LEISURE LETTER (08/4/2015) - NCLH, CCL

TICKERS: NCLH, CCL

 

EVENTS   

 

August 4: 10:00am: NCLH 2Q CC Webcast Link Here

August 4: 10:00am: RHP 2Q CC

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

August 4: 11:00am: H 2Q CC ; PW: 73409721

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

August 5: Studio City opening date unveiled during media tour

August 6: 6:00am: G13.SI 2Q CC

August 6: 8:30am: MPEL 2Q CC ; PW: MPEL

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

August 7: 11:00am: Hedgeye Macau Call 

COMPANY NEWS      

Leisure and Resorts World Corp. - City of Dreams Manila casino resort in the Philippines, is independently to open this year between 10 and 15 retail gaming outlets for either bingo or online games in that country.  The company operated – as of the end of last year – a network of around 90 bingo sites and about 50 “e-games stations” licensed by the Philippine Amusement and Gaming Corp (Pagcor), according to a media report on Monday. 

ARTICLE HERE

Takeaway: We think this property will experience a nice ramp through 2016

 

NCLH - Norwegian Cruise Line's expansion into Asia is now on the schedule.  The 13-ship brand today announced it would offer sailings in the region starting in 2016 on the 2,348-passenger Norwegian Star.  Norwegian says the vessel will operate out of Singapore and Hong Kong as part of a seasonal deployment that also will include Australia and New Zealand sailings out of Sydney and Auckland, New Zealand. 

ARTICLE HERE

Takeaway: This confirms our comments from the July 15 Leisure Letter.  

 

CCL -  Seabourn has revealed the rendering of one of the most distinct onboard venues aboard its newest ultra-luxury vessel, Seabourn Encore.

  • The Grand Salon is set to debut in December 2016. According to company reports, the main show lounge will present a sophisticated setting for onboard performances, from new shows by seasoned entertainers to local, cultural productions from ashore and guest speakers from the line's popular enrichment series, such as legendary American journalist Dan Rather and Forbes Media Chairman and Editor-in-Chief Steve Forbes.  
  • Seabourn Encore will feature modern design elements and innovations consistent with the line's reputation for understated elegance. The 40,350-GRT ship will be configured with one additional deck and expanded public areas, and is expected to carry just 600 guests, based on double occupancy. In addition, every suite will feature a private veranda.

ARTICLE HERE

Takeaway: Seabourn continues to raise the bar for luxury cruises. 

INDUSTRY NEWS 

Macau Junkets - The slump in gaming has reduced the number of VIP gaming promoters serving Macau to 148, about 30% fewer than two years ago, Business Daily reports, citing an estimate by the Association of Gaming and Entertainment Promoters of Macau.  The newspaper quotes association president Kwok Chi Chung as saying: “This number is about 60 fewer than the peak time of about 213 VIP gaming operators in business in the city back in 2013, when Macau had robust gaming results.” 

ARTICLE HERE

 

Macau GGR Share - Sands China Ltd retained the biggest slice of Macau’s casino market last month, Business Daily reports.  The market leader had 23.8 per cent of gross gaming revenue.  Galaxy Entertainment Group Ltd had 22.6% of gaming revenue, SJM Holdings Ltd 20.3%, Melco Crown Entertainment Ltd 14.2%, MGM China Holdings Ltd 9.7% and Wynn Macau Ltd 9.4%. 

ARTICLE HERE

 

Macau Labor Dispute- A group of more than 30 local construction workers went to the Labour Affairs Bureau, complaining that they have been unfairly dismissed. The group of Macau residents said they were hired more than two months ago by contractor Shing Lung Construction and Engineering Company to work at SJM's Cotai property – Lisboa Palace.  They say they received a phone call on the 31st of July saying that they no longer needed to go to work.  Some workers say that non-resident employees are now working there, adding that the company is hiring some illegal workers as well.  Shing Lung Construction and Engineering Company told, Macau News outlet, TDM that the workers in question have been hired by a subcontractor and not by them directly.

ARTICLE HERE

 

River Cruises - Low water on the Danube is continuing to disrupt river cruise itineraries, forcing cruise lines to cancel cruises, change itineraries and bus passengers between ports and ships in order to complete itineraries.  

ARTICLE HERE

Takeaway: It has been a challenging summer for river cruise operators. 

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.


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