CHICAGO (AP) — Hundreds of Hilton Chicago Hotel workers started a three-day strike Saturday that union officials say is in protest of the hotel chain’s efforts to “lock workers into cheap recession contracts.”

Unite Here Local 1 spokeswoman Annemarie Strassel told The Associated Press workers began striking in Chicago early Saturday and won’t return to their jobs until early Tuesday. The union represents about 600 workers at the Hilton Chicago downtown.

Strassel said the employees have joined striking workers in San Francisco, who went out Wednesday, and in Honolulu, who went out Thursday. The Chicago workers include housekeepers, dishwashers, cooks, bell staff and food servers.

“Hilton wants to lock workers into cheap recession contracts even as the hotels rebound,” she said early Sunday in a phone interview. “Workers simply want a share in the recovery.”

The AP could not immediately reach hotel officials. But Hilton Chicago told the Chicago Tribune that the hotel is “operating as normal.”

“Union tactics such as work stoppages and demonstrations will do nothing to bring us closer to a new contract,” Hilton said in a statement. “They are harmful to employees, to the hospitality industry and to the City of Chicago.”

Hilton said the wages and benefits its workers receive are “competitive” and that it offered wage increases and other advantages during negotiations.

More than 8,000 Chicago area hotel workers, including ones at five Hiltons, saw their contracts expire in August 2009. The sides have been unable to reach a deal.

Strassel said the strike is only affecting the Hilton Chicago, which is both owned and operated by Hilton Worldwide. One of the world’s largest buyout firms, Blackstone Group LP, owns Hilton Worldwide.

“We’ve been calling this strike a taxpayers’ strike because Hilton finagled $180 million in bailout funds when Hilton Worldwide was able to write off debt for the federal reserve that it owed American taxpayers,” Strassel said.

Workers are picketing in shifts around the clock, carrying signs that read “Unite Here!” and “Taxpayers on Strike.”

In Honolulu, members of the Unite Here Local 5 are striking for five days at the Hilton Hawaiian Village. A union contract there expired June 30.

Hotel and resort operator Marriott International ( MAR – news – people ) said Thursday that its second quarter profit more than tripled from last year, beating analyst expectations.

The Bethesda, Md., company reported second quarter net income of $119 million, or 31 cents per share, compared with $37 million, or 10 cents per share, in the year-ago period. Last year’s results were hampered by several one-time items. Revenue rose 8% from last year, to $2.77 billion, aided by higher room rates and fees. On average, Wall Street analysts expected a smaller profit of 28 cents per share, on slightly lower revenue of $2.75 billion.

The company said that revpar, or revenue per available room, the key metric used to measure a lodging company’s performance, jumped 9.9% from last year.

Marriott shares dropped by 2.6% in late morning trading Thursday.

The Bottom Line
Shares of MAR have a dividend yield of 0.50%, based on last night’s closing stock price of $32.16. The stock has technical support in the $26-$28 price area. If the shares can firm up, we see overhead resistance around the $34-$35 price levels. We would remain on the sidelines for now.

Marriott is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.

HONG KONG (AP) — Las Vegas Sands Corp. saw shares in its Macau operation tumble 10 percent in its first day of Hong Kong trading Monday, after raising $2.5 billion in an initial public offering to help restart its languishing gambling projects.

Shares of Sands China Ltd. closed at 9.32 Hong Kong dollars after trading as low as HK$8.78. The stock had been sold at HK$10.38, near the low end of a range of prices it was marketed at.

The U.S. casino giant had originally sought to raise more than $3.3 billion by selling shares in its casino businesses in the southern Chinese enclave of Macau, the world’s largest gambling market.

Much of its IPO proceeds will go toward paying back Las Vegas Sands’ massive debts. About $500 million will be used to resume work on multibillion dollar projects Sands temporarily abandoned last year because of a funding squeeze.

Sands Chairman Sheldon Adelson dismissed worries about the stock’s initial performance.

“We’re not in business for 10 minutes, we’re in business for decades,” he told reporters at Hong Kong’s stock exchange shortly after his company’s stock tanked.

Analysts said Monday’s tepid debut was partly the result of the high price Sands was valuing its Macau operation.

Concerns about growth and saturation in the city’s casino market, as well as waning interest in new offerings after a string of recent IPOs, including one from Sands rival Wynn Resorts, also weighed.

New casino openings in Macau’s Cotai area, where Sands operates its colossal Venetian resort and is planning its other projects, “will drag down the profitability of all casinos there significantly,” Credit Suisse analyst Gabriel Chan wrote in a research note. He said he expects the company’s stock to lag the broader market.

“This presents a great challenge to Sands China, given its already tight balance sheet,” he said.

The casino industry in Macau, the one place in China were gambling is legal, enjoyed years of dizzying growth before last year’s slowdown. It has rebounded this year thanks partly to China’s quick recovery from the global economic downturn.

By Sui-Lee Wee
HONG KONG (Reuters) – Sands China’s (1928.HK) weak stock market debut in Hong Kong on Monday signals a lack of investor appetite for a casino gaming company with a high valuation and an uncertain outlook, with mixed interest in the sector’s long-term prospects.

Sands China opened at HK$9.35 on its trading debut, down 10 percent from an IPO price of HK$10.38. The opening was in line with forecasts for a weak start because of its high IPO price and the weak performance of its closest rival, Wynn Macau (1128.HK).

“It has something to do with the IPO price — it was set at a very high multiple … and the company is not making a lot of profit this year,” said Belle Liang, head of research at Core Pacific-Yamaichi International (HK) Ltd. “The other gaming stocks have more attractive valuations.”

“Wynn also disappointed investors, so they are more cautious,” she said. “I believe the sector has long-term growth potential but the risks attached to it are very high.”

Wynn Macau’s shares were 5 percent below their IPO price of HK$10.08, trading at HK$9.62 on Monday morning.

The highly anticipated listing of Sands China, nearly two months after rival Wynn Macau’s IPO, will test investor appetites for casino shares, offering a debt-laden company that promises a strong growth outlook in Macau, the world’s biggest and fastest-growing gambling market.

The IPO, which raised $2.5 billion, is the latest in a string of share sales across Asia from companies looking to take advantage of a broad stock market rally that is now showing signs of fatigue.

Sands, founded by 76-year-old billionaire Sheldon Adelson, was the first U.S. casino operator to cash in on the Chinese passion for punting when it entered Macau in 2004 after the government opened the gaming market to outsiders.

Macau, the only part of China where casino gambling is legal, generated record gaming revenue in October, even after China curbed travel to the former Portuguese enclave through visa restrictions on travellers from nearby Guangdong province.

The company, which owns two casino resorts in Macau, including the gargantuan Venetian, has a market share of about 22 percent, the second-largest among Macau casino operators, behind SJM Holdings (0880.HK), according to CLSA. It also competes with Melco Crown Entertainment (MPEL.O) and Galaxy Entertainment Group (0027.HK). (Editing by Chris Lewis) ((suilee.wee@thomsonreuters.com; +852 2843 6314; Reuters Messaging: suilee.wee.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

By LYNN COWAN
The IPO of Chinese hotel chain 7 Days Group Holdings Ltd. attracted investors in droves while coal miner Cloud Peak Energy Inc. drove them away during early trading Friday

7 Days Group, which operates the third-largest brand of economy hotels in China, was recently up 17% from its initial public offering price, while Cloud Peak was down 2%.

The two companies, which both listed on the New York Stock Exchange, are among the four deals expected Friday to close out November’s U.S. IPO market ahead of the Thanksgiving holidays. Two others, from online education company Archipelago Learning Inc. and defense technology specialist Global Defense Technology & Systems Inc., should open later Friday morning on the Nasdaq.

Shares of 7 Days Group are a play on China’s emerging hotel business, which has been growing rapidly along with the country’s economy and tourism in the last five years. The company has grown from five hotels in 2005 to become the third-largest economy chain in China, with 283 hotels operating under its “7 Days Inn” brand. More recently, it began licensing its brand to hotel owners, then managing the hotels for those owners, which is less capital-intensive than ownership.

For the first nine months of 2009, its revenue rose 71% to $121.7 million compared with the first nine months of 2008, primarily due to its expansion through new hotel openings. It reported a net loss due to interest expense eating away at its operating profit, but the loss narrowed by 94% to $1.5 million.

Shares of 7 Days Group opened at $13.50 on the New York Stock Exchange, up 23% from its initial public offering price of $11. It sold 10.1 million American depository shares at the high end of its expected $9 to $11 price range, which was set by underwriters J.P. Morgan Chase & Co. and Citigroup Inc.

Cloud Peak Energy, on the other hand, found its shares sinking in early trading. The stock opened at $14.50 a share on the New York Stock Exchange, down 3% from its initial public offering price of $15. It sold 30.6 million shares at a price below its expected $16-to-$18 range.

Cloud Peak, which is carving out Anglo-Australian mining giant Rio Tinto PLC’s western U.S. coal business, is the third-largest coal producer in the Powder River Basin region. The company claims to operate some of the lowest-cost, highest-producing mines in America, and its steam coal is used to produce electricity.

Demand for electricity and coal in the U.S. has been waning since mid-2008 as a result of the economic downturn. The company warns that weak market conditions during 2009 resulted in fixed price contracts for future sales at lower prices than what was seen in 2008, so Cloud Peak could see a lag effect on its results even if the economy improves. In addition, stockpiles of coal by its customers have continued to increase, leading them to curtail future orders.

Recent low prices for natural gas and oil, which are substitutes for coal generated power, may also lead to continued decreased coal consumption by electricity-generating utilities. In the first nine months of 2009, Cloud Peak has seen a greater number of customers seeking to reduce the amount of tons received under existing contracts; it warns that additional customers may also reduce tons taken in the future.

Cloud Peak didn’t begin to feel the effects of the economic downturn until the second quarter of 2009, thanks in part to long-term sales agreements with prices fixed during better economic times. In the first nine months of 2009, its properties produced revenue of $1.06 billion, up 17% from the same period of 2008, and net income of $190.1 million, up from $25.8 million.

Credit Suisse Group, Morgan Stanley and Royal Bank of Canada’s RBC Capital markets division managed Cloud Peak’s offering.

By JONATHAN CHENG
HONG KONG—Las Vegas Sands Corp. said it hopes to generate 30% of its Macau revenues from non-Chinese customers after 2011, when it opens a new casino-and-resort complex in Macau’s Cotai area.

Currently, revenue from non-China visitors makes up about 8% of Las Vegas Sands’ business in Macau, according to the company’s Macau president, Steve Jacobs.

While visitors from neighboring Hong Kong and mainland China make up the bulk of visitors and revenue in Macau and at Las Vegas Sands’ properties there, Chairman Sheldon Adelson said Sunday that those visitors tend to be day-trippers focused on gambling.

“When people fly in, they bring a much bigger budget than does a day-tripper,” Mr. Adelson said, highlighting efforts to drive business from Japan, South Korea, Thailand, Indonesia and India.

He said business from day-trippers, many of whom cross the border to Macau from Hong Kong or the neighboring southern Chinese province of Guangdong for gambling runs, “can be taken care of by the casino-only guys,” most of whom are clustered in Macau’s traditional downtown peninsula.

In Cotai, where Las Vegas Sands’ Venetian Macao and its new megaproject are located, Mr. Adelson said he hopes a variety of entertainment and shopping options will attract longer stays.

Work on that project is scheduled to resume in January after a year-long hiatus, with a mid-2011 launch date for the project, which sits adjacent to the Venetian Macao and includes Shangri-La, Traders and Sheraton hotels.

Mr. Adelson’s plan is to “recreate a portion of the famous Las Vegas Strip,” eventually opening 14 hotels with more than 20,000 rooms. “That’s critical mass,” he said.

The company hopes to capture a greater share of regional business, in part by introducing more services and amenities aimed directly at Japanese and Indian clients, some of which will be rolled out as early as next month, the company said.

The Japanese-themed sections will be staffed by hosts brought in from Japan.

At the same time, Mr. Adelson said there was plenty of growth still left in mainland China, where only a small fraction of the population has been tapped so far.

Las Vegas Sands aims to raise as much as US$3.83 billion in a Hong Kong listing of its Macau assets. The listing will be open to retail subscribers Monday, with trading set to begin on Nov. 30.

By David B. Wilkerson
Walt Disney Co. (DIS) shares hit a new 52-week high Friday on the media giant’s better-than-expected fiscal fourth-quarter results and amid optimism for improvements in the advertising environment and the company’s film studio.

Disney shares, which are about double their March lows, rose as much as 4.9% to $30.46, surpassing $30 for the first time since October 2008. The stock recently traded at $30.26, up 4.2% on the day.

Deutsche Bank Securites’ Doug Mitchelson, who maintained his buy rating on Disney stock, said strong income growth from the cable networks, “well-positioned” international businesses and “excellent” governance create more room for the shares to rise.

Mitchelson also said the company’s recent box-office slump should end, given a number of sequels that will hit screens in the current fiscal year, including “Toy Story 3,” “Cars 2″ and the fourth “Pirates Of the Caribbean” film. The studio entertainment division recorded a second consecutive loss in the fourth quarter.

BMO Capital Markets’ Jeffrey Logsdon said a lower cost structure also will help the studio division.

“Investors should be mindful that Disney has cut its film production and distribution investment by close to $600 million annually. While the reduction in films released will shrink revenues, there should be a $100 million plus elimination in overhead and slight improvement in the profitability quotient of the film portfolio annually,” Logsdon said.

Despite the share gains Friday, Imran Khan of J.P. Morgan kept his underweight rating but lifted his estimates as well as his price target to $28 from $22. The revisions reflect “an improving ad outlook, which will be somewhat offset by challenging studio results and pension and post-retirement costs,” he said.

Chief Financial Officer Tom Staggs said ad rates at ABC are running more than 20% higher than they were last summer. And advertisers with an option to buy ads in the January quarter are doing so at a better rate than the network has seen in the last 10 years, Staggs said.

In its fiscal fourth quarter, Disney said profit rose 18% on improved results at cable network ESPN and syndication sales of the ABC Studios-produced television programs “Grey’s Anatomy” and “According to Jim.”

The Burbank, Calif.-based media conglomerate said it earned $895 million, or 47 cents a share, compared with year-ago profit of $760 million, or 40 cents a share. Excluding an item, the company said it would have earned 46 cents a share in the latest three months.

Revenue rose 4% to $9.87 billion.

Analysts polled by Thomson Reuters expected to see a profit of 41 cents a share on sales of $9.31 billion.

Segment profit at the theme parks and resorts in the fourth quarter fell 17% to $344 million, as revenue fell 4% to $2.84 billion.

The unit was hampered by less guest spending–as average ticket prices and daily hotel room rates were lower–and an increase in costs related to an extra week of operations in the latest fourth quarter and higher labor expenses.

Before the earnings, the company said CFO Staggs would become chairman of its theme parks and resorts unit, while Jay Rasulo, the current chairman of the parks, would become CFO. Deutsche’s Mitchelson said the move was “a surprise,” but that the transition in each case “should go smoothly.”

“I didn’t give Tom a multiple choice in terms of where he was going to go, and I made both Tom and Jay offers that I felt they couldn’t refuse,” said Chief Executive Bob Iger during a conference call with analysts.

The company’s media networks division, which includes ABC, ESPN and Disney Channel, among other outlets, reported that its revenue jumped 14% to $4.73 billion, while its operating profit increased 26% to $1.49 billion.

ESPN was lifted by higher fees paid by cable and satellite operators. Ad revenue at the network declined, but ad sales are showing improvement in the current quarter, Iger said.

“They are seeing strength across multiple sectors,” Iger said.

Lynn Cowan of DJ
Hyatt Hotels Corp.’s (H) IPO proved Thursday what every hotel operator knows: Even when the industry is full of vacancy signs, people will line up for a bargain rate.

Despite its presence in a sector that is in the middle of an occupancy and rate slump, Hyatt’s stock priced within its expected range and shot higher in its first hour. Traders cited the IPO’s successful debut as a positive catalyst for the overall U.S. markets Thursday.

The deal’s early performance provided welcome relief during a rocky period for new U.S. stocks, and was reinforced by a 19% opening pop in a second IPO that launched Thursday, genealogy Web site Ancestry.com Inc. (ACOM).

In the last seven days, two IPOs that were expected to debut in the U.S.–energy company AEI and bank PlainsCapital Corp.–were pulled due to market conditions, and several offerings in recent weeks have priced poorly and traded down on their first days. Recent broad market volatility has made pricing more difficult for IPOs due to investor jitters.

Hyatt’s stock opened at $27 a share on the New York Stock Exchange, up 8% from its initial public offering price of $25; it was trading recently at $27.32. All 38 million shares in the offering were sold by the founder’s descendants, the Pritzker family, at a price within its expected range of $23 to $26 a share. Goldman Sachs Group Inc. (GS) managed the deal.

The hotel chain, the 10th-largest in the world based on number of rooms, was plagued with investor uncertainty about its offering in recent weeks, but analysts were in agreement that the company’s price range represented a bargain. Morningstar Inc. (MORN) analysts valued the shares at $25, while IPOdesktop.com President Francis Gaskins said the company priced its shares below the company’s book value of $29.

Among the positives for Hyatt are its strong brand name, a low-debt balance sheet, and a healthy stash of cash compared to its rivals. Although its room revenue has been in a decline and it has posted a loss so far in 2009, optimists could argue that if investors want to buy a hotel chain at this low point in the industry’s cycle, Hyatt is the one to own.

A strong balance sheet “gives them dry powder to strengthen their position strategically. They can be acquirers at time when there are not a lot of buyers out there,” said Todd Jordan, a managing director and analyst at Research Edge LLC in New Haven, Conn.

At Ancestry.com, shares opened at $16.10 on the Nasdaq, up from its initial public offering price of $13.50; shares were changing hands recently at $15.15, up 12%. A total of 7.4 million shares were sold at the midpoint of its expected $12.50 to $14.50 price range, which was set by underwriters Morgan Stanley (MS) and Bank of America Corp.’s (BAC) Bank of America Merrill Lynch unit.

Two more IPOs are expected to trade in the U.S. this week. Solar panel component maker STR Holdings Inc. is scheduled to trade under the symbol STRI, while Chinese printing equipment supplier Duoyuan Printing Inc. will trade as DYP; both are listing on the NYSE.

(Bloomberg) – Wynn Resorts Ltd., the casino company founded by Stephen Wynn, declined the most in five months in U.S. trading after reporting a 33 percent drop in third-quarter profit.

Wynn fell $4.81, or 7.6 percent, to $58.27 at 12:10 p.m. New York time on the Nasdaq Stock Market and slid as much as 10 percent, the biggest intraday decline since May 13. Before today, the shares had gained 49 percent this year.

“Wynn has continued to struggle to gain traction with Encore,” the new resort in Las Vegas, said Christopher Jones, an analyst at Telsey Advisory Group in New York. Some investors had “high expectations for the quarter.”

Net income dropped to $34.2 million, or 28 cents a share, from $51.2 million, or 49 cents, a year earlier, Las Vegas-based Wynn said today in a statement. Excluding some items, profit of 33 cents beat the 16-cent average of 18 analysts’ estimates compiled by Bloomberg. Revenue rose to $773.1 million from $769.2 million. Analysts on average projected $743.4 million.

With the addition of 2,034 Encore suites to the 2,716 rooms at Wynn Las Vegas, the company’s Strip revenue rose 10 percent, occupancy fell and revenue per room declined. Gambling at all Strip casinos slid almost 14 percent this year through August.

Wynn’s combined adjusted property earnings before interest, taxes, depreciation and amortization, an indicator of cash flow, rose 12 percent to $198.2 million, beating the $180.1 million average estimate of 14 analysts surveyed.

More Rooms, Fewer Bets

In Las Vegas, ebitda was little changed at $70 million at Wynn’s namesake resort and its neighbor Encore. Encore opened in December and the casino reduced win per table and slot machine.

Wynn’s Las Vegas table-game betting fell 2.4 percent to $518.1 million. The slots’ $850.3 million win was “in-line” with a year ago. Encore added 91 new tables and 812 slots.

Wynn’s Las Vegas occupancy fell to 83.9 percent from 96.1 percent a year earlier. Revenue generated by each room available in Las Vegas tumbled 33 percent to $176.

Overall Las Vegas Strip gambling fell 9 percent in August. Casinos have slashed room prices and increased special offers to counter the drop in corporate meetings and betting.

In Macau table-game betting by so-called VIPs, people who spend at least %125,000 per visit, rose 6 percent, while mass market action fell 12 percent.

“If you had to nitpick, the VIP hold rate was slightly below historical range, and the mass business in Macau was a little soft,” Jones said.

Wynn’s adjusted property ebitda in Macau climbed 21 percent $128.2 million. The company reiterated it will open a second resort in the first half of 2010. Wynn raised about $1.87 billion selling a stake in the Macau operation this month.

Macau’s revenue per available room was little changed at $235. Occupancy rose to 89.2 percent from 86.2 percent.

Overall Macau casino revenue rose to 31.8 billion patacas ($3.98 billion) in the third quarter, the city’s Gaming Inspection and Co-ordination Bureau Web site said on Oct. 16.

By A.D. PRUITT

NEW YORK—Marriott International Inc. swung to fiscal-third quarter loss amid write-downs of its time-share business. But the results beat Wall Street’s targets and suggest that stabilization in the recession-battered hotel industry is finally gaining traction.

Amid sagging revenue at its core hotel business there were signs the hotelier has seen the worst of the declines. For the coming fiscal year Marriott expects world-wide revenue per available room may decline as much as 5%, excluding currency effects, with performance strengthening as the year progresses.

For the quarter ended Sept. 11, the company reported a loss of $466 million, or $1.31 a share, compared with a prior-year profit of $94 million, or 25 cents a share. Excluding items such as the write-downs, earnings fell to 15 cents a share from 34 cents a share and surpassed analysts’ targets of 13 cents a share.

Given that Marriott is the bellwether for the hotel earnings season, the company’s better-than-expected results are likely to bode well for other major lodging companies such as Starwood Hotels & Resorts Worldwide Inc. and Host Hotels & Resorts that report later this month.

Although hotel room rates and revenue projections continue on a downward spiral, lodging stocks have been on a torrid upswing as investors try to get ahead of any recovery. For example, Marriott’s stock is up 40% this past year.

“We believe there is a strong chance MAR and most lodging companies will beat 3Q earnings expectations. However, we believe this is built into most expectations,” wrote C. Patrick Scholes, an analyst at FBR Capital Markets in a report Wednesday.

“We think that investor focus will shift squarely towards the outlook for group bookings and current state of corporate volume negotiations, which typically pick up steam in the second half of the year,” he said.

Marriott said international markets are expected to show more strength than in North America.

However, because of the economy, the company again declined to provide its typical earnings guidance.

Major time-share companies such as Marriott, Starwood and Wyndham Worldwide Corp. have scaled back on development and sales the past year. Marriott recently said it would stop new time-share development and exit the luxury residential segment, which includes condominiums and penthouses atop or adjacent to its hotels.

The company in July had forecast earnings of nine cents a share to 14 cents a share.

Revenue decreased 17% to $2.47 billion as revenue per available room, or revpar, slumped 22%. Analysts polled by Thomson Reuters most recently expected $2.39 billion.

For the fiscal fourth quarter, the company expects earnings of 20 cents a share to 23 cents a share on revpar declines of 13% to 16% in North America and 16% to 18% elsewhere in constant dollars. Analysts projected earnings of 22 cents a share.