GOING DOWN, GOING BUST, GOING OUT

MGM REVENUE TANKS IN FOURTH QUARTER. The casino operator reported a 53-percent drop in revenue for the period, collecting $1.5 billion, less than half of the $3.2 billion it gained during the same period a year earlier.

Revenues fell 66 percent in Las Vegas and 58 percent in Macao, the Chinese gambling mecca, the company said.

The loss sent MGM to a $364-million operating loss for the period, compared to $3 billion in operating income in 2019’s final three months.

As conventions disappeared from Las Vegas, leaving hotel rooms empty mid-week, the company closed its Mandalay Bay, the Mirage, and ParkMGM hotels on the Strip from Tuesday through Thursday.

In Las Vegas, hotels and casinos have operated at a 25-percent capacity cap. However, stronger performances at MGM’s regional gambling dens in Maryland, Massachusetts, Michigan, Mississippi, New Jersey, New York, and Ohio have buoyed revenues, the company said. 

Revenues in those regional properties were down only 34 percent for the period, MGM noted.

For all of 2020, MGM posted a 60-percent plunge in net revenue, from $12.9 billion in 2019 to $5.2 billion last year, leaving it with a 12-month loss of $1 billion. Income for 2019 was $2 billion.

BetMGM, the company’s online betting venture, has a 17-percent share of the U.S. market for digital wagering, including a third of the market in Colorado and Tennessee, MGM reported.

MADISON SQUARE GARDEN’S REVENUE KO’D. Madison Square Garden Holdings Inc., which owns not only its namesake venue but also Radio City Music Hall and other live entertainment sites, saw fourth-quarter revenue plunge 94 percent to $23.1 million in 2020’s final quarter, compared to $394.1 million in profits a year earlier, handing stockholders a loss of $124.9 million for the period.

New York's event sites are scheduled to reopen on 23 February under limited capacity.  

EXPEDIA REVENUE DECLINES FOURTH QUARTER IN A ROW. The travel booking website reported collecting $920 million in revenue during 2020’s fourth quarter, 67 percent less than a year earlier and the fourth straight quarter of decline.

Analysts were expecting $1.1 billion, according to Bloomberg.

Gross sales also slid 67 percent to $7.6 billion year on year.

Despite a global vaccination campaign, “rising [COVID] cases across the globe and rolling shutdowns of various travel markets made an impact,” Expedia CEO commented in a statement accompanying the report.

Those difficulties may continue.

The first half of 2021 “is going to be tougher than we previously expected, given the scale of rising case counts globally,” Deutsche Bank analysts wrote in a recent note to investors.

Before 2020, Expedia’s sales had grown each year for the previous eight.

PAL AIRLINES SAYS BUH-BYE TO 2,700 EMPLOYEES. The Philippines’ oldest and largest airline will lay off almost 40 percent of its 7,000 workers in an attempt to survive the damage wrought by the pandemic and world economic crash.

PAL reported losing US$600 million during the first nine months of 2020 after losing $160 million during the same period in 2019.

The Philippine government grounded all flights last March under a harsh national lockdown order, then allowed the carrier to resume 4 percent of its flights on a weekly schedule with a fraction of its employees returning to work.

PAL reports it has resumed 30 percent of its pre-pandemic schedule.

The Philippine government has offered financial help to the airline but only if private sources provide most of the aid.

The global airline industry lost US$118.5 billion in 2020, according to the International Air Transport Association, and will lose $38.7 billion this year, it said.

The airline industry will not recover to pre-pandemic levels of sales and operations until at least 2024, analysts and industry executives have predicted.

TRAVEL INDUSTRY STILL MIRED IN PANDEMIC. As other economic sectors begin to rebound from the COVID pandemic and global shutdown, the travel industry, which produces an estimated 10 percent of the world’s GDP, has not yet started to recover.

Australia and New Zealand have maintained their bans on foreign visitors; other countries that reopened their borders in late summer and fall shut them again as the COVID virus resurged through Europe, the U.S., and South America as the year progressed.

The Biden administration is mulling requiring negative COVID tests to board airplanes for domestic flights, transportation secretary Pete Buttigieg has revealed.

People arriving in Britain must now quarantine at their own expense for ten days; Canada has imposed a similar rule as well as ending flights to Mexico and the Caribbean through April.

The U.K.’s stricture is “essentially a border closure that will inevitably delay the country's recovery and hurt the U.K.'s supply chains,” Heathrow airport CEO John Holland-Kaye said in a statement earlier this month quoted by CNN Business.  

Heathrow’s passenger traffic last month was 89 percent lower than it was a year earlier, the airport reported.

Travel to Hong Kong, which hosted 65.1 million visitors in 2018, shrank by more than 93 percent in 2020, the South China Morning Post reported, with 88 travel agencies laying staff or merging to stay in business.

“Cross-border and international travel are not expected to resume before the end of this year,” Alice Chan Cheung Lok-yee, director of Hong Kong’s Travel Industry Council, told the newspaper. “Financial help from the government is still key.” 

Some of the city-state’s travel agencies have opened sidelines to bring income; some conduct virtual tours while others sell everything from home appliances to pineapple cakes online.

“The world is more locked down today than at virtually any point in the past 12 months,” Alexandre de Juniac, CEO of the International Air Transport Association, said in an early February statement, and airlines will continue to need government aid to survive.

Thousands of companies and as many as 330 million workers depend on airlines to bring customers to their hotels, restaurants, taxi services, and attractions, the World Travel and Tourism Council has said. 

As many as half of those workers are now out of a job, the council estimates.

“We don’t see a clear exit strategy,” Gloria Guevara, council CEO, told CNN. “It’s easy to close borders but not that easy to open them.”

COMMERZBANK SLASHES PAYROLL, BRANCHES. Commerzbank, the second largest bank in Germany by assets, has unveiled its new “Strategy 2024” to turn around a financial slide that included a €3.3-billion loss in 2020’s fourth quarter.

Beginning in 2024, costs are to be slashed by €1.4 billion. The bank will reduce its number of branches from 790 to 450, a 43-percent reduction; another 200 branches shut during the pandemic will not reopen.

Commerzbank also will close its equities trading and research department.

One in four overseas employees will be dropped and one in three workers in Germany will be fired. The bank’s current workforce is about 49,000.

The drastic measures are designed to boost the banks’ return on equity to 7 percent per year.

Commerzbank also will pay more attention to customers with “a clear connection to Germany” and expand its work in private banking and wealth management to attract and keep rich customers.

The strategy is the brainchild of Manfred Knof, who became Commerzbank’s CEO at the beginning of this year.

Germany’s government owns 15.6 percent of the bank, the remnant of a 25-percent stake it bought in 2008 to help the bank survive the Great Recession. Commerzbank funds and insures about 30 percent of the nation’s imports and exports and is seen as essential to Germany’s foreign trade.

Government representatives approved the plan, as did workers' councils – a form of a labor union – although the workers' groups complained about the short timeline for the 10,000 workers affected to find other jobs.

“Everyone knows something must be done” to salvage the bank, “even something very drastic,” Olaf Scholz, Germany’s finance minister, responded in a comment quoted by the World Socialist Web Site.

The mass layoff should be carried out in the "tradition of social partnership," Schloz added and urged a "closing of ranks" between workers, the bank, and the government.

HEINEKEN WILL CUT 8,000 WORKERS UNDER NEW PLAN. The world’s second-largest brewing company will fire about 10 percent of its workers as part of a plan to save €2 billion over two years after reporting a net €204-million loss in 2020, compared to a 2019 profit of €2.2 billion.

The loss of trade in bars and restaurants helped drive down revenues by 17 percent year on year to €23.8 billion. Beer sales alone fell 8.1 percent.

The firings will lop 20 percent from payroll costs in the company’s home office.

“The world is changing, the industry is changing, and we need to change,” new CEO Dolf van den Brink said in a statement revealing the plan, which he said is about “future-proofing” the company.

Under the plan, the brewer will emphasize no- and low-alcohol drinks and flavored hard seltzers, a growing product line it rolled out later than many competitors.

Heineken also will trim product lines by as much as a third in some European markets and end marginally effective advertising, van den Brink announced.

The company sees a “slow recovery” ahead for itself in Europe, with different markets recovering at uneven paces well into 2022.

Only 30 percent of Europe’s bars and restaurants were open in January, van den Brink noted.

2 Comments
  1. David Goldman 3 weeks ago

    Capital WOW

  2. Desmond Knox 2 weeks ago

    Impressive how they all shot themselves rather than call it out. No airlines, no tourism, no hotels, no revenue. They seriously think that’s is going to given them independence by doing this.
    Rich people are dumper than the average person. So who wants to travel when your destination hotel is closed or lacking any entertainment who’s going to make new watches, cars, perfumes, all the bling rich people like. They seriously will have a worse life also. Build back worse is boring ! its not remotely better even if your rich and part of the so called elite.

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