AIRPORT TRAFFIC DOWN BUT REVS MAY BE UP

McCarran Airport traffic declined 2.1% in Dec. However, an easy hold % and table drop comparison with last year coupled with recent strength in the high end from Asia may have resulted in Strip revenue growth.

 

 

McCarran Airport in Las Vegas released the number of enplaned/deplaned passengers at 3.1 million for the month of December, down 2.1% y-o-y.  On the surface, that would seem to be enough to push gaming revenue growth into negative territory following November’s surprise increase.  However, in December of 2008, table game hold percentage was only 10.1% versus a more normalized hold of 12%.  Moreover, baccarat drop, which can be extremely volatile month to month, was also abnormally low last year.

 

In addition to the easy comparisons in hold percentage and table drop there are two additional factors leading to a conclusion that Strip gaming revenue growth could be positive again in December.  As we’ve written about, there has been an acceleration in high end Asian play recently due the strong economic conditions, particularly in China.  Macau is experiencing the same trend.  Also, CityCenter opened in mid-December which probably spurred above normal high end visitation.  

 

Assuming normal hold percentage, we project Strip gaming revenues to once again climb 8% - November also posted +8% - over the same month last year.  Hold percentage is always the wild card, of course, and the assumption of normal hold is the largest y-o-y contributor to our positive revenue projection.  If we assume consistent low hold with last year, our model projects slightly negative Strip revenue growth.

 

Here our are projections:

 

AIRPORT TRAFFIC DOWN BUT REVS MAY BE UP - dec est strip revs

 

AIRPORT TRAFFIC DOWN BUT REVS MAY BE UP - mccarran dec chart


Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more