Carnival FY 2Q17 Earnings Call Notes

Arnold Donald

Haven’t seen any impact from any terrorism incidents in Europe

Got it. So first of all, yes, absolutely, we haven’t been able to measure any kind of impact from the various geopolitical issues and events in Europe and that sort of thing. So we haven’t seen any lost momentum. We see strong momentum in the business all the way through, it’s very early to be talking about first-half of next year. But through the first-half of next year, we’re up on occupancy, up on pricing, against a very tough comparison, because obviously a strong year this year, strong year last year, so lot’s of momentum in the business for certain.

Going to be down a little in capacity in China next year

“So we will be down next year in China a little bit on capacity. And again, that’s not only about China, it’s much about opportunities around the world, because our philosophy is, we always want to optimize and what we generate from our ships. So – but I don’t – China long-term it’s going to be a huge market. We’re extremely excited about our partnership with CSFC that has moved along very nicely. We still have lots of work to do with the trade there in China with distribution system. But again, just please keep in mind, the industry is tiny there. I mean, we’re very, very, very small, and these little moves hopefully. Hopefully the fact that there is less capacity next year. We’ll create the opportunity for yield improvement in China hopefully. But you can’t evenguarantee that, because there’s still a B2B business. “

Vail Resorts FY 3Q16 Earnings Call Notes

Vail Resorts’ (MTN) CEO Rob Katz on Q3 2016 Results

Pass sales units up 29%

Pass sales through May 31, 2016 for the upcoming 2016/2017 U.S. ski season increased approximately 29% in units and approximately 34% in sales dollars as compared to the prior year period through June 2, 2015.

We get more intelligent every year

we are continuing to improve the way we target and segment and communicate to our guests and that gets more sophisticated, more — we’re just more intelligent every year as we learn more from the previous year and I think you’re seeing the combination of all that drive significant growth.

International sales solid but still impacted by dollar

International pass sales are totally solid, they are fine. We aren’t seeing anything concerning there. But, I would say we’re still very early to really understand the visitation dynamics for next year. I do think if you look backwards a year, the currency had really been — the U.S. dollar had been strengthening quite a bit in the whole run up to that season and it has appears to have stabilized a bit if not come down a little bit from where those ratios kind of bottomed out or peaked out or however you want to look at it. But, I do think that some of this will depend upon how the currencies move over the next couple of months. I think we may have a better sense of it in September certainly than in December but at this point, we aren’t seeing too many concerns. I think if anything, we think certainly we have some upside potential because we’ll be comping more challenging results from last year, but obviously there is external factors that will play into exactly how much upside we can actually generate.

We want to acquire where it makes an impact to the network overall

we don’t just want to acquire to acquire, we want to acquire resorts certainly where we think we can improve them, but much more importantly than that where we think that resort is very impactful had to our overall network.

Indications that summer travel will be robust

feel very, very positive in terms of overall summer visitation certainly, I think there’s a lot of indications that summer travel particularly car travel is going to be robust. We’re seeing a very strong visitation in the national park. I would imagine that will be true certainly for us in Grant Teton; I think that will be true in Rocky Mountain national park in Colorado as well. I have no doubt that will be true in Lake Tahoe. So, I think certainly summer visitation and summer tourism travel I think is in a good spot which bodes well for us.

Recruiting and retaining people is key

would say we think that given the strength of the economy and the strength of the economy and markets in our particular resorts, we think that retaining and recruiting talent and people in general all across our entire all of our properties is one of our most important priorities. I think labor costs this past year absolutely grew and were higher than if you looked at the previous year because we took on a number of initiatives in so many different area of our company whether it was wage, changes or bonuses to help incent and ensure that we feel like we are competitively paying all of our employees. And we absolutely assume that will continue for next year and that’s factored into our business plans and something that is really top of mind for us to make sure that we can continue to deliver the experience that we need to for our guests.

Michael Barkin

Thanks, Rob and good morning, everyone.
For the third quarter, resort net revenue was $645.7 million up 13.9% from the prior year period and resort reported EBITDA was $306.6 million an increase of 14.7% over the prior year period. These increases were driven by strong visitation and robust guest spending on lift products as well as in our ancillary businesses across all of our western resorts.

Marriott 4Q15 Earnings Call Notes

Acquired Starwood

“the biggest Marriott news in 2015 was our announced acquisition of Starwood. The transaction is on track and we expect to close around mid-year 2016.”

Not going to try to put everyone on the same property management systems

“it won’t surprise you to know there are many systems. On the property level, the property management systems, they both have the same core engine running them. And I think actually unlike in prior deals, we will not try and move all of one portfolio of hotels to some other property management system from the one that they’ve got, and instead find a way to make those systems communicate above the property in a way that hopefully will be much easier.”

Anxiety in the marketplace leads us to forecast more conservatively

“Let me just talk a little bit more about the philosophy around our RevPAR guidance from 3% to 5% for 2016 which has been noted obviously in a number of early reports that have come out of that, that’s a point lower than what we thought a quarter ago. What’s changed between then and now, I think, we look at a world in which there’s obviously more anxiety in the marketplace. There’s a bit more anxiety about what GDP growth is going to look like in 2016 and as a consequence, we’ve been a bit more conservative in the forecast that we provided.”

The sky is not falling when we look at our data

“what we see is, again, reasonably encouraging. The sky is not falling when we look at our data. That is profoundly the case when you look at group business but it is also very much the case when you look at transient business. We mentioned the 2.5% transient demand in January. We look at U.S. system-wide RevPAR numbers and they were up a hair over 3% in the month of January…all things considered, that’s not bad and we’d expect February to be better.”

Not seeing any cause for concern in group bookings

“No, we’re not. The only thing we’ve seen and we mentioned this in the prepared remarks is we are seeing a bit of a lengthening of the group booking window. So we talked about how in the fourth quarter we had an increase in group bookings for all future periods of about 10%. Actually, when you look at that by year, 2016, 2017 and 2018, the weakest booking year-over-year would be 2016. That is not a function of a slowdown in demand. That is a function of the fact that bookings are already up 7%, and there’s not that much space left.”

China doing much better than you read in the papers

“Let me start with the Asia piece, particularly China. Obviously, we’ve been bombarded with news about the Chinese economy over the last couple of quarters. Most of it not very positive in what we read in the papers here. And obviously a big chunk of that is related to their manufacturing and export business. To some extent, it’s related to their infrastructure spending, and to some extent to their financial markets and financial institutions. I think underneath all of that you’ve got China continuing to move towards a consumer economy. You’ve got a growing middle class that has resources to expend on things other than bare necessities. And as a consequence, I think we see in our industry and certainly at Marriott, stronger performance in China than you might expect from reading that newspaper.”

What we see so far in 2016 makes us positive about China

“Obviously, it is a very big market. And so the performance in different cities will vary from place to place. We had some of the numbers in our prepared remarks. Shanghai continues to be a very strong market all the way through 2015. Hong Kong, by contrast, has been a market which has been under pressure, in part because of the political implications of some of the street protests and other decisions that are made that derive from that. But then you look at other markets like Japan. China visitation to Japan was up something like 25% or 30% last year, if memory serves. And it is driving great performance in our Japanese hotels. And you see that sort of growth in outbound China business continuing to perform really well. And what we see so far in 2016 continues to make us quite positive about China.”

Kathleen Kelly Oberg – Chief Financial Officer & Executive VP

In most cases it’s so expensive to hedge currencies that you’re better off with the risk

“I mean, in terms of – no, in terms of the debt that Marriott takes on, no. I think we’re always looking at kind of new ideas on the hedging side and hedging the fees but to be quite honest in many cases the costs of those hedge are so prohibitive that it’s really better off to stick with the risk.”

Not expecting the same volatility in 2016 as 2015

“Now, I will also say that we do – we are hopeful that the dollar doesn’t strengthen at the same kind of rate that it did in 2015 in 2016 and I think our forecast does take into consideration that we’re not expecting quite the same level.”

Carnival FY 4Q15 Earnings Call Notes

Carnival’s (CCL) CEO Arnold Donald on Q4 2015 Results

Don’t see any reason to change our fuel hedging strategies

“but so far, with forward pricing, we haven’t seen an opportunity to do anything that we think makes sense. Obviously, nobody really knows, as is evidenced by what happened the last couple of years. But we constantly review it. But at this time, we see no reason to do anything different.’

Excited about China

“I think, first of all, as you are well aware, there are over 100 million outbound tourists in China already and today, cruise is capturing less than a million of those tourists and that number is going to grow dramatically in terms of the total number of outbound tourists and the fit for cruise is far greater than, less than 1%. So there’s plenty of demand.”

“so we are very excited about China. It is today only 5% of our capacity. There may be discontinuities at times as you try to get distribution lined up with that pent up demand, but it’s all, from our perspective, very manageable. But a very great market, a strong future market, a contributing market today to the bottom line and to our whole approach on developing relative scarcity around the world.”

David Bernstein

What happens to fuel and currency will have a big impact on profits

“And really the fourth is fuel and currency. I mean, if you’ve got a crystal ball that we could use, I would love to have it, but I will tell you, we take the current spot price of fuel and the current currency rates and we bake them in and they do change.’

Vail Resorts FY 4Q15 Earnings Call Notes

Vail Resorts’ (MTN) CEO Rob Katz on FY Q4 2015 Results

Not seeing any softening in consumer

“I mean again at this point, we are not seeing any softening in consumer interest. I think we had a fairly strong summer season as well. I did not see that – we are not seeing that in our bookings or in our pass sales.”

We’re better positioned than the rest of the industry because they are dealing with demand and supply, we aren’t dealing with supply

I think one of the benefits that we have obviously is other parts of the travel industry one of the things they are struggling with is not just the demand side, but the supply side. And so as people build new rooms obviously that starts to bring down some of their metrics and one of the benefits we have right now is that there has not been any new supply added to the mountain resort industry”

Tahoe down, but less than expected. Bay Area economy there is still strong

“in Tahoe where I think obviously we had more modest expectations, because of the snowfall last year, I think even though we are seeing declines, they are less than what we would have expected, which I think reflects the commitment and the loyalty that people have there, I am sure reflects in part the fact that there is an expectation at this point that this season could be relatively strong. But I think skiers and riders out in that market Bay Area the economy there is still strong. I think they know that in a huge season they want to have that pass and they want to have that connection and I think we are seeing that play out right now.”

Interestingly, Mexico has been the most resilient market to currency shifts (perhaps used to it?)

“what I would say is obviously the U.S. dollar is strong versus almost every market. So I think it impacts every market. I think we – but how that translates into advanced bookings has been we have seen differences. So I think with Canada and the UK obviously little bit more price sensitive guests. And I would say that we are seeing more sluggish bookings from those two markets, more sluggish pass sales in those two markets. And yet we are seeing strength in the Mexican market. So I can’t really quantify that, because we don’t give specific details on individual markets. But I would say, it’s not that surprising to us. I think when we have talked about currency in the past, I think we have said that we felt broadly the Latin American market was more resilient, a little bit more protected I think from some of those gyrations where I think certainly Canada and the UK and even Australia is more impacted by them.”

Didn’t see much impact from economic weakness in Australia

” think the currency impact is probably the bigger one. Candidly, we are not seeing the – yet we are not seeing or can’t pick out I would say the impact of the Australian economy in the numbers that we are seeing. I would also say that obviously the economy over the winter in Australia, which was July and August we saw pretty strong results at Perisher and did not see any impact from any kind of economic sluggishness in Australia.”

Michael Barkin – Chief Financial Officer

The US economy remains robust, especially for upper income travelers

“The U.S. economy remains robust, particularly for domestic upper income vacation travelers who produce over 85% of our destination visitation. We have seen strong demand for the upcoming season with the successful season pass sales to-date and from lodging bookings, which have been strong across our resorts.”

Carnival FY 3Q15 Earnings Call Notes

Arnold W. Donald – President and CEO

Public relations effort is outperforming

“Our public relations effort continues to outperform. We generated positive media impressions in the first half of this year that almost equalled our positive impressions for all of 2014, which were already well above the historical highs. In the first half, our brands generated 75% of the entire cruise industry’s positive coverage, and as that even includes the recent announcement regarding Cuba, another industry first by our Company.”

Brands separate but synergistic

“So the reality here is, our brands are very different from each other, they compete in different typographic markets, but they can learn from each other and common itineraries and common regions of the world and intelligence in terms of what’s happening with booking curves and reactions, especially since they all tend to extend chasing newer cruise than chasing different newer cruise individuals because of the typographic profile, but they are all chasing newer cruise. So we’ve had benefit to date which is why we have had some of the outstanding operating results we’ve had and this too will allow us to capture even more benefit, regardless of the environment.”

Book now if you are thinking about booking a cruise for next year

“I think the simplest statement we can make is for those who are considering cruising next year is, better to book now, because this is the best time for them to book.”

China yields may be down, but we’re growing our capacity

“China yields may come down a bit but they’re going to be return accretive because of the significant increase in capacity.”

No falloff in demand related to the stock market

“We did not see any falloff in demand related to stock market or general economic fluctuations, none whatsoever.”

No plans to change energy hedging practices

“At this point in time we have seen no advantage to unwinding those collars or anything to that effect. When we looked at it once earlier this year, we would take them and then if we had done it, we would have lost on both ends, unwinding and then setting new collars. And so at this point wouldn’t have any particular plans to change but we review it constantly.”

David Bernstein – CFO

Expecting a good year in 2016

“I want to provide you with some color on 2016. Although it’s early, 2016 appears to be shaping up to be another good year. We are forecasting capacity to increase 3.7%. For 2016, we are expecting to see constant currency net revenue yield improvement. I will provide guidance on the December call when we have more visibility.”

Europe is probably the most challenging region currently

“Overall, Continental Europe is probably more challenging. When you think about all of the economic difficulties and the geopolitical issues and the growing refugee concerns, that’s the area that has had the most challenges in terms of pricing for 2016”

Carnival Cruise FY 2Q15 Earnings Call Notes

Building next generation ships

“we finalized the contract with Meyer to build four, state-of-the-art ships designed to provide an exceptional vacation experience tailored to our guest’s preferences.

This was part of our largest strategic partnership announced in March with Meyer in both Germany and Finland and with Fincantieri area in Italy to build nine ships over four year period from 2019 to 2022 and keeping with our measured capacity growth strategy.

These next generation ships will be the most efficient ever build with a total guest capacity of 6,600 through an innovative design pairing incredible cabins with even more innovative use of the ship public spaces.

Adding price per berth, in line with our existing order book, these ships will significantly enhance the return profile of our fleet. Moreover these next generation ships will pioneer a new era in the use of sustainable fuels through our green cruising designs, representing the first cruise ships to be powered FC by LNG”

A lot of macroeconomic difficulties in Europe

“As we had said before in the notes, there is a lot of macroeconomic difficulties in Europe. The economy seems to be bouncing along at the bottom”

Biggest competition is land based travel because we get 1/2 of all people who cruise

“First of all for us our business is pretty straightforward and so we consider our competition to be land based vacation. We have very differentiated product offerings versus the other cruise companies.”

“One of every two people cruise in the world, cruise with us and anything that generates interest in cruising automatically helps us and frankly it helps the other companies as well. So that is the focus of it and we think we’re seeing some success, there are some variables in any given year in any given market at any given time.”

First time cruisers up a lot especially from China

“first time cruisers are up dramatically, now there is a number of things that contribute to that beyond this year, I guess last year we were 3.4 million first time cruisers whereas the year prior we were like something like 2.7 or 2.8 or something. But there are number of things that drive that, number one we have got lot of first time cruisers elsewhere in China”

Industry capacity growing in 4-5% range

“Yes I think first of all overall the capacity growth for the industry is in the 4% to 5% range and our capacity growth along with vessels that we take out of service is going to be less than that. So we are totally focused on measured capacity growth.”

We’re still low penetrated in overall vacation market

“And we feel that with China in particular but even without China and the existing markets that that level of growth as long as we’re creating demand because we’re still relatively low penetrated as an industry as cruise industry in the overall vacation market that there is ample opportunity to create the relative scarcity to get yields off over time and to have them be up and still the greatest vacation value there is while providing the greatest vacation experience there.”

Vail Resorts FY 3Q15 Earnings Call Notes

If anyone has a right to complain about weather I suppose it’s these guys

“Given the severe weather challenges this year, our expectation that we will deliver resort-reported EBITDA within the original guidance range issued last September is something we are quite proud of, and result of the experience we provide our high-end guests and the stability we have been able to create in our business model.”

EBITDA of 267m

“For the third quarter, resort net revenue was $566.9 million, up 7.6% from the prior year period. And resort reported EBITDA was $267.3 million, an increase of 10.9% over the prior year. ”

Close out ski season onto capital plan

“While we have closed out the 2014-2015 ski season, we are already looking ahead to next year. Our capital plan for 2015 is well underway. In Park City, our $50 million upgrade is one of the most transformational efforts ever taken on in the ski industry and will result in a combined resort for the upcoming season that will provide guests with the chance to ski at the largest mountain resort by acreage in the United States.”

Particularly strong for upper income vacation travel

“As we look ahead towards fiscal 2016, we remain incredibly optimistic with a great start on season pass sales, new upgrades to our resorts and an economic environment that remains particularly strong for upper income vacation travel.”

We do think we need to remain competitive on wages

“We do think in the current climate, we will need to remain competitive on wages and benefits for our employees, which while certainly putting pressure on costs is something we can accomplish and stay on track with our long-term growth objectives.”

Looking for more acquisitions OUS

“The ski industry outside of the U.S. is actually quite large and so there are many, many potential targets. I would say we’re very disciplined and very thoughtful about looking for the right opportunity. A lot of that comes down to the country that it’s in, the markets that it serves, its position plus how it impact overall all of our resorts here in the United States as well. I think obviously with the Perisher acquisition, it could make a little bit more interesting other opportunities in Asia.”

We’re big believers in not rushing

“That said, I think the ski business is one where it takes a long time to put any kind of transaction together and we’re big believers in not rushing. And so I would say that we – the Perisher acquisition if anything has made other opportunities more interesting, that said, again, we don’t see ourselves in a rush whatsoever. Our goal really is to just keep making the guest network that we have that much stronger and more powerful in terms of driving revenue increases.”

There are lots of resorts around the world. We’re willing to wait for years to be able to purchase the right ones

“I think there is 500 ski resorts in the United States, for instance, but – we are incredibly pinpoint. So in other words, there are truly hundreds and hundreds of ski resorts, thousands around the world and so that’s – what I’d say is this kind of larger number is not as relevant and not the way we approach it. We’re very focused on what I’d call a handful, right, in each country of potential opportunities and then even within that, right, a primary opportunity that we think is the best.

And our goal is to wait for even if it takes years truly to wait for that, because in the ski industry the good news is you can’t build any other resorts. It also takes a long time to reshape a resort. So waiting for the right one we think is what helped drive our success. And so yes, there’s – I won’t share a hard number because I don’t think that is relevant right now, but we are focused, as we said earlier, certainly in Asia, in North America and in Europe.’

On wage stuff, we’re just highlighting something that people know

“I think we just want to highlight something that I think everybody knows, which is that the market for jobs is obviously getting more competitive and our own success obviously means that within our resorts and in our company, it is more competitive to get talent. And talent is the most critical thing to help drive our company and that’s something that we have to stay in touch with as well.”

Carnival Cruises FY 1Q15 Earnings Call Notes

Capacity up 2%

“Our capacity increased almost 2%. The North American brands were up 3%, while the European, Australia and Asian brands also known as our EAA brands, were flat. Our total net revenue yields in the first quarter were up 2%.’

Fuel hedges can go against you too

“Your point about the fuel, yes, the fuel price did move. But one of the things the fuel collars or the fuel derivatives offset a big chunk of the fuel price movement. And the reason that that happened was while the brent fell, our fuel price did not fall by as much as brent because when we did our December guidance, the [crack] [ph] spread was 75%, roughly speaking and at this point in time it’s 81%. So brent fell by far more, 6% or so more, than the price of the fuel that we purchase and so that’s why it wasn’t a perfect 50% offset there.”

It’s tough to measure advertising’s direct impact

“the reality is that following advertising’s direct impact is always a difficult challenge. What we can measure is the level of communication. Web site hits, impressions, conversations around the brand. That we can measure. And so we know we had a lot more conversations generated about cruising. There is no question about that. We would hope that over time that translates to greater demand and ultimately bookings and higher yield”

If you give your customer what they want they’ll buy it

“t’s not so much change in consumer behavior as much as us listening to our guests and giving them more of what they want. And if you give them what they want, they will buy it.”