LEISURE LETTER (07/24/2015) - MPEL, MGM, CCL

TICKERS: MPEL, MGM 


 

EVENTS   

 

July 24 11am-2pm:  PENN Plainridge tour and investor day

July 28 8:30am: WYN 2Q CC ; PW: WYNDHAM

July 29 10:00am: HLT 2Q CC ; PW: 74328196

July 30 9:00am: HST 2Q CC

July 30 10:00am: MAR 2Q CC ; PW: 66506287

July 30 1:00pm: HOT 2Q CC ; PW: 69941686

July 31 10:00am: RCL 2Q CC 

August 1

  • Wild Rose Jefferson opens
  • St Regis Macau opens

August 4: 11:00am: MGM 2Q CC ; PW: 0575269

August 4: 5:00pm: AWAY 2Q CC

August 6: 8:30-1pm: RCL INVESTOR DAY (NYSE)

COMPANY NEWS      

MPEL - Declining GGR risks need for austerity from Macau gaming operators, according to Lawrence Ho, CEO of MPEL

  • “As the [Macau] Secretary for Finance said, this [GGR monthly tally] is kind of right at the level where the [Macau] government might need to look at austerity measures, which would be less than ideal,” Ho said.
  • “If the government is looking at austerity measures, maybe a lot of other businesses – including gaming operators – will have to look at it as well,” he added. He did not say what those cost-cutting measures could be, according to media reports
  • Ho also said they will soon announce the opening date for Studio City, which is 95% complete.

ARTICLE HERE

 

MGM - A 15% to 25% loss in gaming revenue was possible if a blanket smoking ban would be imposed on casinos, as had been the case in other gaming jurisdictions, MGM China CEO Grant Bowie said Thursday.  Bowie insisted that smoking lounges were a “very good compromise” vis-à-vis the government’s proposal to impose a full smoking ban on all gaming premises, comprising mass gaming floors and VIP rooms.

ARTICLE HERE 

INDUSTRY NEWS 

McCarran Passenger Traffic - Las Vegas Intl. Airport reported the following traffic numbers for June: 

  • Total passenger traffic was 3,911,813 vs. 3,698,373 in June of 2014, good for a 5.8% YoY increase
  • June's numbers bring the YTD total to 22.1 million vs 21.2 million in 2014, a 3.8% YoY increase.
  • Domestic passengers made up 3,533,752 of the total, a 5.7% YoY increase
  • International made up 291,011 of the total, a 3.8% YoY increase. 
  • Helicopter passengers made up 87,050 of the total, a 15.3% YoY increase. 

LEISURE LETTER (07/24/2015) - MPEL, MGM, CCL - McCarran June Numbers

Takeaway: McCarran continues to exhibit strong visitation numbers.


Louisiana GGR June - SSS: (8.25%) YoY 

Takeaway: Smoking ban taking its toll. June overall was a little softer than expectations but we are projecting a strong July comeback, potentially up 5% in same store regional gaming revenue.

 

South Korea Visitation- The number of foreign tourists visiting South Korea fell 41% YoY in June, due to fears about an outbreak of Middle East Respiratory Syndrome (MERS) in that country, statistics showed and officials confirmed.  South Korean casino operator Paradise Co Ltd – which runs venues catering only for foreign players – saw a 50.2% YoY decline in casino sales in June, the firm had said in a filing to the Korea Exchange on July 6.  The June 2015 inbound tourism numbers showed approximately 750,900 arrivals, compared to 1.27 million in the year-prior period, said the Korea Tourism Organization.

ARTICLE HERE 

 

Malta Cruise Traffic - Cruise passenger statistics published for the second quarter of 2015 show a 66.4% YoY increase for Malta.  The number of cruise ships calling in the Maltese Islands grew from 89 calls in April to June 2014 to 108 calls this year. For the first six months of the year, traffic is up 39.9% YoY.  Malta’s cruise sector is on a growth curve particularly as a result of a number of positive initiatives, said the tourism authority, ranging from strong performance by MSC and Costa, along with TUI homeporting.

ARTICLE HERE 

 

UBER in Las Vegas - Cab company owners attending Thursday's Nevada Taxicab Authority session called it the most important meeting in the board'€™s history.  An industry proposal that deregulates several aspects of cab licensing won approval, setting the stage for a more competitive environment between cabbies and contracted Uber and Lyft drivers.  

  • Owners applauded after the board's 4-0 vote that will eliminate time and geographic restrictions on cab medallions and convert them to around-the-clock use in any location in the county. The board also approved the addition of 20 new medallions per company, 10 immediately and 10 more effective Nov. 1. That'€™s 320 more cabs between the 16 companies.

  • The move effectively allows cab companies to convert 791 time-restricted medallions and 433 geographically restricted medallions to unlimited use.

  • The end result is that there will be nearly twice as many unrestricted cabs, 2,730 compared with 1,443, on the road once every restriction is lifted.

ARTICLE HERE

Takeaway: Taxis trying to remain competitive with Uber.

MACRO 

Hedgeye Macro Team is incrementally bearish on U.S. consumption growth, based on the consumer's continued efforts to deleverage their household balance sheet combined with the peaking of consumer confidence and stagnating labor productivity.   

Takeaway:  For now, US regional gaming slowed in June but North American cruise pricing still doing well.


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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