“The early signs of stability seen at the end of the third quarter continued through quarter four, with growth in hotel revenues in all regions and overall revenues (pre Real Estate) up 17%. EBITDA margin was ahead of 2008, with the result that adjusted EBITDA (pre Real Estate) grew by $3.3 million to $13.5 million. Whilst we cannot yet celebrate the end of these challenging times, these results, coupled with improved bookings pace, are strong indicators that the revenue and RevPAR declines of 2009 will not be repeated in 2010."

- Paul White, President and Chief Executive Officer



  • "Owned Hotels same store RevPAR was down 7% in local currency. However, because of a weakening of the US dollar in the last quarter, RevPAR in US dollars was up 11% compared to the fourth quarter of last year."
  • "The principal variances from the fourth quarter of 2008 included results from owned hotels in Italy (up $3.8 million), Grand Hotel Europe, St Petersburg (up $1.8 million), La Samanna, St. Martin (down $1.5 million), Mount Nelson Hotel, Cape Town (down $1.6 million), and Venice Simplon-Orient-Express (up $1.1 million)."
  • "Porto Cupecoy enjoyed strong sales in the run-up to completion of the construction, with ten apartment contracts signed during the quarter, and a further five units sold since the end of the year. This means that 99 units or 54% of the total are now sold. The grand opening of the development took place in January 2010."
  • Europe: "For the region, the effect of the weakening US dollar in the fourth quarter of 2009 compared to a strengthening US dollar in the fourth quarter of 2008 had a $3.2 million positive impact on EBITDA versus the prior year."
  • North America "Excluding EBITDA of $3.2 million from Charleston Place, there was an EBITDA decrease of $1.1 million. Same store RevPAR for the region fell by 18%."


  • Weather impacted them in Peru
  • Non rooms revenues and trains & cruises had good growth in the quarter
  • Increase in Europe was all FX
  • Cost reductions implemented in the 1H09 started to flatten out
  • Key focus in 2010 will be on the sale of the residential real estate.  $68MM of sales to date and $34MM has already been received. The remaining 85 units will be sold free of debt, since the proceeds from the originally sold units will pay down the construction loans
  • Last week Madeira was hit with flash flooding, so that may impact their results
  • Quarter one bookings are tracking 6% ahead, but pricing is lower given the promotions and discounting
  • 2Q2010 is tracking behind, but they expect it to catch up given the recent pick up in volumes
  • Trains business is up 23% for 1Q2010
  • Charleston is seeing some recovery in group bookings
  • Minimal opportunities to cut costs further, now it's all about growing revenues
  • Leverage Covenant was 8x
  • Term debt maturity : 548MM in 2011, 176MM in 2012, thereafter 1445MM. $60MM due in 2010, but $34MM is related to the construction loans which will be repaid when the units close
  • $5MM of Capex in the Q + 11MM in Porto Cupecoy 
  • Cash tax was $14MM in 2009, $12-14MM expected in 2010
  • Plan to refinance maturing 2011 debt by 4Q2010


  • Europe will show better RevPAR growth since they all saw huge occupancy drops but only small drop in rate.  This is still going to be another tough year
  • Booking window in Brazil has always been short. They are 16% up on rooms booked y-o-y or 2010, but that's a small % of the total
  • Peru though tends to get booked 8-9 months in advance and because of the train closure they are down 10-15% for on the books business for 2010
  • No NY development update
  • Tone of refinancing on R/C is good, but the pricing is clearly going to be higher.  Think they can get 200ish spread. Think they can roll 75-85% of the commitment with a 3-5 year term
  • Why is Copacabana doing so well?
    • Domestic demand is very strong - over 1/3 of the travelers are domestic
  • Even in Italy the domestic demand has increased dramatically to double digits from 1-2% just a few years ago
  • 40% of their customers are from NA, 40% European
  • What are the plans with Keswick?
    • Have 40 plots left to sell, have been working with Robert Stern on designs. Hope that they will sell the plots over the next 12-24 months
  • Outlook for Grand Hotel Europe & Italian portfolio and their pricing strategy
    • In the shoulder season months they are much more focused on occupancy
    • In the peak season, they are feeling more confident that they don't need to discount as much to get occupancy
    • Grand Hotel: pickup is very strong on the room side, but are concerned on the F&B side. Don't think that he 6-7% growth they saw in Jan will continue throughout the year but still expect good results
    • Italy: too early to tell.  Bookings really just starting coming in at the end of Feb through East period.
  • TTM EBITDA at the Copa around $13MM for 2009 and peak was $14.5MM
  • Real Estate strategy
    • Cupecoy - customers have already paid about 75% of the purchase price, so they are very confident they will close on all the sold units. Just need face to face time with the client to hand the keys over which will take 3-4 months
    • Expect to sell the remaining 84 units over the next two years.  Demand has been very strong
    • If the economy recovers, will they consider starting new projects? Unclear - still far away, question of when and how

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."

read more

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.

read more

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."

read more

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.

read more

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.

read more

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.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more