Mr. Wieczynski: We basically focus on the gaming side of the business and, at this point, cruise lines and names that fit in with cruise lines.
TWST: How has the cruise line space done so far this year from a business
perspective?
Mr. Wieczynski: Not well. What it has come down to is the cruise lines have been
really affected by the price of oil and fuel. Fuel now accounts for about 8% to
9% of revenues and that's up from about 3% or 4%, just three or four years ago.
It's more than doubled and that's what at this point is really starting to eat
into earnings. The Caribbean markets have been pretty weak, and that hasn't
helped them out too much at all this year, but the outlook over the next couple
of months is starting to look good. It looks like the Caribbean markets are
starting to stabilize. What these guys have done is they have taken a lot of
their capacity and they moved it out of the Caribbean region to other parts of
the world, most notably Europe. Europe is an under penetrated cruise market and
pricing in Europe and demand in Europe have been pretty strong. What this has
done is, since they have taken capacity out of Caribbean, there are less ships
there now and less capacity. It seems like the demand is starting to pick for
the Caribbean. Pricing should start picking up as we go into the first half of
2008 in the Caribbean.
Tickers included in this excerpt: CCL, HET, IGT, LVS, RCL, WMS
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