LEISURE LETTER (04/24/2015)

Tickers:  SGMS, RCL



  • Today: WYNN Annual general meeting: proxy fight

  • April 28 (4:30pm) - WYNN 1Q CC: ; pw: 20173922

  • April 29 (1:00pm)  -  HOT 1Q CC: ; pw: 17589434

  • April 30 (9:00am) - HST 1Q CC:

  • April 30 (10:00am) - MAR 1Q CC: ; pw:  99597993

  • April 30 (5:00pm) - BYD 1Q CC: ; pw: 3858748

  • May 4 (11:00am) - MGM 1Q CC: ; pw: 1535291

  • May 5 (11:00am) - HYATT 1Q CC ; pw: 17020089

  • May 7 (8:30am) - MPEL 1Q CC ; pw: MPEL


SGMS-   Net Sans-Hitay, the consortium that won the tender to operate Turkey’s national lottery Milli Piyango, has pulled out of the deal, with the second-placed bidder ERG-Ahlatçı set to be granted the ten-year contract.


Net Sans-Hitay, comprising Turkish tourism business Net Holding, Scientific Games and the co-owner of the Bilyoner.com iGaming platform Hitay Investment Holdings, has been forced to withdraw its candidacy after it was refused more time to renegotiate its funding plans for the project by the Turkish government, having won the tender in July last year.


Takeaway: Blow to SGMS's lottery ambitions in Europe 


SGMS - will provide the Pojoaque Indians with Bally systems at their Buffalo Thunder and Cities of Gold casinos in New Mexico.  The casinos will use the Bally SGS slot management system and its iVIEW Display Manager with Elite Bonusing Suite.  SGMS is also providing Route 66 Casino in Albuquerque with its Play4Fun social casino platform.


GALAXY - Galaxy intends to invest over MOP12.8 billion in developing 2.74 square km of land over the border on Hengqin island. Galaxy Entertainment said the development will include a resort with facilities for sport and other leisure pursuits.



MSC Cruises - is suspending calls in Ukraine and Egypt for autumn 2015 through to spring 2016, replacing them with a number of Mediterranean alternatives. In response to clear market demand, said the company,  MSC Sinfonia, MSC Opera, MSC Fantasia and MSC Musica will, from autumn 2015 to winter 2016, variously incorporate the Greek islands of Rhodes and Crete, as well as Cyprus and Israel into their sailings.


MSC Cruises also revealed that, in response to high demand, MSC Opera will increase the frequency of itineraries calling in the Canary Islands, Spain and Madeira, including an overnight stay in Funchal, for her Canary Islands winter 2016 programme.


Takeaway: Trouble spots remain in Europe. Are analysts finally waking up to these European risks?


RCL - From April 22 through May 1, Royal Caribbean International is offering 2% bonus commission per qualifying booking as part of its annual Travel Agent Appreciation event. The extra pay is also tied to the introduction of Anthem of the Seas.


For all new bookings made from April 22 through May 1, on any Caribbean and Bahamas sailings departing on Sept. 1 through Dec. 31, agents can earn the additional 2%. They need to register promotion code 'THANKS' in order to receive the extra pay.



RCL - Royal Caribbean International is starting a nationwide radio brand advertising campaign from today (Friday) as part of the line’s efforts to encourage more first-timers on board. The company will be pushing its overall brand proposition – appealing to adventurous couples and families – with no mention of price, according to UK and Ireland managing director Stuart Leven.



NV McCarran Airport data- for March 2015, passenger traffic was up 1.8% YoY. 

Takeaway: 19th consecutive month of traffic growth at McCarran. International visitation stronger than domestic driven by Canada and Mexico

Local workers-  Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, requested the city’s six casino operators to boost their corporate policies in order to promote more local workers.  Leong said the Macau government “placed great importance [on] the workers’ career[s]…, such as the opportunities for upward and horizontal mobility,” according to a government statement. He added this would be “one of the factors to consider in the mid-term review [of] the industry”.



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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