LEISURE LETTER (02/03/2015)




  • Feb 3: WYNN 4Q CC
    • ; pw: 57961245
  • Feb 12: MPEL 4Q CC
    • (1866) ; pw: MPEL
  • Feb 17: MGM 4Q CC
    • ; pw: 8870181

headline story

January Macau revenues - fell 17% YoY but hold was high. Junket volume fell 36%, VIP revenues dropped 17% (adjusted for premium mass reclass: -25%), and Mass revenues tumbled 18% (adjusted for premium mass reclass: -6%).  Galaxy was the winner in January with GGR share of 22.5%, up 1.9% bps MoM while while SJM was the biggest loser with market share falling to 21.9%, its lowest share since Sept 2014.

Takeaway: The headline number was bad, but the details were even worse.  Please see our detailed analysis in a separate note, MACAU JANUARY DETAIL.


MGM China - announced what it describes as a “discretionary bonus payout” for all non-management team members. The bonus, equivalent to one month’s salary and to be paid this month, was “in recognition of the Golden Lion Team’s steadfast efforts and success in the past year,” said the firm

Article HERE

Takeaway: MGM's 1st labor cost increase for 2015. Will there be more?


Paradise - said it had “successfully deployed” 78 of its Live Multi Game (LMG) terminals at SJM's Grand Lisboa casino-hotel in Macau. 

Article HERE

Takeaway: ETGs was a rare growth spot in 2014 for Macau 

RCL - Royal Caribbean's Grandeur of the Seas returned home to Baltimore a day early after a number of passengers became sick on the cruise with what is believed to be Norovirus. Royal Caribbean spokesperson Cynthia Martinez said 193 guests (9.91%) and nine crew members (1.15%) experienced the illness. The ship will undergo a ship-wide cleaning and disinfection after the guests disembark.  The terminal will also be sanitized.

Article HERE

Takeaway:  Well 2015 almost made it through Wave with Norovirus.

RCL – Cruise lines are starting to see declines from one of their most important revenue streams, shore excursions. That was one of the admissions made by newly named Royal Caribbean International President Michael Bayley at a forum for agents onboard the Freedom of the Seas.  

Article HERE

Takeaway: Some agents blame low commissions on the shore excursions We think it's also due to more competition.


CCL - As part of Cunard’s, ‘Our birthday. Your present,’ celebrations surrounding the brand’s 175th anniversary year, passengers will receive additional complimentary on board spending money on selected sailings in 2015. Passengers who book a Cunard cruise before February 28,  2015 will receive between $120 and $1,595 complimentary on board spending money per person when booking with a Cunard Fare - double the amount originally offered when the offer started in December.

Article HERE


North America

DC scratch-off- Washington DC will start selling scratch-off lottery tickets. A spokesman for the city’s CFO said Friday that the city has entered into new contracts with two of the three North American companies that print instant tickets. The first new tickets will go on sale on Wednesday.

Article HERE

Takeaway: SGMS was probably one of the two contractors.



China China broadened its graft probe into the financial sector today. Bank of Beijing Co Ltd board director Lu Haijun is under investigation for serious disciplinary violations, the bank said, the latest high-ranking banker to fall under scrutiny as China's anti-corruption drive turns to the finance sector. Chinese President Xi Jinping has warned that the problem of official graft is serious enough to threaten the Communist Party's legitimacy and has vowed to go after powerful "tigers" as well as lowly "flies".

Article HERE 


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.

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