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Nomura Securities on American Gaming and Lodging: Q1 Growth In-line; Vegas Improves

May 31, 2012 8:37 AM EDT Send to a Friend
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Nomura Securities on American Gaming and Lodging: Q1 Growth In-line; Vegas Improves

Analyst, Harry Curtis, said, "2Q RevPAR growth should be above 7%, roughly in line with 1Q results, according to our proprietary rate survey. QTD, our survey indicates RevPAR is up 7.6% in urban locations, about 90bps below STR’s QTD urban figure of +8.5%."

"Our forward rate data support our positive fundamental outlook on the group. We continue to expect 2012 RevPAR growth of 7%-8% for stocks with exposure to upper upscale hotels, such as Marriott (NYSE: MAR) (Buy), Starwood (NYSE: HOT) (Neutral), and Hyatt (NYSE: H) (Neutral)."

"We expect Strip 2Q ADR to be up mid single digit, so our 2Q ADR growth assumptions for MGM (NYSE: MGM) (+6%), Laas Vagas Sands (NYSE: LVS) (+2%) and Wynn (Nasdaq; WYNN) (+6%) should be reasonable (see Fig 5). Per our survey, pricing is up an encouraging 8.8% for Ceasar (NYSR: CZR) (NR) in the 2Q. If group bookings build and in-the-quarter-for-the-quarter bookings are stronger, there could be some upside to our 2Q MGM, WYNN and LVS Las Vegas EBITDA estimates."




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