Ben Chaiken

Ben Chaiken inquired about the company's customer demographics, specifically if the 40% of customers aged 65 and older was a company-wide or Nevada-only figure. He also asked about the expected impact of the new tax legislation ('one big beautiful bill') on Midwest and South customers, and if there were concerns about SNAP changes.

Answer

President and CEO Keith Smith clarified that the 40% of customers aged 65 and older was a company-wide figure. He stated that both Nevada and Midwest consumers are expected to receive significant benefits from the tax legislation, with Southern Nevada potentially seeing an outsized benefit due to its unique demographics. Keith Smith confirmed that the company is not concerned about SNAP changes impacting customer cohorts. Regarding Suncoast, Keith Smith noted the project completes end of Q3 2026, with minimal disruption observed so far, and CFO Josh Hirsberg added that the property has performed well despite construction, making it difficult to quantify specific impacts.

Ben Chaiken asked for clarification on whether the '40% of customer base 65 and older' comment was company-wide or specific to Nevada. He also inquired about the expected impact of the 'one big beautiful bill' (tax legislation) on Midwest and South customers, considering potential SALT and SNAP changes. Additionally, he asked for a quantification of the Suncoast margin disruption in Q4 2025.

Answer

President and CEO Keith Smith confirmed the 40% 65+ customer base was a company-wide figure. He expected both Nevada and Midwest consumers to benefit significantly from the tax bill, with Southern Nevada receiving an 'outsized benefit' due to its unique demographics. Mr. Smith also confirmed no concerns regarding SNAP changes. Regarding Suncoast, Mr. Smith noted the project completes in Q3 2026. CFO Josh Hirsberg added that the disruption has been 'minimal,' with the property performing well, making it difficult to quantify the exact impact.

Ben Chaiken asked about the prediction market launch, specifically how DraftKings thinks about investment caps in absolute dollars compared to an OSB launch, and how they determine the appropriate aperture for targeting customers.

Answer

Jason Robins, Co-founder and CEO of DraftKings, stated that the approach for prediction markets will be similar to OSB but with much shorter payback periods and even more conservatism due to a lack of internal data. While external data provides some guidance, they need their own real data to validate models before leaning in. He couldn't provide an absolute number for investment but reiterated seeking materially shorter payback periods than the three-year target for OSB/iGaming.

Ben Chaiken asked about DraftKings' launch strategy for prediction markets in the 50% of the country that are non-OSB states, specifically regarding investment caps in absolute dollars compared to an OSB launch, and how to target customers and determine the appropriate "aperture."

Answer

Jason Robins, Co-founder and CEO of DraftKings, stated that the approach for prediction markets will be similar to OSB but with much shorter payback periods and even more conservatism due to a lack of internal data. He noted that while external data provides a model, real internal data is needed to validate it before leaning in. Mr. Robins confirmed that while an absolute number for investment caps cannot be shared, the payback periods will be "materially less" than the three-year target for OSB and iGaming.

Ben Chaiken of Mizuho asked if DraftKings envisions accepting cryptocurrency as a payment form and whether external marketing spend is increasing in 2025, particularly for Jackpocket.

Answer

CEO Jason Robins responded that while the company is looking at cryptocurrency, its adoption is primarily a regulatory question, as few states currently permit it. He confirmed a slight increase in 2025 marketing spend, clarifying that the increase is allocated almost entirely to Jackpocket to capitalize on large jackpot opportunities, while core OSB and iGaming spend remains steady.

Ben Chaiken sought clarification on the comment regarding 2026 adjusted G&A being moderately below 2024 levels and the factors driving this reduction.

Answer

Joan Bottarini, CFO of Hyatt, confirmed that 2026 adjusted G&A is expected to be slightly down compared to 2024. She attributed this to organizational changes and efficiencies realized throughout the year, noting that these savings are achieved despite M&A activity and incremental resource additions.

Ben Chaiken sought clarification on Hyatt's adjusted G&A comment, specifically if the expected 2026 reduction was against the $445 million adjusted G&A for 2024, and what factors were driving this decrease.

Answer

Joan Bottarini, CFO, Hyatt, confirmed that the expectation for 2026 adjusted G&A is moderately below full year 2024, despite inflation and acquisition costs. She attributed this to organizational changes and other realized efficiencies throughout the year, noting that the company is still in the planning process for 2026.

Ben Chaiken asked for insights into Red Rock Resorts' free cash flow conversion (EBITDA to FCF) for 2026, given the anticipated capital outlays. He also sought additional color on Q4 seasonality and any other notable factors, such as construction disruption, that might impact the quarter.

Answer

Stephen Cootey, EVP, CFO, and Treasurer, stated that 2026 capital planning is still in progress but noted that approximately $175 million of capital from existing projects (Sunset, Green Valley, Durango South garage) will spill into 2026 due to timing. He reiterated that typical Q3 to Q4 seasonality is an increase of 10%-11%, offset by estimated Q4 disruption of $8 million at Green Valley Ranch and $1 million-$1.5 million at Sunset Station.

Ben Chaiken followed up on the M&A discussion, specifically asking about the M&A environment in the New Hampshire region and whether the Casino Salem acquisition was a one-off or indicative of more activity.

Answer

CEO Bill Carstanjen explained that the New Hampshire entry, initially through the Chasers license, led to the Casino Salem acquisition as an opportunity to 'double down' on a market they strongly believe in. He clarified that it wasn't part of a specific regional M&A philosophy but rather a strategic investment based on market demographics and technology.

Ben Chaiken of Mizuho Financial Group questioned whether the New Hampshire acquisition signals a broader M&A pipeline in the New England region or should be viewed as a one-off opportunity.

Answer

CEO William Carstanjen clarified that the immediate priority is executing the Salem project, which they view as the best opportunity in the region. While acknowledging that the state will see further development, which they will monitor, he emphasized that the company's current focus is on making the Salem investment a success.

Ben Chaiken from Mizuho asked Rob Katz to identify the most significant "holes" or areas where the current pass product portfolio is lacking, moving beyond general strategy to specific product gaps. He also followed up by inquiring about the company's thought process regarding the addition of further member benefits or perks to the pass, aiming to enhance year-round utility for pass holders.

Answer

CEO Rob Katz stated that he doesn't see a particular product missing from their broad portfolio. Instead, he believes there's an opportunity to optimize the pricing of existing products against each other and for different segments, as well as to re-evaluate pass benefits, which have largely remained unchanged. He likened this to the Resource Transformation Plan, where the focus is on optimizing existing assets rather than adding new ones. He specifically mentioned that Buddy tickets (now Epic Friend Tickets) were identified as needing simplification and clarity. Regarding additional member benefits, Katz confirmed this is an area they need to explore, emphasizing that any new benefits should be impactful and not just "window dressing," whether they are internal offerings or third-party partnerships, while acknowledging skiing remains the primary benefit.

Ben Chaiken asked about the largest perceived 'holes' in Vail Resorts' pass product offering, inquiring what specific problems the company aims to solve, where it believes it is lacking, and the primary areas for improvement. He also sought insight into the company's strategy regarding adding additional member benefits or perks to the pass to enhance year-round utility, similar to other passes in the market.

Answer

CEO Rob Katz stated that the company doesn't necessarily see a gaping hole in its broad pass portfolio but rather an opportunity to optimize the pricing of existing products against each other and for different segments. He also mentioned evaluating pass benefits, which have largely remained unchanged. Mr. Katz highlighted that the Buddy tickets/Epic Friend Tickets structure was an identified area for simplification and clarity. Regarding additional year-round benefits, he acknowledged the need to explore this but emphasized that any new perks must be impactful and not merely 'window dressing,' ensuring they align with the company's core offerings or strong third-party partnerships.

Ben Chaiken of Mizuho Securities asked about the strategy in Europe, specifically what asset 'tipping point' would be needed to create momentum for a regional pass. He also inquired if ancillary businesses like My Epic Gear and ski school remain top priorities.

Answer

CEO & Chair Rob Katz replied that the number of owned assets needed for a compelling European pass is an open question and the company will remain disciplined. He confirmed that ancillary businesses are 'absolutely' a top priority and a critical future revenue driver, supported by product innovation and improved marketing.

Ben Chaiken asked about Carnival's capital return strategy, including the timing, specific leverage targets for initiating returns, preference between dividends and buybacks, and a longer-term view on capital return as a percentage of free cash flow. He also inquired about the near-term outlook, specifically what Carnival is observing with close-in demand and how they are thinking about the remainder of the year, given the previously implied healthy acceleration between Q3 and Q4 yields and Q3's better-than-expected performance.

Answer

CEO Josh Weinstein stated that Carnival is nearing the 3.5x leverage metric, expected in early 2026 after the convertible note redemption, which will enable them to start returning cash to shareholders. He emphasized that while it's a board decision, re-establishing a dividend program is very important, though buybacks are not excluded long-term. He noted that with minimal capacity growth in the coming years, significant free cash flow will be available for shareholder returns. Regarding the near-term, Mr. Weinstein confirmed Q3 ended strong due to better close-in demand and onboard spending. He reiterated that Q4 guidance remains consistent, acknowledging that the significant yield outperformance seen in H1 would be challenging to replicate in H2 due to earlier volatility.

Ben Chaiken from Mizuho Securities inquired about Carnival's capital return strategy, including timing, leverage targets, preference between dividends and buybacks, and the long-term approach to capital return as a percentage of free cash flow. He also asked about near-term close-in demand and the outlook for the remainder of the year, given the implied acceleration in Q3-Q4 yields and Q3's strong performance.

Answer

CEO Josh Weinstein stated that capital return is a board decision, but with leverage nearing 3.5x (especially after the convert redemption), Carnival can soon pivot to returning cash. He emphasized the importance of re-establishing a dividend program, with buybacks as a possibility over time, but noted it's premature to detail specific metrics. He highlighted strong Q3 close-in demand and onboard spending, and while Q4 guidance was consistent, Carnival aims to outperform.

Ben Chaiken of Mizuho Financial Group, Inc. asked for specifics on the tactical plan to build the player pipeline for the Wynn Al Marjan Island opening, inquiring about the roles of social media, existing databases, and the London casino.

Answer

CEO Craig Billings outlined a multi-pronged strategy, emphasizing that the Wynn Mayfair casino in London is a key component for attracting regional visitors. He also mentioned that casino hosting teams are already in place, the company is building presence at high-net-worth events, nightlife partnerships are secured, and a pre-opening brand campaign will focus on the property as a luxury integrated resort.

Ben Chaiken of Mizuho Financial Group questioned why the full-year cost savings target remains at -3% despite materially lower attendance and incremental park closures, suggesting costs should be lower. He also asked if the recent demand rebound provides confidence to push pricing in the second half of the year.

Answer

CFO Brian Witherow explained that while some costs were saved from Q2 closures, the company is adding operating days in the fall for Halloween events, which creates an offset. They are also balancing cuts with necessary reinvestment in underperforming parks. CEO Richard Zimmerman added that they are strategically taking price where demand is strong, such as for Halloween events and front-of-line access, while remaining mindful of the value-conscious consumer.

Ben Chaiken of Mizuho Financial Group inquired about the higher mix of fee-for-service sales in Q2, its potential drag on EBITDA, and its long-term trajectory. He also asked about the demand drivers and cadence for Bluegreen owner upgrades to the HGV MAX program.

Answer

President & CFO Dan Mathewes explained that the higher fee-for-service mix was due to strong performance in deeded product locations and expects the full-year mix to land around 16% before declining in future years. CEO Mark Wang added that the upgrade curve for members is up 20% since the launch of MAX, with a great response from Bluegreen members, attributing the success to the program's strong value proposition and the power of the Hilton brand.

Ben Chaiken of Mizuho Financial Group asked about the higher mix of fee-for-service sales in Q2, its potential drag on EBITDA, its long-term trajectory, and the demand drivers for Bluegreen owners upgrading to the HGV Max program.

Answer

President & CFO Dan Mathewes acknowledged the higher fee-for-service mix was due to strong performance in deeded product locations like Myrtle Beach, projecting it would normalize around 16% for the full year and decline long-term as the development pipeline is primarily owned inventory. CEO Mark Wang added that the HGV Max program has been very successful, with the owner upgrade curve up 20% since its launch and strong adoption from legacy Bluegreen members, reflecting a stable consumer environment.

Ben Chaiken of Mitsui asked for an update on the sales force, specifically whether the desired leadership is in place, the ramp-up process for new hires, and whether the sales force's effectiveness improved from Q2 to Q3.

Answer

CEO Mark Wang confirmed that new regional sales leadership is in place and that the company is making significant progress on staffing, having hired 1,200 new reps since the prior quarter with a goal of being 95% staffed by year-end. He stated that the sales force did improve from Q2 to Q3 and expects execution to get progressively better as new team members are trained and integrated.

On behalf of Ben Chaiken from Mizuho Securities Co., Ltd., an associate asked about any abnormal cash costs during the quarter and the reasons for the lower-than-expected conversion of EBITDA to cash flow from operations.

Answer

CEO Marc Swanson noted some labor cost pressures but stated overall cost growth was minimal at about 2%, with learnings being applied to future quarters. Interim CFO James Forrester added that there were no unusual working capital items or other concerns impacting the cash flow conversion.