Late last night (03/14/19) the Macau government extended the concessions – that is, the right to operate casino gaming – for SJM (not covered) and MGM from March 2020 to June 2022, which now puts them in line with their four other peers in Macau. The extension required minimal/immaterial payments and labor terms, in our view, with MGM paying the government ~$25M, paying SJM ~$2M, and establishing a labor-related bank guarantee of ~$101M.
Search Coverage List, Models & Reports
Search Results1-10 out of 112
This is a recurring piece we write monthly where we track several key monthly indicators, which have historically led Macau GGR growth. The data points for the most recent month show 10 of the 19 y/y indicators are better than the prior month versus 12 of 19 last month. We chart all 19 of the indicators, and we show a summary table in Exhibit 2.
Macau February GGR was released overnight, showing 4.4% y/y growth, which we think was roughly in line with a wide range of expectations, but lower than many of the expectations coming into the month after what appeared to be a softer Chinese New Year. When combining Jan/Feb to neutralize for the holiday timing GGR declined -0.5% y/y on a tough comp. Our initial expectation is March could be flat to up slightly y/y, which implies flat to down slightly daily GGR from Jan/Feb in line with long-term seasonality. There are no changes to our estimates, and our summary file with historical GGR data is updated here.
Timeshare stocks have rallied hard since the Christmas Eve bottom, with VAC up 61%, HGV up 33%, and WYND up 39% versus the S&P 500 up 19%. However, the stocks still remain well off their 2018 highs. For example, VAC remains 35% below its prior high and HGV remains 31% below its prior high, and it’s been entirely a function of multiple contraction. Interestingly, the S&P 500 is now only 5% below its prior high and credit spreads have narrowed considerably.
This is a recurring piece we write monthly where we track several key monthly indicators, which have historically led Macau GGR growth. The data points for the most recent month show 12 of the 19 y/y indicators are better than the prior month versus 10 of 18 last month. Note we added a new metric this month – Chinese freight traffic – which leads Macau GGR by three months. We chart all 19 of the indicators, and we show a summary table in Exhibit 2.
We compared 4Q earnings reports from Las Vegas Strip companies to the reported industry data, and we think the conclusion is CZR likely outperformed peers and gained market share during 4Q. CZR’s peers have all reported earnings, while CZR will report this week on Thursday (02/21/19).
We aggregated pricing trends across multiple vacation options/destinations including cruise lines, Las Vegas casinos, hotels in multiple global markets, airline fares, Disney resorts, ski resorts, and rental cars. The purpose of our analysis was to compare pricing trends for cruises and Las Vegas casinos to alternative vacation options to understand if recent years of pricing strength may begin to make substitute vacation options more attractive, which some investors have expressed to us.
Earnings season has really just begun for our coverage, with only three companies reporting thus far (LVS, WYNN, and RCL). We have 10 observations to highlight with 10 charts, including takeaways from our earnings, read-throughs from other industries, and other non-earnings developments within our coverage.
Macau January GGR was released overnight (2/1/19), showing a decline of 5% y/y, in line with our initial estimate, but we think better than many feared given several seemed to expect at least a high-single digit decline y/y, with the usual wide range of estimates. January and February are both messy months this year due to the timing of Chinese New Year and challenging comps from the prior year. Recall January was up 36% y/y in the year ago period. Our gaming summary file with all historical monthly GGR data is updated and included in the model link.
December Vegas data was released today (01/31/19)(GGR in the AM and all other data just came out in the PM). Strip GGR was down 0.9% y/y, versus our estimate of up ~5% y/y, driven by weak hold. Had the industry played in line with normal luck then GGR would have been up about 13% y/y, well ahead of our estimate. Shockingly, Strip RevPAR was up 15.7% y/y, versus our conservative guess of flattish (the data is very volatile). Our summary file of gaming data we track is included with a link to this email with historical data.
- 1 of 12
- next →