Tickers: BYD, WYNN, HST, CCL
TODAY'S HEADLINE STORY
Macau Smoking Ban in Bars, Night Clubs and Other Venues – A smoking ban in bars, nightclubs, saunas and massage parlors came into force as the New Year began. Offenders are required to pay a MOP400 fine. There are currently 50 tobacco control inspectors. The office said that 40 new inspectors will join the team in the beginning of this year.
Takeaway: We could see a full-casino smoking ban at some point. At the very least, more retail/entertainment areas will prohibit smoking.
BYD – announced two new slots promotions - Boyd Bonus Slots Tournaments running on Tuesdays as well as a new Penny Lane January Bonus Spin slots promotion, running from January 1 through January 31, 2015 at seven properties including: The Orleans, Gold Coast, Suncoast, Sam’s Town, Main Street Station, California and Fremont.
Article HERE and HERE
Takeaway: Boyd rolling out some new slot promotions in the Locals area. Locals revenues have been flat Q4 to date.
WYNN – Boston City Hall has filed a lawsuit to block the Massachusetts Gaming Commission from naming Boston’s neighboring city of Everett as the host community for a proposed US$1.6 billion casino resort from Wynn Resorts Ltd. Boston’s Mayor Martin J. Walsh is arguing Boston residents should get to vote on the project because they will bear the burden of the environmental impact and traffic congestion.
Takeaway: Mayor Walsh fighting the perpetual battle in opposition to Wynn and its proposed casino. What will be the payoff?
HST – announced today that The Powell Hotel in San Francisco will be converted to a new independent identity and renamed the Axiom Hotel. The Company acquired the hotel in early 2014 with the intent to transform the hotel and has selected Kokua Hospitality as the operator.
Takeaway: Given the significantly slower city-wide convention schedule this year in San Francisco, due to the multi-year $500 million renovation of the Moscone Convention Center, the Power/Axiom Hotel closure and renovation timing makes sense.
MSC Cruises – MSC Cruises is celebrating Wave Season by adding perks including up to $200 in shipboard credits, beverage packages and reduced deposits to its Inclusive Experiences’ categories. MSC’s Wave Season promotion applies to select Caribbean, Bermuda, Europe, Canary Islands, and Transatlantic Grand Voyage sailings that are 5 days or longer and booked between Jan. 1, 2015 and Feb. 15, 2015.
As an extra thank you to its valuable travel agent partners, MSC is kicking off Wave Season by extending its offer of 18% flat commission for all 2015/2016 Caribbean Group Bookings on MSC Divina to Jan. 31, 2015.
Takeaway: MSC has been so promotional in 2014, their Wave offer isn't a game changer. MSC continues to be aggressive in doling out high agent commissions as well.
CCL – A suspected case of Norovirus has broken out on P&O’s newly refurbished Aurora, TTG has learned. The ship was the first in the fleet to be given a new livery design and only arrived back in the UK last month, following its £32 million refit. It is currently sailing a four-night voyage, which left Southampton on January 4.
Takeaway: It's hard to understand norovirus happening right after an extensive refit. Bad luck or bad planning for P&O.
CCL – Carnival Miracle will join its sister ships in having a whole array of upgrades and 'Fun Ship 2.0' features following a two-week-long dry dock in March (March 7-21)
Macau MICE Industry Calls For Special Visas – The Macau Convention and Exhibition Association is asking the government to consider giving business visitors multiple-entry visas that are valid for one year,
Macau Immigration Blacklist Confirmed – Over the past week, several persons were denied entry into Macau because they were evaluated by the Macau Government "as a threat to the internal security and stability of Macau". The barred persons included Hong Kong lawmaker Emily Lau Wai-hing, a member of the Hong Kong Legislative Council and the chairwoman of Hong Kong's Democratic Party, and Shih Shu-hua, a Taiwanese Dentist who participated in Taiwan’s Sunflower Movement as a medical volunteer and made a speech in October during his visit to Hong Kong in support of the Occupy Movement.
Article HERE and HERE
Takeaway: Besides VIP gamblers needing clean criminal and backgrounds, it now appears all visitors to Macau must have a clean background - regardless of their reason and purpose of visit to Macau.
Macau International Airport Traffic Increased in 2014 – During 2014, MIA carried over 5,480,000 passengers and 53,000 aircraft movements, recording an increase of 9% and 7% respectively compared to 2013.
Takeaway: Strong growth in aircraft movements and passenger traffic but neither are translating into higher gaming revenue. Should be good long term.
Hengqin Island Development "An Order" – A Macau government adviser said that Beijing changed its call to action from just suggesting a call to develop non-gambling ventures in Hengqin to that of “an order.”
Takeaway: When considered in the context of President Xi's visit to both Macau and Hengqin Island as well as the continued gaming revenue slowdown, the new "order" supports Macau's long-term economic diversification plans. Hengqin Island's master development plan can be viewed here.
Chinese Provincial Corruption Crackdown – Three officials in central China's Hubei Province have been removed from both their government posts and the Communist Party of China. Former party chief of the Ezhou municipal legislature Tu Weifa, former party chief of the Huangshi municipal legislature Zhu Zhonghua and Yu Hongxing, former deputy party chief of the Jingzhou municipal political advisory body, are suspected of serious disciplinary violations, according to the Hubei provincial commission for disciplinary inspection. Preliminary investigations found that the three abused their power to seek profits for others and took bribes.
Takeaway: More "tigers" indicted for corruption and taking bribes - no end in sight for the continued enforcement actions.
AirAsia – Three more weekly flights operated by Indonesia AirAsia to Singapore have been cancelled amid an official probe by the Indonesian authorities into the airline's flying permits. With immediate effect, QZ367 from Bandung to Singapore will not fly on Tuesdays, Thursdays and Saturdays
Takeaway: Could impede the recent improvement in visitation to Singapore
Florida Lottery – Sales ( (June-Dec 2014) are up more than 8% over the same period and are on track to meet, if not exceed, fiscal 2015's sales goal of $5.3 billion.
Takeaway: Florida Lottery has been an outperformer in 2014
Global Lottery Sales Increase 10.1% for Q1–Q3 2014 – When comparing sales results for the first nine months of 2014 on a year-over-year basis, Latin American lotteries posted an aggregate increase in sales of 22.4%, including Argentina’s Lotería Nacional Sociedad del Estado with a sales +26.8% and Brazil’s Caixa Econômica Federal +17.1%. Participating lotteries from the Asia Pacific region registered an increase in sales of 17.8% with growth fueled by the China Sports Lottery reporting a sales increase +33.8%. Australia’s Lotterywest, increased sales by 5.2%. Participating lotteries from Africa increased aggregate sales by 5.2% while European lotteries increased sales by +4.2%, with Hungary’s Szerencsejáték Zrt., sales growth of +25.2%, the Greek national lottery increased sales by +12.9%, and sales at the Czech Republic’s SAZKA, a.s. rose +9.3%. Despite the improving U.S. economy, lottery sales in the North American region were flat for the first three-quarters of 2014.
Bahamas Hotel Tax Adjusted – The Bahamas Ministry of Finance in conjunction with the Ministry of Tourism repealed the 10% hotel tax and replaced it with a 7.5% value added tax. The VAT will be charged on hotels and home rentals as well as services purchased by guests.
U.S. Affiliated Hotels in Indonesia On Alert – The U.S. Embassy has been made aware of a potential threat against US-associated hotels and banks in Surabaya, Indonesia. The U.S. Embassy recommends heightened vigilance and awareness of one’s surroundings when visiting such facilities.
American Express Wave Sale – Until Feb. 28 the sale will offer savings, upgrades and free amenities for 19 participating cruise lines, including Celebrity, Princess and Royal Caribbean.
According to a recent survey of more than 200 American Express Travel counselors throughout the US, Canada and Mexico, 56% said river cruising will be a top trend in 2015, followed by 37% who see more small ship cruising.
Travel counselors reported an increase in requests for river cruises in Europe, Southeast Asia and Africa. Counselors also noted customers are seeking intimate experiences on smaller ships.
Takeaway: River cruising is becoming a competitor to the sea liners.
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.