LEISURE LETTER (06/18/2015)



  • June 23 - CCL Q2 2015 10am  


Airbnb receives $24 Billion Valuation - Revenue is projected to top more than $900 million in 2015.  

  • The company projects revenues to grow to $10 billion by 2020, and expects $3 billion in EBITDA by 2020. 
  • For 2015 Airbnb is forecasting an operating loss of $150 million.
  • Airbnb expects to close a $1 billion round of funding this year at the $24 billion valuation
  • Revenue growth rates over the past two years have been roughly 90%, and has largely contributed to its rich valuation. 
  • Listings on the site have more than doubled YoY, with 1.4 million listings at the end of May, compared to 600,000 listings in February of 2014
  • Airbnb generates revenue by taking a 3% cut of each booking along with a 6% to 12% service fee from guests.


Takeaway: If these forecasts prove true, AirBnB will be a major threat to the lodging and vacation rental industry. 


MAR - MAR and TRIP announced yesterday that they are expanding their partnership and will add Marriott's global hotel portfolio to the TripAdvisor Instant Booking platform. Starting later this summer, travelers will be able to conveniently make a booking at any of Marriott's more than 4,200 hotels around the world without leaving the TripAdvisor site. 


Takeaway: A great deal for TRIP as it builds out its Instant Booking platform and a smart decision by MAR. Don't fight the OTAs, collaborate instead.


RCL - will invest $3.5m on upgrading cruise facilities at Vietnam's Chan May Port. John Tercek, VP commercial development of RCL signed a berthing preferential agreement with Nguyen Huu Tho, president of Chan May Port. This is the first agreement between RCL and Vietnam.  The upgrading of Chan May is expected to be completed in July.




Macau - Junket Industry Needs More Supervision, says US Trade Union. US-based International Union of Operating Engineers (IUOE) says it has sent a communication to the Central Commission for Discipline Inspection of the Chinese Government, claiming the government’s anti-graft policy will not work if Macau’s regulation of the VIP gaming industry is not to be extended. 


Takeaway: IUOE has been aggressive in raising multiple issues within the gaming industry in Macau.


Macau - Casinos are keen on "compromise" over proposed smoking ban. MGM China Co-chairperson Pansy Ho Chui-king, said that they were simply trying to reach a compromise on the matter and were not attempting to pressure the government into reconsidering its plan to impose a full smoking ban on casinos.



Ohio - Ohio Senate is pushing to add 3,000 new gambling terminals. The push by the Senate to add lottery machines appears connected to a related provision that would allow the Ohio Department of Education, which receives funding from the lottery, to tap an extra $61 million from the lottery in the second year of the two-year budget. 


Takeaway: Could be good news for Intralot and IGT.  



China - May new home prices +0.6% m/m vs +0.2% in April

  • Annualized (4.9%) y/y vs (5.7%) in April
  • Prices down m/m in 41 of 70 cities vs 47 in April

Hedgeye Macro Team remains negative on 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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