

Q: 2015 RevPAR comments/framing?

  • Drivers: U.S. economic growth and Worldwide economic growth driving international travel growth
  • Expect strong year, reacceleration

Q: What portion of portfolio unencumbered by mgmt contract flexibility?

  • US portfolio 40% flexible mgmt contract agreements - especially in non-core markets.  So, 75% of assets looking to sell in non-core markets have flexible mgmt contracts

Q: NY & WDC concentration?

  • May look to sell in both NY and WDC over time

Q: RevPAR assumptions regarding demand?

  • US hotels +/- 20% demand is from international travel while in NY +/-40% demand is from international travel. 
  • Lat Am:  World Cup challenges YoY in Brazil, Mexico City strong 2014 due to easy comp vs. 2013, Aussie/NZ MSD RevPAR growth.

Q: Acquisitions - fine tuning brand/market mix vs. EBITDA moving?

  • Issue is scale and size of acquisition, not need to be bigger to be bigger, about improving overall growth and earnings per share. More about fine tuning.

Q: Renovation schedule/activity?

  • About 35% of capex in Q4
  • More importantly, larger hotels undergoing room or meeting room renovations.  Half of disruptive capex happening in Q4 vs. full year

Q: Urban select service?

  • Overall small, but big growth rate, because many small $20 million asset purchases absent a portfolio transaction.

Q: Orlando

  • Finished all work in Q1 and Q2 and Q3 not impacted by construction. Expect good 2015.  Florida portfolio to out perform in 2015

Q: NY Marriott Marquis - update?

  • Construction virtually completed.  Vornado not announced contracts. Expect to get sign operational next month. Look forward to getting retail and observation areas to open.
  • Want to make sure Vornado maximizes rents: retail leased by early 2015, but maintain some signage hold backs due to opportunity of size/location of screen.

Q: Opportunities to convert hotels to select-service

  • Look for opportunities to modify operating model outsource F&B, improve margins and thus maintain full-service rate but select-service margins.

Q: NY issues vs. portfolio ex Marriott Marquis

  • Less about occupancy problem vs. select service additions keeping price ceiling on market. Marquis is a group driven hotel.

Q: Four Seasons Philly - updated on timing and cost conversion?

  • Likely independent, soft brand, but affiliated with major brand.

Q: IMF trends

  • H1 2014 down, FY 2014 +4%, 2015 should

Q: European acquisition pricing in 2014 vs. next year - appetite strength for acquisitions?

  • Cap Rates in Germany 100-150 bps vs. US, London = best US markets at approximately 4% to 5%
  • Expect Germany to have better GDP growth relative to Europe
  • London: capital aggressively seeking assets, more willing to sell than buy in London.
  • Process of marketing other hotels in Europe, look to reduce size of portfolio given buyers willingness to pay full price - especially middle of the pack assets.
  • Still like Europe will stay just more focused.
  • Europe finance on asset-by-asset basis.  Financing shorter term in Europe. Financial markets more aggressive in Europe, delta vs. last year cost of debt lower.

Q: San Antonio lawsuit addback

  • $25 million in restricted cash account.  GAAP impact of $69 million, but EBITDA accrual was $59 million, net-net interest accrual and other litigation accruals.

Q: Supply/Demand for Group, moving to softer nights?

  • Robust transient demand, high occupancies mid-week, so now moving groups around.

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