Travel Weekly Digital Edition

TRAVEL WEEKLY
PORTFOLIO

SYMBOL COMPANY NAME

AC.PA AKH AAI ALK AXP AMIE AMR CAR BYD BAY.L CCL CHH CAL DAL DIS DTG EXPE FRNT GET HET HA HTZ HLT IHG JBLU LVS MGM MAR NWA PCLN RLH RCL RYAAY LUV 0678.HK HOT STN TRXI LCC MTN WYN WYNN

Accor
Air France-KLM
Air Tran Holdings
Alaska Air Group
American Express Co.
Ambassadors International
AMR Corp.
Avis Budget Group
Boyd Gaming
British Airways
Carnival Corp.
Choice Hotels International
Continental Airlines
Delta Air Lines
The Walt Disney Co.
Dollar Thrifty
Expedia
Frontier Airlines
Gaylord Entertainment Co.
Harrah’s Entertainment
Hawaiian Airlines
Hertz Global Holdings
Hilton Hotels Corp.
InterContinental Hotels
JetBlue Airways Corp.
Las Vegas Sands Corp.
MGM Mirage
Marriott International
Northwest Airlines Corp.
Priceline.com
Red Lion Hotels
Royal Caribbean
Ryanair Holdings
Southwest Airlines
Star Cruises
Starwood Hotels & Resorts
Station Casinos
TRX
US Airways Group
Vail Resorts
Wyndham Worldwide
Wynn Resorts

VALUE 6/20/07

$66.36 $46.60 $11.58 $28.19 $62.05 $31.52 $27.00 $29.80 $50.35 $431.75 $49.39 $39.97 $34.44 $19.36 $34.19 $42.87 $29.21 $5.86 $54.51 $85.30 $3.78 $25.52 $35.18 $25.94 $11.11 $76.06 $80.60 $45.62 $23.00 $65.70 $12.30 $41.93 $38.28 $14.88 $2.39 $69.45 $87.58 $3.05 $29.71 $63.35 $36.60 $90.97

VALUE 6/20/06

$45.43 $21.12 $14.04 $38.70 $52.17 $23.83 $24.98 $20.79 $39.35

$362.25
$39.62
$52.31
$27.25
N/A
$28.97
$42.70
$15.00
$6.43
$41.36
$70.04
$3.32
N/A
$26.58
$20.46
$12.23
$67.19
$39.92
$35.98
N/A
$29.88
$10.99
$36.95
$26.45
$16.28
$1.42
$56.88
$66.81
$8.69
$47.47
$33.75
N/A
$64.40

%
CHANGE

46. 1

120.6

- 17. 5

- 27. 2

18. 9

32. 3

8. 1

43. 3

28.0

19. 2

24. 7

- 23. 6

26. 4 N/A 18.0 0.4 94.7 - 8. 9 31. 8 21. 8 13. 9 N/A 47. 1 26. 8 - 9. 2 13. 2 101.9 26. 8 N/A 119.9 11. 9 13. 5 44. 7 - 8. 6 68. 3 22. 1 24. 2 - 64. 9 - 37. 4 87.7 N/A 41. 3

CUMULATIVE

$1,958.82 $1,571.99 24. 6

CUMULATIVE (NOT INCLUDING AIRLINES) $1,275.64 $971.47 31. 3

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Go to www.travelweekly.com, click on Research
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RESEARCH
Taking kids along on business trips is becoming more
popular, increasing 19% in just 5 years.
Business Travel with Kids, 2000 - 2005 (in trips)
2000 68 million
2001 62 million
2002 65 million
2003 69 million
2004 76 million
2005 81 million

Source: Travel Industry Association TravelScope®/DIREC TIONS® by DKS&A

MONEY

NEW JOINT VENTURE WILL LAUNCH WITH USED SHIP

Carnival loses shipyard slot for TUI vessel

By Johanna Jainchill

Carnival Corp. plans to transfer a ship from one of its 10 cruise brands to launch a cruise line being formed by Carnival Corp. and German tour operator TUI.

During its second-quarter earnings calls with analysts, Carnival said that due to regulatory delays in closing the joint-venture transaction between Carnival and

TUI, it had lost the 2010 delivery slot at Fincantieri’s yard in Sestri Ponente,

Italy.

Carnival had previously announced it would use the slot to build a ship for the new cruise line.

“As a result of the delays in the TUI Howard Frank transaction, it’s no longer feasible to ^COObuild a new TUI ship for a 2010 de- ^Carnival ^Corp.livery,” said Carnival COO Howard

Frank.

Instead, Carnival will transfer an existing Carnival Corp. ship into the TUI cruise brand in 2009, starting the venture sooner than planned.

The TUI transaction is now expected to close in the fourth quarter of this year, behind the company’s original expectation of the first half of this year, Frank said.

Carnival CEO Micky Arison would not say from what brand the ship would be transferred but said it would be a “relatively modern” ship.

Arison did not rule out moving additional Carnival Corp. ships to the TUI venture down the line.

“We’ll have to see on the TUI brand,” he said. “Once that gets started, we have the potential to grow it as rapidly as is warranted, as we have with Aida [Carnival’s German-fo-cused cruise line].”

Carnival had previously decided to move existing Carnival Corp. tonnage to a joint venture it formed with Iberojet.

Carnival said it expected to close that transaction in the second half of 2007, as well.

Carnival’s plans speak to its quarterly results: Continued strength in Europe led to a slight gain in second-quarter profits, offsetting continued weakness in the Caribbean.

Carnival posted a $390 million profit for its second quarter, which ended May 30, up from $380 million in the same period a year ago.

While the Caribbean was still experiencing pricing pressure, the company’s brands outside of North America produced significant revenue yield growth, Arison said.

“The decision to expand our European cruise business is working, with the strength of our European brands offsetting some cyclical weakness in the contemporary segment of North

America,” Arison said.

Due to higher-than-expected fuel prices, Carnival lowered its full-year earnings guidance. But Frank said that pricing was improving in the second half of 2007 and into 2008, especially in the Caribbean, which he noted was a result of getting “aggressive pricing out there.”

Booking volume for Carnival Cruise Lines, which has the majority of its capacity in the Caribbean, is up 18% over last year on a 5.5% capacity increase.

Micky Arison
CEO
Carnival Corp.

CARNIVAL CORP.

Revenue

2Q ’07

$2.9B

2Q ’06

$2.7B

%Change

9%

Net income

$390M

$380M

2.6%

Robert’s Hawaii employees get stake in company

By Michelle Baran

Robert’s Hawaii is giving employees a piece of the family pie.

The family-run, Honolulu-based tour operator is transferring 43.5% of the company to its 1,405 employees in the form of an Employee Stock Ownership Plan.

Under the plan, CEO Robert Iwamoto Jr. and his partners, most of whom are family members, will cede partial ownership to the employees.

Neil Takekawa, the company’s president, will continue in his role.

“Our employees are very appreciative to receive this added benefit and incentive, and that’s creating a strong positive feeling,” said Takekawa. “It’s a benefit for helping Robert’s Hawaii become the state’s leading transportation and entertainment company, and it is an incentive for each of us to look at our jobs as an owner … and always looking to increase the value of the company in the years ahead.”

According to New York-based Corporate Solutions Group, an investment banking firm that designed and helped implement the ESOP, the draw for Robert’s Hawaii is healthy tax benefits and greater employee loyalty.

“This is a great investment for the employees,” said Alex Meshechok, managing director of Corporate Solutions.

According to Meshechok, employees do not pay into the ESOP, which was created on Jan. 1 and formally announced to the employees last week.

When employees leave the company or retire, they can sell their share back to the company. However, payment can only be made after the ESOP loan is fully paid, which

A Robert’s Hawaii motorcoach in Waikiki.

will be in six years. Assuming the company continues to grow, the employees stand to profit. (If the company declares bankruptcy, the employees net zero.)

Consequently, employees have a vested interest in contributing to the growth of the company, according to Meshechok.

“It’s a big trend in family-run businesses,” he said, adding that ESOPs enable families to maintain control of their businesses while sharing its growth potential with employees, rather than being forced to sell it to another company or private equity group.

Though Robert’s Hawaii does not release its earnings, Meshechok said that Corporate Solutions generally helps create ESOPs for clients that have annual earnings before tax and interest of between $5 million and $50 million.

Iwamoto’s father, Robert Iwamoto Sr., founded Robert’s Hawaii in 1941. Today, the company operates diverse services on Hawaii’s four largest islands, including tours and transportation.