Corporate Presentation November 2014 Disclaimer This presentation - - PowerPoint PPT Presentation

Corporate Presentation

November 2014

This presentation has been prepared with information about Hotels City Express, S.A.B. de C.V. ("HCITY" or the "Company"). The presentation is not intended to be exhaustive and does not necessarily include all the information the receiver should want to be informed of the Company. The forward-looking statements contained in this presentation are based on the current assumptions and outlook of the Company’s management. Actual results, performance and events may differ significantly from those expressed or implied in these forward-looking statements as a result of several factors such as the general and economic conditions in Mexico and abroad, interest and exchange rates, future renegotiations, pre-payments of liabilities or loans denominated in foreign currency, changes in laws and regulations, and general competitive factors (regionally, nationally or internationally). All communications, inquiries and requests for information related to these materials should be directed to the contacts listed below.

Disclaimer

2 Abelardo Loscos Corporate Finance and Investor Relations Director Tel: +5255 5249-8056 aloscos@hotelescity.com

Delivering on Our IPO Story

Ce Patio Universidad, Mexico City

4

We are the Leading & Fastest Growing Hospitality Platform in Mexico

586 1,061 1,542 2,173 2,850 3,836 4,991 5,562 6,973 8,092 9,326 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

(# of Rooms (2))

5 10 15 20 26 35 45 50 62 71 Hotels(2)

Opening of first hotel in Saltillo, Coahuila (North of Mexico) Launch of Launch of First international hotel opened in San Jose, Costa Rica

(1) Based on information prepared by the Company using publicly available information (2) Number of hotels and rooms at the end of the period

IPO

Business Platform that Provides a Unique Exposure to Hospitality in Mexico(1) Accelerated Growth in the Economy & Budget Lodging Segments Through New-Hotel Development

 The largest limited service hotel chain in Mexico  Fully integrated platform spanning the complete

hospitality value chain with best-in-class development and distribution capabilities

 Three distinct lodging formats designed to serve

the domestic business traveler and capture middle class expansion in Mexico

 Diversified geographic footprint geared towards

expected GDP growth in Mexico and structural reform-driven economic activity

 Consistent track record of financial performance

E 11,280

82 100

 Significant embedded growth in recently built

inventory

 Organic expansion potential in our target markets

due to lower density of hotels per capita, ADRs and occupancy rates

 State-of-the-art distribution systems at the

forefront of industry trends

5

Delivering on our Business Plan Since our IPO

We Have Consolidated our Position as the Leading Limited Service Hotel Platform in Mexico… …by Accelerating our Hotel Development Pipeline… …Opening More Hotels in Our Segment than any Other Chain… …and Expanding our Domestic and International Footprint

(# of New Hotel Openings) 5 12 9 11 13 18 2010 2011 2012 2013 2Q14 LTM 2014E 72 hotels opened from May 2003 to

• ur IPO in June 2013

(1 new opening every 7.3 weeks) 28 hotels expected to open from our IPO to December 2014 (1 new opening every 2.9 weeks) 90 31 11 11 11 71 18 7 11 8 Hoteles City One Hoteles Real Inn Ibis Comfort Inn As of June 2014 As of December 2012 (# of Hotels in Operation)

(1) Includes all Hoteles City brands; includes 88 hotels in Mexico, 1 hotel in Costa Rica and 1 hotel in Colombia as of September 30, 2014 (2) Includes for Posadas, One Hoteles and Gamma; for Grupo Real Turismo, Real Inn; for Choice Hotels, Comfort Inn (3) Includes 14 hotels opened in Mexico and 1 in Colombia from December 2012 to September 2014

(Increase in # of Limited Service Hotels(2) from December 2012 to June 2014) 19 14 4 3 Hoteles City Posadas Grupo Real Turismo Choice Hotels

(1) (3)

Mexico Rest of Latin America

Source Information prepared by the Company based on publicly available information including, prospectuses, quarterly reports, websites and press releases Source Information prepared by the Company based on publicly available information including, prospectuses, quarterly reports, websites and press releases

Hotel openings since our IPO Hotels under development Countries with Hoteles City presence Countries planned for future expansion

6

Delivering on our Business Plan Since our IPO (Cont’d)

We Have Fulfilled our Hotel Opening Schedule as Planned and Within Budget… …While Continuing to Build a Highly Visible Development Pipeline to Reach 100 Hotels in 2014

Hotel Development Pipeline at IPO (Scheduled Openings for 2013) Current Hotel Development Pipeline (Scheduled Openings for 2014)

Opened Hotel

• Scheduled Openings
• Ce Chetumal

Opened: March 2013 Ce Santa Fe / CS Santa Fe Opened: June / August 2013

73/74

75

Ce Oaxaca Opened: October 2013

76

Ce Salina Cruz Opened: October 2013

77

Ce Patio Universidad Opened: December 2013

78

Ce La Paz Opened: December 2013

79

Cj Puebla Autopista Opened: December 2013

80

Ce Cali (Colombia) Opened: December 2013

81

Ce Cananea Opened: December 2013

82

Ce Irapuato Norte Opened: December 2013

83

Cj Cd. del Carmen Opened: February 2014

84

Cj Cd. del Carmen (Aeropuerto) Opened: February 2014

72

Ce Salamanca Estimated Opening: 4Q14 Cj Villahermosa Estimated Opening: 4Q14 Ce Tehuacan (Puebla) Opened: March 2014

86 85 87 88

Ce Paraíso (Dos Bocas) Opened: May 2014 Ce Monterrey Norte Opened: August 2014 Ce DF Central de Abastos Opened: September 2014 CS Puebla Autopista Opened: September2014

90 89

Ce Apizaco Opened: September 2014 Ce Cd. Victoria Opened: October 2014 Ce Matamoros Estimated Opening: 4Q14

94 95 96

Ce Cabo San Lucas Estimated Opening: 4Q14 CS Cabo San Lucas Estimated Opening: 4Q14 Cj Toluca Cd. Industrial Estimated Opening: 4Q14 Ce Tuxpan Estimated Opening: 4Q14

98 97 99 91

100

92

Ce Plus D.F. Satélite Opened: October 2014 Ce Monterrey Nuevo Sur Estimated Opening: 4Q14

93

30.5 35.0 9M 2013 9M 2014 7

(1) Defined as hotels with at least 36 months in operation (2) Adjusted EBITDA calculated as operating income + depreciation + amortization + expenses associated with the opening of new hotels (3) Average rooms in operation calculated as beginning of period rooms plus end of period rooms divided by two

Number of Hotels in Operation

Growth has Been Accompanied by Consistent Improvement Across All Key Operating and Financial Metrics

% Non Established

(1)

35% 36% Established Non-Established (Thousand Rooms)

Installed and Occupied Room Nights

48 58 26 32 9M 2013 9M 2014 90 74 2,250 2,637 1220 1535 9M 2013 9M 2014 Installed Occupied # of Hotels

Revenue per Available Room (RevPAR)

(MXN Millions)

Revenue, Adj. EBITDA and Margin(2)

• Adj. EBITDA per Average Rooms in Op.(3)

797.8 251.4 342.0

31.5% 33.6%

9M 2013 9M 2014 Revenue (MXN Thousands) (MXN) 392 427 412 438 9M 2013 9M 2014 Total Chain Established (1)

• Adj. EBITDA Margin

Average Daily Rate (ADR) & Occupancy

(MXN and %) 724 733 719 715 54.2% 58.2% 57.3% 61.3% 9M 2013 9M 2014 Total Chain Established (1) Total Chain Established (1) ADR: Occupancy:

• Adj. EBITDA

1,018.5

Hoteles City – A Unique Hospitality Investment Opportunity

1

Leading Position in Markets with Attractive Dynamics, Solid Fundamentals and Untapped Growth Potential

4

Embedded Growth in Recently Built Properties and a Solid Balance Sheet Support our Continued Expansion

2

Fully Integrated Hospitality Platform Provides Unique Exposure to the Lodging Industry in Mexico

3

Clearly Defined and Executed Business Plan has Delivered Exceptional Growth Accompanied by Strong Financial Performance

5

Deeply Ingrained Ethos of Corporate and Social Responsibility

Hoteles City – A Unique Hospitality Investment Opportunity

4

Embedded Growth in Recently Built Properties and a Solid Balance Sheet Support our Continued Expansion

2

Fully Integrated Hospitality Platform Provides Unique Exposure to the Lodging Industry in Mexico

3

Clearly Defined and Executed Business Plan has Delivered Exceptional Growth Accompanied by Strong Financial Performance

5

Deeply Ingrained Ethos of Corporate and Social Responsibility

1

Leading Position in Markets with Attractive Dynamics, Solid Fundamentals and Untapped Growth Potential

10

We are the Largest Hotel Chain in our Target Segment

Source Information prepared by the Company based on publicly available information including, prospectuses, quarterly reports, websites and press releases

124 41 133 24 31 35 26 41 35

Select-Service Hotel Brands Limited-Service Hotel Brands

As of November 2014 As of November 2014 Limited Service Hotels Full and Select Service Hotels

Number of Hotels by Chain in Mexico Number of Hotels by Brand in Mexico

84 + + 33 90 91 61 50 47 16 15 12 11 10 7 72 33 12 11 11 11 6 6 5 5 4 5

Strategically Planned Geographic Footprint and Deployment of Capital Aligned with the Key Drivers of Economic Activity

Hotels in Operation 2014 Openings

Maquila Export and Logistics Corridor Strategically Planned Footprint Provides Diversified Exposure to Mexico’s Main Business, Industrial and Commercial Hubs and Corridors… Energy, Petrochemical, and Export Corridor NAFTA Agricultural Export Corridor NAFTA Industrial, Manufacturing, Logistics and Export Corridors … with a Balanced Leverage to the Main Drivers of Economic Activity A B C Mining Corridor D A

• Recently enacted Energy Reform
• Opening of oil and gas sector to

private participants B

• Growth of Mexico’s manufacturing

sector driven by global economic recovery and increased labor and energy cost competitiveness

• Recently announced investments

by auto manufacturers and suppliers C

• Economic recovery of the United

States, Mexico’s main business partner

• Resurgence of maquila industry
• Decreasing levels of violence in

northern Mexico D

• Recently enacted structural

reforms in the mining sector E

• Resuming government spending in

transportation infrastructure E

11

24% 13% 28% 34%

12

Geographic Coverage and Portfolio Mix

Geographic Coverage by Country Presence in Mexico

As of September 2014 As of September 2014

Colombia Costa Rica México 1% 98%

27% 3% 4% 4% 6% 7% 7% 4% 4% 7% 10%

3% 3% Tamaulipas San Luis Potosi Sonora Quintana Roo 3% 3% Coahuila Sinaloa Estado de México Chihuahua Jalisco 3% Otros (1) Querétaro Puebla Guanajuato Baja California Veracruz

México City

(1) Otros: Chiapas, Nuevo León, Oaxaca, Campeche, Michoacán de Ocampo, Yucatán, Baja California Sur, Aguascalientes, Durango, Tabasco, Colima, Zacatecas, Hidalgo

1%

Hotel Portfolio by Ownership 3Q14

Owned Co-Owned Franchise and Management Leased 25 31 Consolidated 76%

Hotel Portfolio by Brand 3Q14

City Express Suites City Express 68

75% 5% 13% 7%

6 12

As of September 2014, # Hotels and % of Total Portfolio

City Express Plus 4 City Express Junior

As of September 2014, # Hotels and % of Total Portfolio

12 22

13

Business Model Tailored to Best Serve Our Target Segments

…to Primarily Target Value Conscious Domestic Business Travelers

Hotel Industry Market Segments

Our Portfolio of Three Targeted Limited Service Hotel Brands...

Hoteles City Brand Portfolio Target Segment Description

• Flagship

brand

• Essential

amenities

• Economy

segment

• Flagship

brand

• City

express product located in premium locations with select design

• Budget

segment brand

• Same

quality but smaller rooms

• Extended-

stay brand

• Apartment
• style

layout

• Economy

segment Average Room Size 23 m2 (248 ft2) 23 m2 (248 ft2) 17 m2 (183 ft2) 30 m2 (323 ft2) Average Daily Rate (MXN) $ 600 – 1,200 $ 1,000 – 1,500 $ 500 – 750 $ 750 – 1,700 Rooms per Hotel 100 – 150 70 - 150 105 – 134 26 – 120 # of Hotels(1) 69 (75%) 5 (5%) 12 (13%) 6 (7%) # of Rooms(1) 7,992 (77%) 668 (6%) 1,348 (13%) 393 (4%)

(1) As of November, 2014

…Offers a Differentiated Value Proposition Within our Segment… Quality Value Convenience Consistency Geographic Coverage Safety

Market Segment Target ADR (MXN) > $1,500 $700 – 1,500 $500 – 700

14

Business Model Benefits from Industry Supply and Demand Dynamics

Hotel Supply – Fragmented and Dominated by Independent, Non-Standardized Hotels Hotel Demand – Driven by our Target Customers

Source: INEGI, Ministry of Tourism, Ministry of Communications and Transportation, JLL, PwC, Euromonitor

Hotel Rooms in Mexico by Quality – Breakdown by Number of Stars

2013

Breakdown of Independent and Chained Hotels

31 72 79 69 28 21 100 100 100 2012 (% of Rooms) Brazil United States Mexico Independent Chained

Occupied Room Nights by Nationality of Guests

2013 (% of Occupied Room Nights) 83 40 62 17 60 38 100 100 100 1 - 4 Stars 5 Stars All Hotels Domestic International

Tourism Spending in Mexico

2012 International Tourists Domestic Tourists (Million Passengers) 50% 55% 57% 60% 24.4 25.5 28.1 30.5 2010 2011 2013 2013 Low Cost Carriers Legacy Carriers Target segment 10% 90%

Domestic Airline Passengers

Mainly independent, family operated, non standardized hotels subject to substitution 179,968 135,986 113,961 62,265 180,116 5 Stars 4 Stars 3 Stars 2 Stars Others 46% of Total Rooms in Mexico

Hoteles City – A Unique Hospitality Investment Opportunity

1

Leading Position in Markets with Attractive Dynamics, Solid Fundamentals and Untapped Growth Potential

4

Embedded Growth in Recently Built Properties and a Solid Balance Sheet Support our Continued Expansion

3

Clearly Defined and Executed Business Plan has Delivered Exceptional Growth Accompanied by Strong Financial Performance

5

Deeply Ingrained Ethos of Corporate and Social Responsibility

2

Fully Integrated Hospitality Platform Provides Unique Exposure to the Lodging Industry in Mexico

16

Our Fully Integrated Business Model Provides Broad Exposure to Hospitality in Mexico

FIBRAS

Fully integrated platform provides flexibility and control over investment cost, growth, marketing and customer experience Development

• 19,000+ rooms developed

by the Hoteles City team

• Systematic and

streamlined design and development – Low, predictable costs – Benefit from scale in development

• Strong ROIC track record
• Control over “going in” cap

rates Hotel Ownership Marketing and Distribution

• Strong brand recognition
• Own distribution

channels account for vast majority of reservations

• City Premios guest loyalty

program

• Corporate and local

agreements

• Targeted and cost-efficient

marketing

• At the forefront of digital

and social media distribution Hotel Management & Franchising

• 31 owned hotels (1)
• 25 co-owned hotels (1)
• 12 leased hotels (1)
• Primary focus on
• wnership and co-
• wnership of hotels

– 50%+ ownership in co-

• wned hotels

– Business partners contribute land and/or equity and local market insight

• Best-in-class operating

margins

• Standardized room layouts,

furnishings and processes

• Brand licensing to third-

party hotel owners under management contracts

Independent Hotels

A B C

(1) As of June 30, 2014, excludes managed and franchised hotels

Leading Hotel Development Capabilities at the Core of Our Strengths

A

Streamlined and Replicable Development Processes

• “Out of the ground” new hotel development in as little as 6 months

Construction Begins Month 3 – 5 Month 5 – 7 Month 2 – 4 Month 4 – 6 Month 6 – 9: Opening

Difficult to Replicate Hotel Development Capabilities

Proven In- House Hotel Development Expertise

• More hotel and room openings since 2003 than

any other hotel chain in Mexico − One new hotel opened every 6.8 weeks on average since our first opening in 2003

• Capacity to develop up to 22 hotels per year
• On-budget international development experience

Predictable Costs and Time

• f Delivery
• Economies of scale in construction contracting

and purchasing furnishings and fixtures

• Competitive and highly transparent bidding

process with high-quality contractors

• Track record of meeting budgeted times and costs

International Standards

• All properties built to comply with highest safety,

fire and environmental standards

• Key differentiating factor from independent, non-

branded hotels predominant in our target segment Scalable Infrastructure

• Standardized and streamlined processes allow

us to scale hotel development capacity − Processes scalable to new markets / geographies Maintenance, Renovations and Improvements

• Based on strict guidelines that enable cost

control and consistent quality − Terms in contracts of managed hotels ensure periodic renovations based on our guidelines

17

Focus on Operating Efficiency Across our Organization

• Hotel-specific pre-opening

strategy

• Local customer

agreements

• Hotel level budgeting

based on local market knowledge Sales

Hotel Management Focused on Standardization and Efficiency Resulting in Scalability and Profitability

B

Expanding Margins from Scale and Operating Leverage

• Adj. EBITDA per Avg. Room(1) and Adj. EBITDA Margin (MXN Thousands)

(1) Adjusted EBITDA calculated as operating income + depreciation + amortization + expenses associated with the opening of new hotels; average rooms in operation calculated as beginning of period rooms plus end of period rooms divided by two (2) Defined as hotels with at least 36 months in operation.

30.3 37.1 41.1 30.5 35.0 26.5% 30.0% 32.4% 31.5% 33.6% 2011 2012 2013 9M 2013 9M 2014

• Adj. EBITDA Margin
• Adj. EBITDA per Room

Hotel Operations

• Standardized job functions

and employee training

• Elimination of non-

essential amenities

• Centralized inventory and

yield management

• Economies of scale in

hotel supplies procurement IT Infrastructure

• Proprietary IT infrastructure

platforms enable real-time monitoring for rapid decision making and yield management

• State-of-the-art

reservations platform Human Resources

• Focus on minimizing

employee turnover

• Continuous and

standardized training programs

• Employee satisfaction

surveys

18

Efficiency Results in Low Breakeven Occupancy

Occupancy

54.8% 56.8% 55.1% 54.2% 58.2% 59.4% 59.8% 58.0% 57.3% 61.3% 2011 2012 2013 9M 2013 9M 2014 Total Chain Established Hotels(2)

30%

Our hotels become

• perationally profitable

at average occupancy rates of ~30% at our target ADR

47% 27% 7% 6% 13%

Proprietary Marketing and Distribution Platforms at the Forefront of Evolving Consumer Behavior and Industry Trends

C

Multi-channel Proprietary CRS

• Multi-channel reservation platform:
• State-of-the-art digital media platform:

2013 Room Nights Sold by Channel Walk-ins and direct bookings Call Center Internet website City @ccess

• nline system

OTAs and GDSs CRS

87% of

reservations made through

• wn channels(1)

53% through

• ur CRS

26% through

electronic channels

(1) Including walk-ins and reservations made directly at the hotel

19

Market Intelligence

• 150+ regional, national and international in-

house hotel market studies

Leading Marketing and Distribution Platforms in Mexico

Sales and Marketing Levers

Marketing Programs

• City Premio loyalty program, accounting for

~20% of our reservations during 1H14

• Active marketing on social media:

Central Reservation System (“CRS”)

• Own system that manages room night

sales, corporate agreements, third-party vendors and e-commerce − Efficient inventory, ADR and yield management Corporate Sales

• 26 sales executives across Mexico and an
• ffice in Miami for international sales
• 7,500+ corporate and local agreements,

accounting for ~60% of our occupied room nights during 1H14 Corporate Alliances

• Airlines:

PR and Publicity

• Diversified media advertising

− Internet, pay TV, in-flight magazines, radio

Hoteles City – A Unique Hospitality Investment Opportunity

1

Leading Position in Markets with Attractive Dynamics, Solid Fundamentals and Untapped Growth Potential

4

Embedded Growth in Recently Built Properties, and a Solid Balance Sheet Support our Continued Expansion

2

Fully Integrated Hospitality Platform Provides Unique Exposure to the Lodging Industry in Mexico

5

Deeply Ingrained Ethos of Corporate and Social Responsibility

3

Clearly Defined and Executed Business Plan has Delivered Exceptional Growth Accompanied by Strong Financial Performance

21

Proven and Focused Strategy has Delivered Tangible Results

(1) Calculated as EBITDA divided by the sum of all direct development and opening costs for our owned and co-owned Established Hotels as of December 31, 2013 (2) Average development cost per room for hotels developed under the City express brand from 2011 to 2013, excluding those developed in Mexico City, Costa Rica and Colombia of MXN 598,000, equivalent to approximately US$46,000 assuming an indicative MXN/USD exchange rate of 13.00

Key Elements of Our Strategy Results

Expansion primarily through

• wnership and co-ownership
• f new-construction hotels
• Among the fastest growing hotel chains in Mexico

and Latin America

• High rates of return on new developments – average

ROIC above 12%(1) in owned and co-owned hotels

• Leverage our leading hotel

development capabilities

• Provides flexibility and control over

growth B

• Strong customer brand identification – ~87% of 2013

reservations made through own channels; guest loyalty program with over 370,000 subscribers Development of our brands through proprietary marketing and distribution platforms

• Key differentiator from FIBRAs and

independent hotels D

• Currently own and operate hotels in Costa Rica and

Colombia

• Established JV agreement for new hotel developments

in Chile and Peru and have begun to strategically acquire parcels of land to support these projects Focus in Mexico with selective expansion in Latin America

• Focus on markets with dynamics

similar to Mexico, including low penetration of chained hotels and high fragmentation

• Local partner JVs for market insight

E Maintain a Highly Visible Growth Pipeline through Continuous Identification of Opportunities

• 2013 IPO proceeds fully committed to ongoing

development projects expected to be completed in 2015

• Identified opportunities to construct 18 – 22 hotels per

year in the next 2 years

• Capitalize on organic expansion

potential of our target markets driven by favorable industry dynamics A

• Stable, predictable and low development costs –

~US$46,000(2) per room

• Low hotel breakeven points at ~30% occupancy
• Efficient hotel operations – 21 employees / 100 rooms

Strict focus on productivity, efficiency and cost control

• Across all areas of our organization

from hotel development to property management and marketing C

190 280 358 251 342 27% 30% 32% 32% 34% 22

Consistent Track Record of Profitable Growth

(1) The compound annual growth rates where calculated by the Company based on information displayed on this slide (2) Adjusted EBITDA calculated as operating income + depreciation + amortization + expenses associated with the opening of new hotels

Installed and Occupied Rooms Nights

(Thousand Rooms)

Consolidated Revenues

(MXN Millions)

Adjusted EBITDA(2) and Margin

(MXN Millions)

Consolidated Net Income

(MXN Millions) 2,230 2,693 3,040 2,250 2,637 1,223 1,531 1,675 1,220 1,536 9M 2013 2012 9M 2014 2011 2013 Occupied Installed 715 932 1,104 798 1,018 Margin

• Adj. EBITDA

10 26 84 56 94 1% 3% 8% 7% 9% Margin Net Income 9M 2013 2012 9M 2014 2011 2013 9M 2013 2012 9M 2014 2011 2013 9M 2013 2012 9M 2014 2011 2013

Hoteles City – A Unique Hospitality Investment Opportunity

1

Leading Position in Markets with Attractive Dynamics, Solid Fundamentals and Untapped Growth Potential

2

Fully Integrated Hospitality Platform Provides Unique Exposure to the Lodging Industry in Mexico

3

Clearly Defined and Executed Business Plan has Delivered Exceptional Growth Accompanied by Strong Financial Performance

5

Deeply Ingrained Ethos of Corporate and Social Responsibility

4

Embedded Growth in Recently Built Properties and a Solid Balance Sheet Support our Continued Expansion

366 388 398 427 405 413 414 438 350 375 400 425 450 2011 2012 2013 9M 2014 Total Chain Established Hotels

Significant Embedded Growth In Recently Built Inventory

24

Number of Hotels in Operation

(# of Hotels in Operation at the End of Each Period) 35 45 50 58 27 26 32 32 62 71 82 90 2011 2012 2013 9M 2014 % Non Established

(1)

Non Established Hotels Established Hotels

(1) Defined as hotels with at least 36 months in operation

Average Daily Rate (“ADR”)

(MXN) 668 683 722 733 682 691 714 715 650 675 700 725 750 2011 2012 2013 9M 2014 Total Chain Established Hotels

(1)

44% 37% 39% 36%

Occupancy

(%) 54.8 56.8 55.1 58.2 59.4 59.8 58.0 61.3 50 54 58 62 66 2011 2012 2013 9M 2014 Total Chain Established Hotels

(1)

+310bps

Revenue per Available Room (“RevPAR”)

(MXN)

(1)

+2.8% +2.5%

Solid Capital Structure Geared to Support Growth

25 Total Debt Outstanding: MXN 2,009.8 Million

Pro-forma1 Balance Sheet Structure

60% 76% 4% 4% 36% 20% 100% 100% Assets Liabilities + Shareholders' Equity Cash and Equivalents Hotel Assets Recoverable Taxes and Other Current Assets Financial Debt Other Liabilities Shareholders’ Equity MXN 10,028 Million MXN 10,028 Million

Financial Debt Maturity Schedule

As of September 30, 2014 2% 11% 8% 8% 12% 36% 7% 6% 5% 6% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Access to Diversified Financing Sources

Bank Debt by Counterparty as of September 30, 2014 34% 22% 9% 8% 6% 4% 17% HSBC Bancomext IFC Banamex Actinver Corpbanca Others (5) As of September 30, 2014

(1) Considers primary issuance of 109,696,093 shares, excluding greenshoe, a price per share of MXN 23.50 product a Follow On Transaction Exceuted on October 8, 2014

Hoteles City – A Unique Hospitality Investment Opportunity

1

Leading Position in Markets with Attractive Dynamics, Solid Fundamentals and Untapped Growth Potential

4

Embedded Growth in Recently Built Properties and a Solid Balance Sheet Support our Continued Expansion

2

Fully Integrated Hospitality Platform Provides Unique Exposure to the Lodging Industry in Mexico

3

Clearly Defined and Executed Business Plan has Delivered Exceptional Growth Accompanied by Strong Financial Performance

5

Deeply Ingrained Ethos of Corporate and Social Responsibility

Long Standing Commitment to Maintaining Corporate Governance Best Practices and Social Responsibility

Board of Directors Audit (100% Independent) Corporate Practices (100% Independent) Planning & Finance Procurement & Construction Compensation Nominations

Solid Institutional Sponsorship with a Broadly Diversified Investor Base Institutionalized Governance Aligned with Best Practices

Board Committees

Commitment to the Environment

EDGE Certification (IFC) – First certified building worldwide – 6 hotels certified + 8 in process of certification Biosphere Responsible Tourism (UNESCO) – First hotel chain worldwide in process

• f certification

– 28 certified hotels + all hotels expected to be certified by 2016 It is in our DNA. Why?

• 1. Because we care
• 2. Because our guests

and partners care

• 3. Because we strictly

comply with regulations

• 4. Because it makes

business sense – 30% and 40% reductions in energy and water use, respectively, at our EDGE-certified hotels LEED Certification (USGBC) – First hotel in Latin America – 6 certified hotels + 7 in process of certification

27

Social Responsibility and Sustainability

We collaborate with different

• rganizations focused on

promoting social awareness and nature preservation We support initiatives aimed at creating long-term value within

• ur communities through

education and entrepreneurship − Mainly independent Board of Directors (8 out of 9 Board members are independent)

9% 7% 57% 27% Morgan Stanley REF Affiliates IFC Affiliates Free float Other investors with holdings of less than 5% individually