TICKERS: MPEL, GTECH, RCL, CCL, 0027.HK
EVENTS
- Jan 28: LVS 4Q CC
- Jan 29: PENN 4Q CC
- Jan 29: RCL 4Q CC
- (1877)
- Feb 2: Cod Manila Grand Opening
- Feb 3: GLPI 4Q CC
HEADLINE STORY
Galaxy Phase 2 press release–
- Open on May 27, 2015, will open with "majority" of facilities
- HK$5b "Broadway at Galaxy Macau" property - refurbished former Grand Waldo property
- Will add 1,500 new hotel rooms, taking total to 4,000 rooms
- Looking to hire >8,000 employees. Currently recruited >1,000 people
- Some hires will be non-locals
- Francis Lui (Vice Chairman of Galaxy Entertainment):
- Believe Macau govt should think very carefully on whether to increase gaming tax from 39%
- Robert Drake, CFO:
- "Confident we will get a sufficient amount of tables to generate the returns we have been forecasting."
Takeaway: Rumors of a September opening debunked. How many tables will they receive remains the question?
COMPANY NEWS
LVS- Sheldon Adelson will replace Edward Tracy as Sands China's CEO on March 6. He will remain as chairman following the appointment.
Also, Sands China announced an interim dividend of HKD0.99 (US$0.13) per share, a 13.8% YoY.
Takeaway: Raising the dividend in a slumping demand environment is surprising.
SGMS – Peppermill announced that it has selected an array of Bally Systems solutions to replace existing slot systems at five Nevada properties. Included in the agreement is Bally’s new display management, and it’s promotional kiosk.
HST - Announces major transformational repositioning plan for the Denver Marriott Tech Center Hotel. Beginning in late 2015, the hotel will undergo an extensive multi-million dollar renovation to completely modernize every aspect of the hotel. This renovation includes all 628-rooms of the two towers and will reconfigure and enhance the entrance, lobby, restaurants, and 45,000 square feet of event space.
HOT- expects another year of accelerated growth in North America, where it will surpass the 600th hotel milestone in the next two months. In 2014, Starwood opened 23 new hotels and signed 64 new hotel deals in North America, a 23% signings increase over the previous year.
“North America remains one of Starwood’s most important global markets accounting for approximately 50% of our global portfolio and a third of our hotel openings in 2014, and we expect strong growth trends to continue this year,” said Simon Turner, President of Global Development for HOT. “The ongoing economic recovery and increased availability of financing are creating favorable conditions, contributing to strong growth across all three segments of our business and a notable surge in demand for new-build hotels, which comprised 81% of our North America signings in 2014.”
Takeaway: North America pipeline is strong for 2015.
INDUSTRY NEWS
Vietnam - Have benefited from Macau VIP market downturn. The Grand Ho Tram Strip’s Chris Wieners said that the majority of the resort’s customers are from mainland China and Korea. “They also see a major opportunity with the current downturn in the VIP market in Macau: the opportunity to start growing that market in Vietnam. So a big target for them is to start looking at China, as well as the junket organizations and the VIP market here in Macau, and attract them to Ho Tram,”
No smoking in New Orleans – city council has unanimously voted to ban smoking in Casinos, Bars and Restaurants. The ban will apply to Caesar’s Harrah’s New Orleans and Churchill Downs’ Fair Grounds racino. Pinnacle’s Boomtown New Orleans and Boyd’s Treasure Chest would be unaffected as they are in NOLA’s suburbs. Businesses will have 90 days to comply with the ban, which includes e-cigarettes.
Takeaway: Negative for New Orleans casinos (CZR/CHDN).
AC – Airlines are being offered financial incentives to fly into Atlantic City International Airport, the Press of Atlantic City reported. Airlines are being offered breaks on landing fees, fuel sales and airport rental fees and could also get up to $60,000 in marketing support for domestic flights, and $120,000 for international flights.
LV - First quarter air capacity is up about 4.2% from last year with international seats up 17.5% and domestic 3.2%
Powerball - Powerball lottery ticket sales collapsed by some 40% in the second half of 2014 from the same period a year earlier in the 44 states, plus the District of Columbia, which participate in the sweepstakes. There hasn’t been a Powerball jackpot higher than $257 million in almost a year. In the 15 months before February 2014, there were five jackpots of at least $400 million.
Takeaway: Evidence that the US lottery industry is maturing. These Powerball sales are awful.
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.