PowerShares Dynamic Leisure & Entmnt ETF

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?

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

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

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.

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

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, 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%.

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.

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.

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.

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.

Carnival is among the most profitable and financially strong leisure travel companies in the world. It provides leisure travel to all major cruise destinations across the globe.

Delta (DAL) saw average traffic of about 57.6 million passenger miles for the quarter, a 2.1% year-over-year (or YoY) improvement.

For 2Q17, analysts expect American Airlines’ (AAL) revenue to record a rise of 5.8% year-over-year (or YoY) to $10.9 billion.

Delta Air Lines’ (DAL) 2Q17 EBITDA margin is expected to improve slightly to 22.8% as compared to 21.8% in 2Q16.

Delta Air Lines (DAL) plans to announce its second quarter earnings for 2017 on July 13.

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% […]

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% […]

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 […]

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 […]

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 […]

Airfares in 2016 Due to heavy price discounts by airlines, airfares fell ~5% YoY (year-over-year) in 2015. According to the latest data from the U.S. Department of Transportation, average domestic airfares continued to fall in 2016. According to the report, 4Q16 airfares fell 6.1% YoY to $347, compared with $369 in 4Q15. Airfares fell 8.8% […]

Analyzing airline load factors May continued to be a mixed bag for airlines, with volatile capacity utilization. Delta Air Lines (DAL), American Airlines (AAL), Alaska Airlines (ALK), and JetBlue Airways (JBLU) managed to grow their traffic at a higher pace than their capacity growth. As a result, their capacity utilization improved. Delta’s utilization improved by […]

Consumer spending Consumer spending accounts for almost two-thirds of the US economy. In 1Q17, consumer spending rose 0.3% YoY (year-over-year), the slowest pace seen since the fourth quarter of 2009. It is also significantly lower than the 3.5% YoY growth seen in 4Q16. The slow growth in consumer spending is due to low demand for […]

Only one analyst has upgraded Delta Air Lines (DAL) since it released its traffic data on Friday, June 2, 2017.

Delta Air Lines’ (DAL) total traffic grew at a significantly higher pace than its capacity. Capacity growth is a major driver for airlines.

Out of the 31 analysts tracking Priceline (PCLN), seven analysts have a “strong buy” recommendation on the stock, and 18 analysts have a “buy” recommendation on the stock.

For 1Q17, analysts are estimating Priceline’s (PCLN) revenues to grow 13.8% year-over-year to $2.4 billion, lower than the 16.7% YoY growth seen in 1Q16.

Out of the 17 analysts tracking Southwest Airlines (LUV), 35.3% of analysts have a “strong buy” rating on the stock.

Southwest Airlines (LUV) has been paying dividends consistently since 1980.

Southwest Airlines (LUV) reported a significant earnings decline for the first quarter of 2017, though it continued to maintain its position as one of America’s most profitable airlines.

The hotel sector is capital intensive, and companies in the industry normally carry high debt.

Margins are expected to be volatile in 2017. For the first quarter of the year, Delta Air Lines’ (DAL) margin is expected to fall 16.7% as compared to 23.6% in 1Q16.

Delta Air Lines (DAL) is expected to announce its 1Q17 earnings on April 12, 2017.

Frontier Airlines earned 42% of its revenue from ancillary fees or non-ticket revenue in 2016—a significant rise compared to 25% in 2015.

In 4Q16, Delta Air Lines (DAL) had the highest FCF yield of 9.9%. JetBlue Airways (JBLU) had the second-highest FCF yield of 8.7%.

In 4Q16, Delta Air Lines’s utilization fell 0.1% to 85.1%, and United Continental’s utilization fell 0.4% to 82.4%.

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 […]

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

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.

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 […]

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

The prime issue that has led to a crisis in regional airlines is that the regional players pay much less than their legacy peers, even when the regional sector accounts for half or more of all flying.

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.

The airline industry is cyclical, which means that its business depends on the country’s economic growth. Most analysts have revised their GDP estimates downward, resulting in a consensus estimate of 2.9% YoY growth.

While most of the airlines that are suffering from the labor crunch are mid-sized carriers, the issue is a potential threat for the large carriers as well.

After an improvement in Delta Air Lines’ margins (DAL) in 1Q16, analysts are expecting EBITDA margins to improve in 2Q16 as well to 26% as compared to 21% in 2Q15.

Passenger yield is the average fare per passenger per mile. It’s calculated by dividing passenger revenue by revenue passenger miles (or RPM).

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

American Airlines’ AAdvantage frequent flyer program is one of the largest and oldest card programs in the industry. The airline recently changed it from a mileage-based to a revenue-based model.

In 2014 and 2015, American Airlines (AAL) and the entire airline industry experienced historically high profitability due to the extreme decline in fuel costs.

American Airlines’ (AAL) capacity growth is one of the slowest in the industry. However, it has the highest capacity among its peers.

In this part of the series, we’ll look at the main services and categories that add to American Airlines’ (AAL) revenues. The major component of revenues still comes from airfares.

Delta Air Lines saw an average traffic of about 47.7 million miles for the quarter—a 3.2% YoY growth, with stronger demand in regional Latin America.

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.

According to Bloomberg consensus, 70.6% of the 12 analysts tracking United Continental Holdings (UAL) have given the stock a “buy” recommendation. About 29.4% have given it a “hold” rating.

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).

In February 2016, the airline capacity of the eight major airlines exceeded their traffic growth by an average of 2%.

The US airline industry is expected to set a new record in terms of the number of passengers flying this spring.

On March 21, Starwood and Marriott amended their merger agreement to top Anbang’s offer. The amended merger spread is trading at an annualized return of 1.3%.

On March 14, Starwood Hotels & Resorts Worldwide (HOT) announced that it received an unsolicited takeover approach from a consortium of investors led by China’s Anbang Insurance Group.

Since fuel is a major input cost for airlines, airline companies have benefited immensely from the crude oil slump.

Major US airline capacity increased by 9.6% year-over-year (or YoY) in January 2016, slightly lower than the 10% average growth seen in 2015.