Steve Pizzella

Steve Pizzella asked for an update on how Wynn Al Marjan Island's customer database is developing and the efforts being made to build a pipeline of the right clientele for its opening.

Answer

President & CEO Craig Billings explained that Wynn began building its hosting infrastructure over a year ago with senior regional experts, resulting in high awareness among high-value players. For the mass market, digital database building and regular communication are underway, noting high unaided awareness among both gaming and non-gaming customers in the market, making them confident about the opening day turnout.

Steve Pizzella inquired about the progress of building the customer database and pipeline for Wynn Al Marjan Island as its opening approaches, specifically how the database is shaping up.

Answer

President & CEO Craig Billings detailed that Wynn has been building its hosting infrastructure with senior regional experience for over a year, fostering one-to-one relationship marketing. For the mass market, digital efforts are underway to build a database and create awareness, with high unaided awareness already observed among high-value gaming and non-gaming customers in the region.

Steve Pizzella asked about the longer-term uses of free cash flow in 2027, as the CapEx cycle tapers and Wynn Al Marjan Island comes online. He also inquired about Wynn's potential interest in an online gaming license per emirate in the UAE, as recently reported.

Answer

CEO Craig Billings stated that they constantly evaluate cash use, with capital returns (dividends, buybacks) being an important part of their strategy. He also mentioned the incremental land bank in the UAE, where future scaled capital deployment would depend on market sizing, anticipating a combination of capital returns and strategic investment. He declined to comment on press speculation regarding online gaming licenses in the UAE, stating it's up to the local regulators.

Steve Pizzella of Deutsche Bank asked if recent tax legislation would alter Wynn's capital expenditure plans and requested an update on the Q4 Las Vegas group booking pace and expectations for Formula One.

Answer

CFO Julie Cameron-Doe stated that while some tax provisions will be beneficial long-term (2028 and beyond), they do not change current CapEx plans. COO Brian Gullbrants confirmed that both Q4 and Formula One are pacing well, with F1 showing significant improvement over the prior year due to strong corporate bookings at maintained rates.

Steve Pizzella asked about the current benefits of ALG Vacations to Hyatt's business, whether the company would consider selling it outright or to a partner, and if it serves as an acquisition tool for new all-inclusive resorts or if maintaining control is preferred.

Answer

Mark Hoplamazian, President and CEO, affirmed that ALG Vacations (ALGV) is highly beneficial, with the HIC portfolio outperforming the market due to ALGV's capabilities, UVC members, and growing World of Hyatt penetration. He noted that ALGV is a profitable distribution platform, representing 16% of HIC's total rooms revenue in 2025, and provides tremendous visibility into airlift. While open to strategic alternatives for ALGV, any deal must maintain its strategic attributes, enhance its business model, and not be solely a financial transaction. Joan Bottarini, CFO, added that ALGV faces a $10 million headwind in 2026 due to Jamaica and lower demand for 4-star and below hotels, with the full impact expected in Q1.

Steve Pizzella asked about the strategic benefits of ALG Vacations to Hyatt's business, specifically whether it serves as an acquisition tool for new all-inclusive resorts or is integral to the existing portfolio, and if Hyatt would consider selling it outright or to a partner.

Answer

President and CEO Mark Hoplamazian affirmed that ALG Vacations (ALGV) is both an acquisition tool and integral to the existing portfolio. He cited data showing the HIC portfolio outperforming the market, driven by ALGV, UVC members, and growing World of Hyatt penetration. ALGV represented 16% of HIC's total rooms revenue in 2025, and HIC represented 30% of ALGV's total hotel revenue. He highlighted ALGV's tremendous visibility into airlift and strong relationships with airlines. While open to strategic alternatives for ALGV, conditions include maintaining strategic attributes, enhancing its business model, and leveraging ongoing AI enablement efforts. CFO Joan Bottarini added that ALGV faces a $10 million headwind in 2026 due to Jamaica and lower demand from 4-star and below hotels.

Steve Pizzella asked about Hyatt's net rooms growth outlook for 2026 and beyond, considering the raised full-year guidance and pipeline increase.

Answer

Mark Hoplamazian, President and CEO of Hyatt, highlighted strong organic growth, expecting to more than double the core organic growth rate from last year. He noted significant momentum in signings, especially for new brands like Hyatt Select and Unscripted, and anticipated continued acceleration through Q4. He expressed confidence in achieving 6%-7% net rooms growth again in 2026, with pipeline additions strong in Asia-Pacific and the U.S.

Steve Pizzella asked about Hyatt's net rooms growth, core organic growth guidance for the full year, pipeline increase, and the outlook for net rooms growth in 2026 and beyond.

Answer

Mark Hoplamazian, President and CEO, Hyatt, highlighted strong organic growth, expecting to more than double the core organic growth rate from last year. He noted momentum in signings, especially for new brands like Hyatt Select and Unscripted, and anticipated continued acceleration through Q4. He expressed confidence in achieving 6%-7% growth again next year, with a positive outlook.

Steve Pizzella asked for insights into the expected quarterly RevPAR cadence for the full year 2026, considering easier comparisons and major events like the World Cup.

Answer

Kevin Jacobs, EVP and CFO of Hilton Worldwide, noted that the World Cup spans Q2 and Q3, and the government shutdown impacted Q4 of the prior year, suggesting a relatively balanced year for RevPAR. Chris Nassetta, President and CEO, expressed optimism, indicating that if current positive data trends persist, the full-year RevPAR growth could potentially exceed the 1-2% guidance range, especially given the macro tailwinds and easier comps.

Steve Pizzella, Gaming, Lodging, and Leisure Equity Research Analyst at Deutsche Bank, inquired about the expected quarterly cadence of RevPAR growth for the full year, given the 1%-2% guide for Q1 and the full year, considering easier comps and the World Cup.

Answer

Kevin Jacobs, EVP and CFO of Hilton Worldwide, noted that while there's a lot of year left, the underpinnings in the economy could lead to better performance if current data persists. He described the calendar as having complicated puts and takes but felt the World Cup (Q2/Q3) and the government shutdown impact (Q4 2025) were well-balanced across the year. Chris Nassetta, President and CEO, reiterated optimism, suggesting he would 'take the over' on the RevPAR guidance range, citing macro tailwinds, micro factors, and easier comps from the previous year's events like Liberation Day and the government shutdown.

Steve Pezzella asked for elaboration on Hilton's new system-wide fee reductions tied to product and quality scores, its origins, potential impact on franchise/royalty fees, and its role in incentivizing conversions.

Answer

Chris Nassetta, President and CEO, explained the fee reductions were initiated to support owners during a challenging period and to incentivize reinvestment in assets, addressing a cycle of underinvestment post-COVID. The program, tied to customer satisfaction scores, aims to accelerate product quality improvements. He confirmed it does not impact royalty or management fees and has no P&L impact for Hilton, but it does make Hilton a more attractive partner, potentially encouraging more conversions.

Steve Pizzella of Deutsche Bank asked about the current hotel conversion environment, including the use of key money and the addressable market for conversions, particularly for larger properties.

Answer

EVP & CFO Kevin Jacobs reported that conversions are expected to account for 40% of deals for the full year, driven by a large addressable market of independent and underperforming branded hotels. He confirmed Hilton is seeing success with larger hotel conversions and remains disciplined on key money, using it on only 8% of rooms under construction, a figure consistent with long-term trends despite increased competition.

Steve Pizzella inquired about the promotional environment and competitive behavior in the locals market, and whether Red Rock Resorts expects to benefit from the strong group calendar on the Strip for its own group business.

Answer

Scott Kreeger, President, described the promotional environment as very consistent and stable over the past couple of years, with small single-unit operators being competitive but not significantly impacting the overall market. He confirmed a strong Q4 in hotel sales and catering, with positive momentum expected into Q1 and Q2, and encouraging bookings for the back half of the year, suggesting potential benefits from group business.

Steve Pizzella inquired about the promotional environment and competitive behavior in the locals market, and whether Red Rock Resorts expects to benefit from the strong group calendar on the Strip for its own group business.

Answer

Scott Kreeger, President, described the promotional environment in the locals market as 'very consistent' and stable over the past couple of years, with small single-unit operators being the primary competitive factor. He confirmed a 'great quarter' for hotel sales and catering in Q4, with positive momentum expected into Q1 and Q2, and encouraged bookings for the back half of the year, suggesting benefits from group business.

Steve Pezzella asked about any notable interquarter cadence in the locals' market performance. He also sought clarification on the sports book hold impact for the current quarter, referencing previous discussions about unusual hold percentages.

Answer

Stephen Cootey, EVP, CFO, and Treasurer, stated that the quarter's cadence was 'pretty normal' for the locals' market. He clarified that while no specific sports book hold impact was quantified for the current quarter, the hold has returned to normal after an 'unusually poorly' held Q3 last year, which had a $4 million unfavorable impact.

Steve Pezzella inquired about any notable interquarter cadence within the locals' market. He also asked if there was a specific sports book hold impact for the quarter.

Answer

Stephen Cootey (EVP, CFO, and Treasurer, Red Rock Resorts Inc) and Scott Kreeger (President, Red Rock Resorts Inc) stated that it was a "pretty normal quarter" for locals' gaming activity. Stephen Cootey clarified that while no specific number was given for the current quarter's sports book hold, it was normal, contrasting with an unusually poor $4 million hold reported in the third quarter of the previous year.

Steve Pizzella inquired about the start of the year for MGM's regional portfolio and the expected range of outcomes for the regional business this year. He also asked if MGM is anticipating incremental visitation to Las Vegas from the upcoming World Cup and if advanced bookings indicate increased demand.

Answer

Ayesha Molino (COO) and Bill Hornbuckle (CEO) highlighted the continued steadiness of the regional business, noting meaningful excitement from investments like Borgata's high-limit table rooms and the potential impact of a Sphere in Maryland for National Harbor. Bill Hornbuckle confirmed expectations for incremental high-end visitation to Las Vegas from the World Cup, particularly from South America, but noted it's still early to assess the overall mix.

Steve Pizzella asked about the start of the year for MGM Resorts' regional segment and the expected range of outcomes for the business, as well as the anticipated incremental visitation to Las Vegas from the World Cup and any related advanced bookings.

Answer

COO Ayesha Molino and CEO Bill Hornbuckle noted the continued steadiness of the regional business, highlighting successful investments like Borgata's high-limit table rooms and the potential positive impact of a Sphere in Maryland for National Harbor. CEO Bill Hornbuckle confirmed expectations for high-end customers from the World Cup, particularly from South America, but stated it was too early to determine the overall mix or specific advanced bookings.

Steve Pizzella asked about the visibility into the media business's increased spend driving growth versus shorter-term demand, and how to think about free cash flow in Q4.

Answer

Mark Locke (CEO) noted continued media growth ahead of expectations, with Sports Innovation Lab providing more data, and mentioned ongoing annual planning with agencies and partners, including for the World Cup. For Q4 free cash flow, Mark Locke (CEO) highlighted strong 2024 operating cash flow ($82M), seasonality (back half positive), discretionary investments, timing of rights, and non-recurring litigation expenses.

Steve Pizzella asked about the visibility Genius Sports has into its media business, given the increased spend in Q3 that drove growth above expectations. He also inquired about the outlook for free cash flow in the fourth quarter.

Answer

Mark Locke (CEO) (responded by Bryan Castellani) noted the media business continues to grow ahead of expectations, with Sports Innovation Lab providing deeper insights, and annual planning with new agencies is underway. For free cash flow, Mark Locke (responded by Bryan Castellani) highlighted strong operating cash flow for 2024, with Q4 typically being positive, but mentioned potential discretionary investments and non-recurring litigation expenses.

Steve Pizzella from Deutsche Bank asked about the drivers behind the material acceleration in fixed betting tech revenue and how to think about its future growth. He also inquired about the company's capital allocation plans for its cash balance.

Answer

Nicholas Taylor (CFO) attributed the fixed revenue growth to non-US, SaaS-style contracts and price increases from renewals in Europe, supported by key rights like UK soccer. Regarding capital allocation, both Nicholas Taylor and Mark Locke (Co-Founder, CEO & Director) stated that M&A is the key focus, but they maintain an extremely high bar for deals. They also noted the existing share buyback program is a lower priority and that organic investment continues to yield strong returns.

Steve Pizzella asked about regional performance trends in September, specifically if the company observed a decline, and the outlook for Q4 given last year's acceleration.

Answer

Tom Reeg, CEO, attributed September's trend to the Labor Day calendar shift, which moved a significant weekend into August. He noted Atlantic City as the only market with a significant demand shift and expects flow-through and margin to increase as marketing strategies are refined.

Steve Pezzella asked about regional performance trends, specifically if Caesars observed a September decline similar to state-level data, and how Q4 comps for regionals are viewed given last year's October acceleration.

Answer

CEO Tom Reeg attributed the September trend to the Labor Day calendar shift and noted Atlantic City as the only market with a significant demand shift. He expects flow-through and margin to increase in regionals as marketing is refined.

Steve Pizzella of Deutsche Bank asked about current operating expense and labor trends in Las Vegas and the Regional segments. He also requested an update on the performance of the New Orleans property.

Answer

CEO Tom Reeg noted that while Las Vegas is seeing union contract-driven labor cost increases, the company has managed overall expenses to remain flat. He described regional expense increases as being in line with general inflation and not as impactful as in prior years. Reeg confirmed that New Orleans had another 'very strong quarter' and that its performance, along with Danville's, is driving strong results in the regional segment.

Steve Pizzella from Deutsche Bank asked about the expected earnings impact from the new Ticket-In, Ticket-Out (TITO) system in Illinois and sought clarification on the Nevada market's growth when excluding the impact of a lost key customer.

Answer

Andrew Rubenstein, Founder, President, & CEO, explained that it is too early to quantify the financial impact of TITO, as the rollout is in its initial phases, but anticipates it will improve player experience and modestly reduce operating costs. Mark Phelan, President of U.S. Gaming & Interim CFO, clarified that net of the lost customer, the Nevada market experienced slight revenue growth, and the team successfully improved operating margins by optimizing its footprint.

Steve Pizzella from Deutsche Bank asked about the expected earnings impact from the new Ticket-In, Ticket-Out (TITO) system in Illinois and questioned the growth of the Nevada market when excluding the impact of a lost key customer.

Answer

CEO Andrew Rubenstein responded that it is too early to quantify the material impact of TITO, as the rollout is in its initial weeks, but anticipates it will improve player experience and mildly reduce cash needs and collection costs. Mark Phelan, President of U.S. Gaming & Interim CFO, clarified that excluding the one-time customer loss, the Nevada market actually grew slightly year-over-year and the company successfully improved operating margins in the state.

Steve Pizzella from Deutsche Bank followed up on conversions, asking about the competitive landscape, the use of key money, and the addressable market for larger, multi-unit conversion deals.

Answer

CFO Leeny Oberg described the conversion opportunity as 'extraordinary,' given that half the world's hotels are unbranded. She confirmed the market is competitive and key money is a factor, with slightly more use in lower chain scales than in 2019 but no dramatic year-over-year change. President & CEO Anthony Capuano added that luxury and full-service projects, which are 40% of the pipeline, naturally command more key money but also generate higher fees.

Steve Pizzella asked about the current operating expense environment and any observed changes in non-gaming spending trends.

Answer

EVP and CFO Josh Hirsberg reported that costs are being managed well, as evidenced by consistent margins across segments. He noted no significant changes in non-gaming spend, with F&B revenue up in line with stronger customer visitation, while hotel softness was a Las Vegas destination-specific issue. Overall spending patterns are consistent with gaming demand.

Steve Pizzella from Deutsche Bank asked for details on the acceleration of ancillary fees, particularly from the co-branded credit card, and the outlook for the second half of 2025 and into 2026.

Answer

CFO Michele Allen confirmed the 19% growth in ancillary revenues in Q2 was in line with expectations, largely driven by the renewed credit card agreement. She highlighted a 5% increase in new accounts and a 2% lift in average spend. Allen stated that year-to-date growth of 13% aligns with their full-year 'low teens' expectation and anticipates similar results in the second half of the year.