Deutsche Bank Highlights Themes In Gaming And Lodging Sector

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Carlo Santarelli of Deutsche Bank hosted companies from the Gaming, Lodging and Leisure space at a recent conference and came away with several key themes.
Large Cap Gaming Takeaways
According to Santarelli's discussions with
Las Vegas SandsLVS
and
MGM Resorts'MGM
management teams, Macau trends are “uncertain” but there are no new material points of caution to worry about. Santarelli notes that the smoking in Macau casinos is showing an impact that is more material than what several companies stated during their third quarter conference calls. The analyst adds that mass trends (which were down eight percent in October) are almost entirely attributed to the migration of VIP customers to premium mass. The analyst also adds that the reclassification of tables are unlikely to have had a meaningful impact on October's mass revenue result.
Lodging Takeaways
Santarelli noted an “enhanced focus on strategic recycling of capital” to be a major takeaway from discussions with companies. The analyst adds that C-Corps remain focused on monetizing assets at “opportunistic” prices while pursuing “asset light growth.” Most companies Santarelli spoke to disclosed that the Middle East and Asia are markets “ripe” for expansion. In addition, REITs are “increasingly willing” sellers of non-core hotels in the context of a tax friendly 1031 exchange into properties that have higher absolute revenue per average room and an opportunity to “aggressively” asset manage.
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Posted In: NewsCarlo SantarelliCasinos & GamingConsumer DiscretionaryLas Vegas SandsMacaumgm resortsREIT
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