LEISURE LETTER (12/29/2014)

Tickers:  WYNN, CCL



COMPANY NEWS

WYNN – Steve Wynn previews the recently revised plans for Wynn Everett including redesigned curved hotel reminiscent of Wynn Las Vegas and Encore, increased planned rooms from 500 to 630, an oversized lobby overlooking the Mystic River as well as porte-cochère and casino featuring 150 table games and a raised poker floor. 

Article HERE

 

CCL – Up to $100 onboard credit per cabin and two category upgrades lead Carnival Cruise Lines ‘Real Deal’ campaign for the peak wave booking period. The offers apply to bookings from December 26 until January 31 and cover cruises until August 31. The deals are available on three to eight-day cruises, with itineraries including the western Caribbean, Nassau, Bahamas, eastern Caribbean, and exotic Caribbean.

Article HERE

Takeaway:  Carnival brand's Wave 2015 promotion for the Caribbean is in effect. 

INDUSTRY NEWS

Macau November Visitation – Visitor arrivals in November increased by 15% YoY to 2,802,373. Visitors from Mainland China surged by 28% YoY to 1,975,951, coming primarily from Guangdong Province (898,373) and Fujian Province (78,196). The number of mainland visitors travelling under the Individual Visit Scheme also soared by 35% to 940,056. Meanwhile, visitors from South Korea increased by 8% to 41,592, while those from Hong Kong (508,122) and Taiwan (69,625) decreased by 3% and 19% respectively. The average length of visitors’ stays decreased by 0.1 day year-on-year to 0.9 day in November. Overnight and same-day visitors recorded an average stay of 1.9 days and 0.2 day respectively.

Article HERE

Takeaway: Visitation remains strong despite mass revenue slump

 

VIP Gamblers Must Have Not Have Criminal Records – The Gaming Inspection and Coordination Bureau has told VIP gaming promoters that they must certify that their clients have no criminal record before giving them accounts, Business Daily reports. The newspaper quotes unidentified sources in the gaming business as saying that a notice circulated by the bureau on December 19 says the rule comes into force on January 1.

Article HERE

Takeaway: A further crackdown on potential criminal activity and the potential related money laundering.

 

Macau Secretary Appointment Questioned – Several lawmakers have asked the government to explain the decision to appoint the former deputy director of the Land, Public Works and Transport Bureau (DSSOPT) Li Canfeng as the new director of the bureau. The lawmaker said that society is uncertain about the appointment of Li because of the way he testified during the trial of his former superior, the disgraced Secretary for Transport and Public Works Ao Man Long. During the court hearings of the Au Man Long case in 2007, Li had responded to multiple questions with “I can’t remember” and “I have no recollection”, which had drawn criticisms from the judge. He left the government in 2008. Moreover, the lawmaker criticized the public relation skills of the new Secretary for Transport and Public Works, Raimundo Rosário, describing the way he responded to the media regarding Li’s appointment as inappropriate.

Article HERE

 

Macau Chief Executive Reiterates Need for Economic Diversification – Macau Chief Executive Fernando Chui Sai On said he expects the weight of the casino industry in the city’s economy to be gradually reduced. He added that pushing economic diversification away from gaming would be one of the priorities for his new term. Mr Chui was in Beijing on Saturday, after his annual duty visit to President Xi Jinping and Premier Li Keqiang to report to on the development of Macau in the past 12 months.

Article HERE

Takeaway: What a coincidence - the Macau and Chinese governments are on the same page.  

 

Casino Workers Encouraged to Take Unpaid Leave – The city’s casino workers’ union, Forefront of Macau Gaming, said beginning in November some of its members were advised that unpaid leave was encouraged amongst gaming table workers – namely, croupiers, supervisors and pit managers..

Article HERE

Takeaway: Both MPEL and MGM China are discussed as offering workers the opportunity to take leave without pay.

 

Louis Vitton Belt Become Focus of Extravagance – Li Jianguo, general manager of the state-owned Rucheng County water and electricity company, is placed under judicial investigation after a photo of him wearing a Louis Vuitton belt went viral on social media in China.

Article HERE

Takeaway: China's social media web-site Weibo is frequently used to "out" citizens who participate in policies deemed non-compliant with the Communist Party of China. 

 

Former Vice Mayor of Shenzhen Sentenced – A former vice mayor of south China's business hub Shenzhen, Liang Daoxing, has been sentenced to ten years in prison for corruption. The sentence was passed on Nov. 19 by the Intermediate People's Court of Zhaoqing city, but the announcement was stalled until Liang decided if he would choose to appeal. He did not appeal. Liang, who was vice mayor of Shenzhen City from 2002 to early 2009, was found guilty of accepting bribes of 1.95 million yuan (318,000 U.S. dollars), 1.78 million HK dollars (about 230,000 U.S. dollars) and 5,000 U.S. dollars, in return for "benefits" for others.

Article HERE

Takeaway: Another big tiger caged during corruption enforcement actions.

 

Hong Kong Resident Contracted H7N9 – A 68-year-old woman from Hong Kong has been infected with the H7N9 virus. She is currently in a critical condition, having been admitted to the intensive care unit. The patient had visited friends in Shenzhen, accompanied by two other people. She came back the same day to Hong Kong and told authorities she had not visited any market in Shenzhen, nor did she have contact with live poultry

Article HERE

 

Straub Seeks Revel Discount – Lawyers for Glenn Straub said in a court filing the property should be sold for $87 million, not the $95.4 million runner-up bid his Polo North Country Club put in at auction. A judge is scheduled to consider Revel's request to sell the casino to Straub on Jan. 5. Straub says in the filing that he believes the auction was unfair because his side wasn't properly notified of the other bidder. He said he wouldn't have bid more than his original $90 million "stalking horse" bid that set the floor price for the auction if he knew about what he described as "significant and numerous improprieties" in the bidding process.

Article HERE

Takeaway: The story of real estate, all buyers want a lower price - the presiding Judge now faces a prisoner's dilemma, risk losing the sale or push Straub for his last offer price. 

MACRO

Hedgeye Macro Team remains negative Europe, their bottom-up, qualitative analysis (Growth/Inflation/Policy framework) indicates that the Eurozone is setting up to enter the ugly Quad4 in Q4 (equating to growth decelerates and inflation decelerates) = Europe Slowing.

Takeaway:  European pricing has been a tailwind for CCL and RCL but a negative pivot here looks increasingly likely in 2015.