Summit Notebook

Exclusive outtakes from industry leaders

That’s rich. I meant the wine.

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Jeffrey Rubin

What do gold and wine have in common?

Price.

Well, too high of a high price, according to Jeffrey Rubin, director of research at Birinyi Associates, the stock market research and money management firm.

Rubin told the Reuters Investment Outlook Summit on Tuesday that he thought gold prices were “certainly a little frothy” at current levels and that he would rather be a buyer of the gold miners such as Newmont Mining Corp, Barrick Gold Corp, or Freeport-McMoRan Copper and Gold Inc. Gold hit an all-time high  above $1,250 an ounce on Tuesday as investors piled in due to fears that European credit contagion could lead to a double-dip recession.

Rubin isn’t expecting a double-dip U.S. recession, saying the chances are slim. He also felt stock prices were likely near a bottom. Not so for the price of a wine? A good year is already priced in, so to speak.

In the spirit of austerity, we asked Rubin what personal spending he might curtail. For a wine collector with a 1,500 bottle collection, the answer was bitter.

Ritholtz: I zig when everybody zags

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INVESTMENT-SUMMIT/RITHOLTZ

The U.S. economy is experiencing an ongoing but slow recovery, says Barry Ritholtz, director of equity research at Fusion IQ. But that’s not stopping him from enjoying discounted prices in a low-inflation environment, at least when it comes to his personal spending habits. The world is on sale if you’ve got the money to spend, he told the Reuters Investment Outlook summit in New York when asked, for example, if he might spend less while on a vacation or forego a purchase or two.

“I am an enormous counter-cyclical spender. At the top of the bull market I don’t want to buy anything. I am a seller into a bull market. We have been buying a ton of stuff over the past year. We got two new cars long before the May…. so we picked up two new cars. We’re doing work on the house. We’re adding a kitchen. I got my wife a very lovely birthday gift. She got me a very lovely birthday gift. We’ve been buying artwork. We’ve buying jewelry. I love to buy stuff when it is on sale. I hate to buy top dollar for it.

Are the days of flying business and 4-star hotels over for biz travelers?

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Are flying coach and staying at budget hotels the “new normal” for businesspeople who travel for work? If so, what does it mean for airlines, hotels and casinos still trying to recover from the economic downturn? Chris Woronka, Senior Gaming, Lodging and Leisure Analyst at Deutsche Bank Securities shares his thoughts with us on what’s in store for the Travel and Leisure Industry in 2010. Will the industry once again be flying high? Or, will the prospects for a better year ahead get grounded?

2010 Travel and Leisure Industry Outlook

Will the travel & leisure industry bounce back in 2010?

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- Be it through optional newspaper delivery, a fee for blankets, or shuttered restaurants, travel and leisure companies have had to trim costs creatively as the recession hurt revenues and profits.  The sector has recently been buoyed by expectations of recovery amid signs that business travel demand is starting to rebound.  But discounted airfares and hotel rates and volatile fuel prices pose challenges to profitability. Room rates at hotels remain under pressure, while casino operators are looking to Asia to spur growth as prime U.S. destinations such as Las Vegas struggle to rebound.  And airlines, which have cut jobs and reduced capacity in the past two years as the economic downturn battered demand, face new security concerns that also could slow recovery.  Executives of some of the world’s biggest and best-known airlines, hotel and casino companies will address these and other issues at the Reuters Travel and Leisure Summit, to be held in New York from Feb. 22-24.

Audio – Everybody loves a winner in Vegas, baby!

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It seems that any sentence about Las Vegas, the people who work there or the stocks of the companies that run the big casinos ends better with the word “baby”. It’s almost like you can hear Frank saying it to Dino on their way into some smoky, after-hours cocktail party.

So, even though Bill Lerner, casino and gaming analyst at Deutsche Bank didn’t exactly end his comments on casino stock picks like Sinatra might have … well, it’s Vegas, baby!

Audio – Las Vegas mogul defends fun city

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By Tim Hepher 

Las Vegas casino legend Sheldon Adelson launched a quest for America’s most boring city on Tuesday in a comeback to President Barack Obama’s criticism of bankers who hold meetings in the famous gaming capital.
    
Obama last month warned companies that get bailout cash against spending it on activities potentially seen as perks — sparking a row with hotel and resort operators who say they are already struggling to fill rooms and may have to cut jobs.
    
“The good news is that Las Vegas has become a synonym for a good time for adults. Let me not say adults, I’ll say grown-ups, I don’t want to give the wrong impression,” Adelson, majority owner of casino operator Las Vegas Sands, said.
    
“The bad news is that because it is a place for a good time, President Obama says that he doesn’t want taxpayer’s money to go there,” Adelson told the Reuters Travel and Leisure Summit. 
    
“But I’m going to conduct a survey and I’m going to provide a prize for people who will submit the name of the worst city in the country to go to, where people can enjoy it the least. Because that’s the alternative. The alternative is you go to a place where you enjoy, or you go to to a place you don’t enjoy.”
    
The self-made billionaire, who tore down the original Sands to build the Venetian Resort complete with canals, and brought business conventions to Las Vegas, declined to nominate places for his ‘dive prize’ but took a swipe at Obama’s home town.
    
“Look, Chicago has got nine casinos. Now, God forbid if they hold a convention there someone should go to one of those casinos and enjoy themselves. God forbid. And then they’d say ‘Oh I can’t go there’,” he said.

A scandal over perks erupted in October after insurer AIG flew top brokers and executives to a Southern California resort at a cost of $440,000 shortly after it received an $85 billion government bailout.
     
“You can’t take a trip to Las Vegas or down to the Super Bowl on the taxpayers’ dime,” Obama commented last month.

Audio – Bad is bad

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Trying to compare one recession or economic downswing to another is a little like trying to decide which hurricane was the worst.

I mean, if you were sitting in the middle of Hurricane Katrina, it’s not going to matter too much if Hurricane Hugo’s winds were 10 miles an hour faster. They both weren’t a lot of fun.

Audio – Air France-KLM CEO sees some unfriendly skies ahead

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The state of the airline industry and travel overall is not poised for a rapid takeoff in 2009 and looks like it will remain in rough shape until next year, said Pierre-Henri Gourgeon, chief executive of Air France-KLM, on Monday at the Reuters Travel and Leisure Summit.

The head of Europe’s largest airline, who became CEO in January, said he was unsure when things would turn around, but warned that both passenger and cargo metrics were down for the airline.

Audio – And then there were two?

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Priceline.com CEO Jeff Boyd told the Reuters Travel and Leisure Summit in New York that he thinks that at least two out of the four players in the online travel sector – Priceline, Orbitz, Travelocity and Expedia – could be in a position for either an IPO or a sale once the economy turns up.

“I think that the most important fact there is that two of the major players are owned by private equity,” he said. ”Orbitz is controlled by Blackstone. And Travelocity and Sabre Group are controlled by TPG and Silver Lake Partners. And what that means is eventually they will be looking for a way to monetize those private equity investments, and there’s two ways of doing it.

Welcome to the Travel and Leisure Summit 2009

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The travel and leisure industry is facing its worst downturn since 2001, as the recession eats away at companies’ travel budgets and forces individuals to cancel trips. Airlines are planning a drastic dip in capacity as demand for flights evaporates, and hotels and casinos are doing their best to adapt to the new reality after an unprecedented three-year boom. Already two casino operators have filed for bankruptcy and more may follow.
 
Chief executives of some of the world’s foremost airlines, hotel and casino companies will address the economic challenges and how they plan to survive them at Reuters Travel and Leisure Summit, to be held in New York, on March 2-4, 2009.
 
The Summit will generate a series of exclusive interviews and articles from our team of expert reporters, as well as regular blog postings and online video.

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