Article Excerpt:
TWST: Give us an idea of what you cover in the leisure space.Mr. Hovorka: I cover recreational products and services. That includes the cruise lines; the motor sports companies or NASCAR companies; product companies like Arctic Cat MarineMax (HZO) and Polaris (PII); and also the entertainment media companies Marvel (MVL) and 4Kids (KDE).
TWST: Let's start with the cruise space. What's gone on there?
Mr. Hovorka: We have two divergent trends in the industry. One is the
demand for cruises. Pricing has been very strong for going on almost two
years now, about 18 months. That is a reflection of the fact that this
was preceded by a period of three very bad years. Obviously, terrorism
and the fear of traveling was an issue after 9/11; there were also
problems on the cruise lines related to bad PR from things like the
Norwalk Virus, which was very high profile in the media. Those items had
a negative impact on bookings in 2002 ' and then, of course, came the
war in Iraq in 2003. So coming off of those three very bad years, you
had some very easy comparisons, and pricing was very strong in 2004 and
continues to be strong in 2005. The opposite trend is that fuel costs
have gone up dramatically for the cruise lines. Fuel is about 6% or so
of their revenues, so while its impact may not be as big as it is for,
say, the airline industry, it is still impacting earnings negatively.
Tickers included in this excerpt: ACAT, BC, CCL, DVD, HDI, HZO, ISCA, KDE, MVL, PII, RCL, TRK, W
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