PowerShares Dynamic Leisure & Entmnt ETF

United Continental (UAL) expects its unit revenue to decline approximately 6%–8% YoY for the upcoming first quarter of 2016. Revenues are expected to remain under pressure in 2016.

Delta Air Lines (DAL) expects to generate more than $7 billion–$8 billion of operating cash flow and ~$4 billion–$5 billion of free cash flow. It plans to reduce its adjusted net debt to $4 billion by 2020.

Airlines have been enjoying huge cash surpluses due to cheaper jet fuel, a situation that has persisted since oil prices experienced a massive slide in mid-2014.

According to a study by Expedia, airfares fell by about 5% in 2015. Despite this decline, passenger complaints are on the rise. Many consumer leaders also lobbied for airfare reductions.

The airline industry’s fundamentals have improved tremendously in the past two years. This was driven by several factors that include low oil prices, strong passenger travel demand, and strong economic growth.

According to IATA (or International Airline Transport Association), for September 2016, global passenger travel demand grew 7% year-over-year (or YoY).

Crude oil is trading below $50 per barrel, one of its lowest recent prices, and it is expected to take some time before it recovers, given the huge oversupply.

Visitor arrivals increase In May 2017, visitor arrivals rose 3.7% YoY (year-over-year) to 2.6 million visitors. However, month-over-month, visitor arrivals fell 6.3%. Visitor arrivals have been improving since September 2016, except in February 2017, when they fell 5.6% to 2.5 million visitors. In the first five months of the year, visitor arrivals in Macao rose 6.3% […]

McDonald’s, the world’s largest fast food chain, has over 38,000 restaurants across 120 countries. In 2018, it had approximately $21.0 billion in sales.

Currently, CCL’s forward EV/EBITDA ratio stands at 10.4x. CCL enjoyed its highest valuation of 63x during September 2006. It reached its lows of ~5x in November 2008.

You should keep watch on American Airlines’ expected future debt reduction, capacity expansion, and future margins since analysts believe that airline margins have peaked.

Inflation rate Inflation is an overall rise in the price of goods and services in an economy, leading to the fall in purchasing power of money. Macao’s annual inflation, as measured by the composite consumer price index, rose 0.95% YoY (year-over-year) in May 2017, higher than the 0.8% increase seen in April. Macao’s inflation has […]

Traffic growth Delta Air Lines (DAL) saw average traffic of about 59.0 million passenger miles for the quarter, a 0.2% year-over-year decline, despite a growth in capacity. This was driven by weak revenues in all of Delta’s markets except Latin America. As of September 2016, traffic had grown by 1.9% YTD (year-to-date) to 163.2 billion […]

In the Starwood-Marriott merger, the companies have placed a limit on divestitures of $700 million, based on 12x annual EBITDA for any hotels required to be divested.

For 1Q16, analysts estimate American Airlines’ revenues to decline by 4% to $9.4 billion and then to slow to 2% and 0.5% in 2Q16 and 3Q16, respectively.

Royal Caribbean’s (RCL) share price shot up considerably in 2014. RCL was the only company among the three major cruise operators to outperform the S&P 500 index throughout the year.

McDonald’s (MCD) competition includes large international and national food chains as well as regional and local retailers of food products.

On Monday, November 16, Marriott International (MAR) agreed to buy Starwood Hotels & Resorts (HOT) for a combination of cash and stock.

VIP revenue driving short-term growth The recent growth in Macao casino revenue has been driven by the VIP segment. In the first quarter of 2017, VIP gross gaming revenue grew 16.8% YoY (year-over-year) to 35.6 billion Macao patacas. The VIP segment is also showing good signs. The repayment cycle has been maintained at a healthy 20 […]

Analyst recommendations Analysts favor MGM Resorts (MGM) stock over other major casinos’. All 20 analysts tracking the stock recommend “buy.” Seven (35%) of these analysts have “strong buy” recommendations, while the remaining 75% have “buy” recommendations. For Melco Resorts & Entertainment (MLCO), 15 (68.2%) of the 22 analysts tracking the stock recommend “buy,” and 31.8% […]

Contrary to fast food restaurants, casual dining restaurants have a relaxed and casual ambiance with a lot of seating. They offer full table service and may also have a wine menu or full bar service.

Royal Caribbean International is a global brand offered by Royal Caribbean (RCL). It’s one of the world’s three largest contemporary brands.

McDonald’s performance is sensitive to any changes in price levels—be it food, labor, or rent. So how much does it cost for McDonald’s to generate revenue?

With the Starwood-Marriott merger, the companies expect to generate at least $200 million in annual cost savings beginning in the second year after the deal closes.

Royal Caribbean (RCL) offers all cruise company services, including pre- and post-hotel stay arrangements and air transportation.

Analysts are estimating an ~4.5% decline in Delta Air Lines’s (DAL) revenue to $10.6 billion for 3Q16.

Labor Thanks to the oil price drop, labor costs now form the highest component of an airline’s expenses. In such a scenario growing unrest among pilots and the union clout can end the airline party. Fuel prices Fuel costs now form the second major cost component of airlines. Airline margins have improved tremendously due to […]

China: The key market The Macao region relies heavily on the Chinese mainland, as it garners a huge majority (about 67%) of its visitors and VIP gamers, from China and its neighboring countries. The weakness in the Chinese economy will adversely affect the spending capacity of people in the country, which could lead to a […]

NDLS released its 2Q14 earnings on August 13, 2014. The company’s stock price dipped 16.7% since its release date—compared to its current price of $21.75.

Hilton expanded its operations in segments that require less capital investment. These include the Management and Franchise segment and the Timeshare segment.

UAL’s consensus 12-month target price is $77.38, which indicates a 65.6% return potential.

Merger evaluation The Bally Technologies, or Bally, board of directors closely evaluated the proposed merger with Scientific Games (SGMS) and the transactions contemplated by the merger agreement. The board considered a range of factors before approving the merger agreement and recommending that Bally’s stockholders vote to approve it. Merger consideration The $83.30 per share offered to holders of Bally’s common stock […]

Airline passenger yield is the average airfare per passenger per mile. It is calculated by dividing the passenger revenue by revenue passenger miles (or RPM).

Bally provided internal financial projections estimating its unlevered free cash flow to help Macquarie Capital assess its discounted cash flow.

For 3Q17, JetBlue is expecting unit costs (also known as cost per available seat mile or CASM-ex) to rise in the range of 1.5% to 3.5%.

The management has given an operating profit margin guidance of more than 10% for 2014—due to the poor performance of Pizza Hut in the U.S., the management has cut its full-year earnings guidance.

At the end of the second quarter, Fiesta Restaurant Group’s net income increased 87.4% to $9.3 million, compared to net income of $5 million in 2Q13.

United Continental saw $912 million in 4Q15 savings as its fuel bill fell by 36% compared to a year ago.

All of this outlook depends on the actual policies implemented by the Trump government, which remain to be seen.

With over 38,000 restaurants, McDonald’s doesn’t make any of its products. Instead, it contracts with suppliers to meet its massive requirements.

On December 22, 2014, CZR and Caesars Acquisition Company (CACQ) entered into a definitive agreement to merge in an all-stock transaction.

Scientific Games, WMS Industries, and Bally each have unique portfolios with a wide variety of player preferences that could help drive revenues.

Macquarie Capital’s opinion was provided to Bally’s board of directors in connection with its financial evaluation of the merger consideration.

The executive management team of SGMS includes President and CEO Gavin Isaacs and Executive Vice President and CFO Scott Schweinfurth.

Scientific Games shares fell by ~15% in the three days following the merger. That’s typical when a company acquires another company for a premium.

Noodles & Company (or NDLS) has a few initiatives and tactics to drive short-term traffic. It also drives longer-term brand and customer loyalty building.

Noodles & Company (or NDLS) was founded in 1995. It’s a fast-casual restaurant chain that serves classic noodle and pasta dishes.

With the diverse menu that NDLS offers, the company launched its new catering program. Customers can place larger orders for groups from 20 to 300 people.

In August, the Restaurant Performance Index stood at 101.9, an increase of 1% from July, which was its first gain in three months.

Fiesta Restaurant Group Inc. (FRGI) owns, operates, and franchises two fast-casual restaurant brands, Pollo Tropical and Taco Cabana.

As of June 2014, Fiesta Restaurant Group owned 112 Pollo Tropical restaurants and 166 Taco Cabana restaurants.

For 2Q14, Fiesta’s total revenues recorded an increase of 9.4% to $154.2 million from $140.9 million in the corresponding quarter last year.

For the 19th consecutive quarter, Pollo Tropical has delivered positive comparable restaurant sales growth.

Scientific Games agreed to buy WMS Industries for $1.5 billion, emerging as a global supplier of lottery equipment and slot machines to casinos.

Fiesta’s partnership with food distributor PFG will allow the growing brands to share a national distribution system and freight consolidation.

New York City-based Scientific Games offers customers a fully integrated portfolio of technology, platforms, content, and services.

Now let’s look at certain key operating metrics used in the cruising industry to evaluate operational performance.

Despite health-related controversies, fast food companies such as McDonald’s maintain that they provide consumers with choice and convenience.

Family dining restaurants offer full table service. They’re similar to the casual-dining format, although most family dining restaurants don’t offer alcohol.

For 2018, analysts expect TripAdvisor to report non-hotel revenues of $449 million—YoY (year-over-year) growth of ~25%.

Analysts have provided “buy” recommendations on most of the stocks in the airline industry (PEJ).

Expedia (EXPE) is a leading online travel booking company that has relationships with over 200,000 hotel owners across 200 countries.

Expedia (EXPE) could be an intriguing stock to watch, according to Wall Street analysts’ latest ratings.

On November 9, most online travel agency shares fell after CNN Business reported deep concerns about the slowing Chinese economy.

Ctrip.com International (CTRP) posted strong third-quarter results yesterday.

Booking Holdings stock jumped over 6% in after-hours trading yesterday on its better-than-expected earnings outlook for the fourth quarter of 2018.

Delta Air Lines’ higher debt means a higher interest expense and a higher DE (debt-to-equity) ratio. Delta Air Lines’ current DE ratio is 0.69x.

April’s JOLTS data indicate that there were only 0.9 job seekers for every job available.

Delta Air Lines (DAL) and Aeromexico have been in partnership for one year as of May 8.

Delta Air Lines (DAL) announced its 1Q18 earnings on April 12, 2018.

Published on April 4, the ADP March jobs report offered a deeper insight into employment trends across different sectors in the US employment market.

As of March 15, 2018, the latest short interest data showed that Delta Air Lines’ short interest has increased since its 4Q17 earnings were announced.

On March 19, Delta Air Lines introduced nonstop service between El Paso, Texas, and Salt Lake City, Utah, starting on October 1, 2018.

The ADP February jobs report was published on March 7, 2018. It offered a deeper insight into the employment trends across different US sectors.

ADP releases a monthly report on US non-farm employment that contains changes to the level of hiring and employment across US sectors.

The Conference Board uses the average weekly unemployment claims as a key constituent of its LEI (Leading Economic Index).

The ADP January jobs report, which offers insight into employment trends, was published on January 31.

American Airlines (AAL) announced its 4Q17 earnings on January 25, 2018. It reported adjusted EPS (earnings per share) of $0.95, an increase of 3.3% YoY.

American Airlines Group’s (AAL) operating revenue fell 2% in 2016 before gaining 4% in 9M17.

American Airlines’ (AAL) revenue for 4Q17 is expected to be $10.54 billion—an increase of 7.80% on a year-over-year basis.

Second breach in two years On October 12, 2017, Hyatt revealed that its payment system had been breached. There was unauthorized access detected in 41 hotels in 11 countries, exposing customer credit card information at these locations. About 50% of these hotels were located in China. *Other affected countries and territories include Brazil, Colombia, Guam, Indonesia, […]

As per the latest JOLTS report, about 2.1 million Americans quit their jobs voluntarily in August, which was a decrease of 70,000 from the previous reading.

For 3Q17, American Airlines’ (AAL) earnings are expected to fall 14.8% YoY to $1.50 per share due to an 18.4% YoY decline in net profits.

As per the latest JOLTS report, about 3.2 million Americans quit their jobs voluntarily last month. This is an increase of 0.1 million from the previous month.

Load factor improves In August 2017, United Continental’s (UAL) utilization (load factor) fell 0.2 percent points. This fall was expected, as capacity growth for the month was higher than traffic growth. The load factor, the most commonly used measure of an airline’s capacity utilization, is calculated by multiplying capacity by traffic. A higher load factor […]

Utilization rising Delta Air Lines’ (DAL) traffic has outpaced its capacity growth for some time now. As a result, its utilization has improved over the past seven months. In August 2017, is utilization improved by 3.5% to 87.9%. As of August 2017, utilization had improved by 1.5% to 85.9% YTD (year-to-date). Outlook reduced Delta Air Lines’ unit revenue […]

Analysts seem to be favoring MGM Resorts (MGM) stock over the other major casinos. Of the 17 analysts tracking the stock, 16 of them recommend a “buy.”

A weakness in the Chinese economy could adversely affect the spending capacity of the Chinese people, which could lead to fewer visitors at Macao.

Capacity growth for the seven major airlines grew 6.9% year-over-year or YoY—higher than the average 4.6% YoY growth recorded in the first half of 2017.

Macao’s annual inflation as measured by the composite consumer price index rose 1.03% YoY (year-over-year) in July 2017.

For July 2017, visitor arrivals increased 4.4% YoY to 2.9 million visitors. However, on a month-over-month basis, visitor arrivals increased 22.7%.

For the first quarter of 2017, VIP gross gaming revenues rose 16.8% YoY (year-over-year) to MOP 35.6 billion.

Currently, both Alaska Air (ALK) and Southwest Airlines (LUV) are trading at industry-leading valuations of 6.8x their forward EV/EBITDA multiples.

Unit revenue or passenger revenue per available seat mile are the airline industry’s most-watched metric. It measures the efficiency of an airline’s operations.

US GDP growth bounced back in the second quarter of 2017, recording 2.6% year-over-year or YoY growth—slightly lower than the 2.7% YoY growth analysts had estimated.

Marriott’s RevPAR for 2Q17 rose 2.2% YoY in constant dollars across its worldwide properties. Its North America RevPAR rose 0.9% YoY in constant dollars.

For 2Q17, Marriott’s total fee revenues are expected to increase to $820 million–$835 million.

Analyst views According to Reuters, of the 22 analysts tracking Hyatt (H), three analysts (13.6%) have a “strong buy” rating on the stock, two analysts (9.1%) have a “buy” rating, 16 analysts (72.7%) have a “hold” rating, and one analyst (4.5%) has a “sell” rating. There are no “strong sell” ratings on the stock. Analyst […]

Analyst estimates In 2Q17, analysts expect Hyatt’s revenue to grow by 3.9% YoY (year-over-year) to $1.2 billion. Sales growth is expected to increase for the rest of the year. Sales are expected to grow 5.4% YoY to $1.1 billion in 3Q17, and 5.5% YoY to $1.2 billion in 4Q17. Hyatt is expected to see revenue […]

Out of the 15 analysts tracking JBLU, 13.3% have a “strong buy” rating on the stock.