Hoteles City Express Investor Presentation February 2018 1 1 - PowerPoint PPT Presentation

Hoteles City Express Investor Presentation February 2018 1 1

Disclaimer This presentation has been prepared with information about Hoteles 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. Santiago Mayoral Alvarez Corporate Finance and Investor Relations Tel: +5255 5249-8050 smayoral@hotelescity.com www.cityexpress.com/en/investors 2

Hoteles City Express Today 3

Hotel Platform with the Biggest Growth in Mexico and Latin-America Historic Growth of the Hotel Chain Number of Rooms 15,228 13,702 11,944 10,929 +26.2% 9,326 8,092 6,973 5,562 4,991 3,836 2,850 2,173 1,542 1,061 586 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Number of Hotels 5 10 15 20 26 35 45 50 62 71 82 96 106 123 135 Opening of Launch Launch Launch Launch First International first hotel Follow-on Initial Public Hotel in Costa Offering Offering Rica 4

One Brand and Five Successful Products to Serve our Market Segment • Flagship Brand • City Express • Budget segment • Extended stay • City Express Description • Essential product located in brand brand product within city • Same quality • Apartment-style amenities Premium locations downtowns with • Economy segment within smaller layout Premium decor rooms 23 m 2 (248 ft 2 ) 17 m 2 (183 ft 2 ) 30 m 2 (323 ft 2 ) 23 m 2 (248 ft 2 ) Average Room Size 23 m2 (248 ft2) MXN $1,000 – MXN $ 1,800 – Average Daily Rate MXN $600 – $1,200 MXN $500 – $750 MXN $750 – $1,700 (ADR) $1,500 $3,000 100 – 150 70 – 150 105 – 134 26 – 120 35 – 80 Rooms per Hotel # of Hotels (1) 83 17 22 11 2 # of Rooms (1) 9,672 2,275 2,476 658 147 Market Segments Target ADR (MXN) Room Distribution by Brand > $1,700 4% 16% $800 - $1,700 15% 64% $500 - $800 5 (1) As of December 2017

Leading Position in Limited Service Hotels in Mexico Number of Hotels per Chain As of December 2017 157 129 112 62 50 46 44 40 35 34 30 21 Number of Hotels per Brand As of December 2017 Select Services Limited Services 97 72 62 55 50 33 32 29 29 21 17 17 17 15 14 14 14 13 12 11 11 7 Source 1. Euromonitor, quarterly results & company websites 6

135 Hotels Distributed Among the Main Economic Drivers for the Region Maquila and logistics San José, Costa Exportation Corridor Rica (NAFTA) Mining Corridor Oil and Energy Corridor Agricultural Exportation Corridor (NAFTA) Colombia Manufacturing, Logistics and Industrial Exportation Corridor (NAFTA) Chile Hotels in Operation 7

Complete Exposure to Hospitality Value Chain Hoteles City Express Current Business Model PropCo OpCo Hotel Operation Distribution and Digital Development Platform Hotel Ownership Platform Marketing • Strong Brand positioning • 25,000+ rooms developed • Owned hotels • Best in class operating by the Hoteles City margins • Co-owned hotels • 80% of total bookings Express team • Standardize processes, through own channels • Leased hotels • Systematic and room and furniture design • Loyalty program City • Primary focus on ownership streamlined design and • Brand licensing through Premios with more than and co-ownership of hotels development 600 k members Franchise Contracts – 50% ownership in – Low, predictable costs • +8,000 corporate • Yield management coinvestments – Benefit from scale in agreements systems and decision – Partners contribute land development making based on real-time • Eficient and targeted and capital as well as market information • Strong ROIC track record marketing efforts local market knowledge • Control over entry cap rates FIBRAS International Chains Independent Hotels 8

Significant Value Embedded in HCE’s Assets Balance Sheet Structure Asset Base Considerations As of December 31, 2017  HCE holds Ps$1,646.0 million MXN MXN 12,177.1 12,177.1 in construction in progress and Millions Millions landbank and Ps$8,500 million in net productive assets Cash and Equivalents 10% Financial  Assets acquired or developed 22% Recoverable Taxes Debt 7% before Dec. 31, 2010 were revalued at that date. Assets 6% Landbank Other acquired or developed after 8% 8% Liabilities Constructions 2010 have been stated at cost in Progress  Wholly owned hotels in Mexico that were opened before Dec. 31, 2015 account for 56% of net productive assets, representing 42 properties 83% Productive Assets  On this sample of hotels, a third Shareholders ’ 70% (Established and 69% Equity party appraisal concluded that Non-Established the value for the portfolio at Hotels) market prices was Ps$5.7 bln, representing a 40% revaluation to book value Net Fixed Assets Assets Liabilities + Shareholders’ 9 Equity

Transaction Overview 10

Spin-off Trend of Hotel REITS in the US Advantages of Moving into Asset-light Large branded lodging firms with robust real Structure estate portfolios have traditionally spun-off most of their properties and moved into an asset-light  Enhance the returns on invested capital structure − Some of the most prominent transactions  Focused management and business include: specificity  Reduce capital intensity /  Leverage operating platform /  Increase hotel growth rates  Minimize exposure to potential cyclicality / of the industry  Move to a more efficient tax structure (1)  Full transparency in operating metrics Notes 1. Publicly announced spin-off plans 11

Transaction Summary  FIBRA STAY Vehicle  Bolsa Mexicana de Valores (BMV) Listing  Public offering in Mexico Offering Structure  Ps$ 2,000 million – Ps$2,500 million for a minority stake over the vehicle Total Offering  100% Primary Initial Public Offering Type of Offering  Intercompany debt repayment with HCE and ISAI tax payments Use of Proceeds  HCE will use proceeds to accelerate development pipeline  Week of march 19, 2018 Pricing Date  . Company’s Counsel  . Agents Counsel  . Tax Advisors  . Auditor  . Agents 12

Transaction Objectives 1 Enhance transparency, capture and take advantage of the market value of HCE’s real estate assets 2 Generate liquidity to support the growth in hotel units for the 2019 – 2022 period 3 Establish a sustainable asset recycling mechanism allowing continuous growth without diluting shareholders 4 Generate transparency on performance and profitability HCE key business segments 13

FSTAY Competitive Advantages 1 Best in Class Diversified and Established Portfolio 2 Robust Operating and Financial Performance 3 Operation by a Leading Hotel Brand in LatAm Region Significant Growth Potential Based on a Disciplined 4 Acquisition Strategy and Access to Development Pipeline on a Proven Business Model Internally Managed with Incentives Properly Aligned 5 Towards Investors and Total Transparency 6 Conservative Capital Structure and Debt Profile 14

Sustainable Recycling Capital Vehicle FSTAY can take advantage of its relationship with HCE to Public Investors create a sustainable growth cycle Capital CBFIs Resources Provides capital for hotel construction Capital Raise Develops and operates hotels Has the obligation to FSTAY offer stabilized hotels to FSTAY before anyone else 15

Best In Class Diversified and Established Portfolio Occupancy Rate % Ps$ 70 1,000 969 65 879 900 63.0 61.5 61.8 61.2 60 800 58.7 58.6 58.4 57.6 795 759 741 55 679 700 715 697 50 600 2010 2011 2012 2013 2014 2015 2016 2017 Occupation Rate ADR 16

Robust Operating and Financial Performance (2) (1) EBITDA Total Sales Ps$MM Ps$MM 1,159 421 1,200 450 1,012 347 824 275 800 300 400 150 0 0 2015 2016 2017 2015 2016 2017 (4) NOI (3) AFFO Ps$ Ps$MM 371 400 277 304 300 240 214 170 200 200 100 0 0 2015 2016 2017 2015 2016 2017 Notas 1. Considers Ps$20.9MM, Ps$20.7MM and Ps$19.6MM from other revenues for 2015, 2016 y 2017, respectively 2. Does not consider Ps$15.5MM, Ps$15.9MM and Ps$16.4MM of SG&A for 2015, 2016 y 2017, respectively 3. Calculated as EBITDA – FF&E 4. Net Income + Income Taxes + D&A – FF&E 17