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

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Hoteles City Express Investor Presentation

February 2018

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

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Hoteles City Express Today

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Hotel Platform with the Biggest Growth in Mexico and Latin-America

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

Historic Growth of the Hotel Chain

Number of Hotels

One Brand and Five Successful Products to Serve our Market Segment

Description

• Flagship Brand
• Essential

amenities

• Economy segment
• City Express

product located in Premium locations

• Budget segment

brand

• Same quality

within smaller rooms

• Extended stay

brand

• Apartment-style

layout

• City Express

product within city downtowns with Premium decor Average Room Size 23 m2 (248 ft2) 23 m2 (248 ft2) 17 m2 (183 ft2) 30 m2 (323 ft2) 23 m2 (248 ft2) Average Daily Rate (ADR) MXN $600 – $1,200 MXN $1,000 – $1,500 MXN $500 – $750 MXN $750 – $1,700 MXN $ 1,800 – $3,000 Rooms per Hotel 100 – 150 70 – 150 105 – 134 26 – 120 35 – 80 # of Hotels(1) 83 17 22 11 2 # of Rooms(1) 9,672 2,275 2,476 658 147 > $1,700 $800 - $1,700 $500 - $800 Target ADR (MXN) Market Segments 64% 15% 16% 4%

(1) As of December 2017

Room Distribution by Brand 5

6 72 62 55 33 32 29 29 17 17 15 14 13 97 50 21 17 14 14 12 11 11 7

Leading Position in Limited Service Hotels in Mexico

Source

• 1. Euromonitor, quarterly results & company websites

As of December 2017

Number of Hotels per Chain

Select Services Limited Services As of December 2017

Number of Hotels per Brand

157 129 112 62 50 46 40 35 44 34 30 21

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135 Hotels Distributed Among the Main Economic Drivers for the Region

Hotels in Operation

San José, Costa Rica Colombia Chile Maquila and logistics Exportation Corridor (NAFTA) Mining Corridor Oil and Energy Corridor Manufacturing, Logistics and Industrial Exportation Corridor (NAFTA) Agricultural Exportation Corridor (NAFTA)

FIBRAS

Development Platform

• 25,000+ rooms developed

by the Hoteles City Express team

• Systematic and

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

• Strong ROIC track record
• Control over entry cap

rates

Hotel Ownership Distribution and Digital Marketing

• Strong Brand positioning
• 80% of total bookings

through own channels

• Loyalty program City

Premios with more than 600 k members

• +8,000 corporate

agreements

• Eficient and targeted

marketing efforts

Hotel Operation Platform

• Owned hotels
• Co-owned hotels
• Leased hotels
• Primary focus on ownership

and co-ownership of hotels – 50% ownership in coinvestments – Partners contribute land and capital as well as local market knowledge

• Best in class operating

margins

• Standardize processes,

room and furniture design

• Brand licensing through

Franchise Contracts

• Yield management

systems and decision making based on real-time market information

Independent Hotels International Chains

Complete Exposure to Hospitality Value Chain

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PropCo OpCo Hoteles City Express Current Business Model

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Balance Sheet Structure As of December 31, 2017

Significant Value Embedded in HCE’s Assets

Asset Base Considerations

• HCE holds Ps$1,646.0 million

in construction in progress and landbank and Ps$8,500 million in net productive assets

• Assets acquired or developed

before Dec. 31, 2010 were revalued at that date. Assets acquired or developed after 2010 have been stated at cost

• Wholly owned hotels in Mexico

that were opened before Dec. 31, 2015 account for 56% of net productive assets, representing 42 properties

• On this sample of hotels, a third

party appraisal concluded that the value for the portfolio at market prices was Ps$5.7 bln, representing a 40% revaluation to book value

MXN 12,177.1 Millions MXN 12,177.1 Millions Financial Debt Other Liabilities Cash and Equivalents Landbank Productive Assets (Established and Non-Established Hotels) Recoverable Taxes Constructions in Progress Liabilities + Shareholders’ Equity 69% 8% 22% Assets 83% 7% 10% Net Fixed Assets 70% 8% 6% Shareholders’ Equity

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Transaction Overview

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Spin-off Trend of Hotel REITS in the US

Large branded lodging firms with robust real estate portfolios have traditionally spun-off most

• f their properties and moved into an asset-light

structure

−Some of the most prominent transactions

include: Advantages of Moving into Asset-light Structure



Enhance the returns on invested capital



Focused management and business specificity



Reduce capital intensity



Leverage operating platform



Increase hotel growth rates



Minimize exposure to potential cyclicality

• f the industry



Move to a more efficient tax structure



Full transparency in operating metrics

(1) Notes

• 1. Publicly announced spin-off plans

/ / /

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• 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
• HCE will use proceeds to accelerate development pipeline

Use of Proceeds

• Week of march 19, 2018

Pricing Date

• .

Tax Advisors

• .

Company’s Counsel

• .

Agents Counsel

• .

Agents

• .

Auditor

Transaction Summary

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Transaction Objectives

Enhance transparency, capture and take advantage of the market value of HCE’s real estate assets

1

Generate liquidity to support the growth in hotel units for the 2019 – 2022 period

2

Establish a sustainable asset recycling mechanism allowing continuous growth without diluting shareholders

3

Generate transparency on performance and profitability HCE key business segments

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FSTAY Competitive Advantages

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

3 4 2 5 1 6

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Sustainable Recycling Capital Vehicle

FSTAY

Public Investors

CBFIs Capital Resources Provides capital for hotel construction Has the obligation to

• ffer stabilized hotels

to FSTAY before anyone else Capital Raise Develops and

• perates hotels

FSTAY can take advantage of its relationship with HCE to create a sustainable growth cycle

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Best In Class Diversified and Established Portfolio

58.6 58.4 58.7 57.6 61.8 61.5 61.2 63.0 679 697 715 741 759 795 879 969 600 700 800 900 1,000 50 55 60 65 70 2010 2011 2012 2013 2014 2015 2016 2017 Occupation Rate ADR %

Occupancy Rate

Ps$

17 275 347 421 150 300 450 2015 2016 2017 Ps$MM

EBITDA

(2)

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

170 214 277 100 200 300 2015 2016 2017 Ps$MM

AFFO

(4)

Ps$MM 824 1,012 1,159 400 800 1,200 2015 2016 2017

Total Sales

Ps$ 240 304 371 200 400 2015 2016 2017

NOI

(1) (3)

Robust Operating and Financial Performance

18 21.0 34.1 27.0 8 17 26 35 FSTAY FINN FHotel 20.7 21.1 23.9 25.9 22.3 22.0 21.4 18.7 17.9 17 20 23 26 2015 2016 2017 / LTM FSTAY FINN FHotel % LTM (%) 24.9 25.4 28.2 30.1 24.3 22.0 22.4 19.4 21.0 17 22 27 32 2015 2016 2017 / LTM FSTAY FINN FHotel

FFO Margin LTV

% % 33.3 34.3 36.3 26.4 30.2 29.9 24.8 24.9 26.5 22 26 30 34 38 2015 2016 2017 / LTM FSTAY FINN FHotel

EBITDA Margin AFFO Margin

(5)

Notas

• 1. 3Q17LTM for FINN and FHotel, 2017 for FSTAY
• 2. Does not consider Ps$15.5MM, Ps$15.9MM and Ps$16.4MM of SG&A for 2015, 2016 y 2017, respectively
• 3. FFO calculated as Net Income + Income Taxes + D&A
• 4. AFFO calculated as Net Income + Income Taxes + D&A – FF&E
• 5. Mantains ratio of 55.8% of FF&E vs Capex reserve for 1Q17, real figure during 2Q17
• 6. Taking Ps$1.2Bn of debt and Ps$5.7Bn of fixed assets, according to last appraisal
• 7. Includes “Properties in Development”

(7) (4) (6) (2) (1) (1) (1) (1) (3)

Robust Operating and Financial Performance

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Transaction Impact on Hoteles City Express

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HCE Key Business Segments

• Property company that

consolidates the operation of 101

• wned, co-owned and leased

hotels

• Assets currently valued at 2010 or

at cost in balance sheet with significant expected capital appreciation to market value

• PropCo currently accounts for 78%
• f total revenues and 83% of total

EBITDA as of 4Q17

• HCE’s hotel OpCo currently
• perates 135 hotels
• Best distribution, operating and

digital marketing platform in LatAm with 80% of total bookings through direct channels

• Yield management systems based
• n real time market data
• Significant operating leverage in

current capacity that can support the operation of more than 200 hotels

• OpCo currently accounts for 22%
• f total revenues and 17% of total

EBITDA as of 4Q17

• Most experienced hotel

development team in LatAm with more than 25,000 rooms developed

• Strict investment discipline with

lowest cost per key in the industry

• Proven competence to develop

more than 2,000 rooms per year

• More than 35 projects under

different stages of development and additional 50 locations under analysis

• Balance sheet as of 4Q17 currently

has Ps$ 1,646 million on constructions in progress and landbank and Ps$1,191 million in cash for future expansion

OpCo (Hotel Management) OpCo (Hotel Development) PropCo A B C

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PropCo Key Operating Metrics

42 42 42 40 51 59 2017 101 +11.0% 2016 93 2015 82 FSTAY Portfolio Non FSTAY Hotels 1,640 824 816 1,941 929 2015 1,012 2016 1,159 1,214 2,373 2017 +20.3% +11.8% 2017 2016 503 522 2015 481 538 611 489 493 275 2016 218 543 2015 713 347 2017 195 292 421 +20.2% 26.8% 21.0% 24.0% 33.3% 34.3% 36.3%

2015 2016 2017 240 2015 442 202 167 2017 249 +24.1% 620 473 2016 371 306

Number of Consolidated(1) Hotels RevPAR for Consolidated Hotels Total Revenues from Hotel Operation EBITDA from Hotel Operation EBITDA Margin Hotel Operation NOI Hotel Operation

PropCo A

Ps$ Ps$ Ps$MM Ps$MM

(1) Consolidated hotels include 100% owned, co-investments and leased hotels

CAGR

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1,214 655 1,159 2,373 3,028

292 347 421 713 1,060 Non-FSTAY Stabilized 309 FSTAY Portfolio Non FSTAY Hotels at Current Performance Total PropCo 249 PropCo Stabilized 371 620 929 36.4% 21.6% 30.0% 35.0% EBITDA Margin

Total Revenues Hotel Operation 2017

Ps$MM

EBITDA Hotel Operation 2017

Ps$MM

NOI Hotel Operation 2017

Ps$MM

PropCo Metrics Assuming All Assets Stabilize at FSTAY Levels

Assuming non-FSTAY assets stabilize at same ADR & occupancy levels(1) as FSTAY assets Assuming non-FSTAY assets stabilize at same EBITDA margin as FSTAY assets Assuming a 4.5% of revenues FF&E expense after EBITDA

Notes

• 1. Stabilization implies a Ps$970 ADR and an occupancy of 62.1%

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OpCo Key Operating Metrics

135 123 106 2016 +12.9% 2015 2017 2016 2017 658 524 2015 +24.8% 422 477 519 2015 562 2016 +8.5% 2017 80 2015 121 2016 146 2017 +35.6% 18.8% 23.0% 22.2%

2015 2016 2017

Number of Chainwide Hotels RevPAR Chainwide Total Revenues Hotel Management EBITDA Hotel Management EBITDA Margin Hotel Management

OpCo B

Ps$ Ps$MM Ps$MM Ps$MM CAGR

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OpCo Metrics from Asset Stabilization and Operating Leverage Improvement

714 56 658 194 5 146 5.9 Incremental OpCo Metrics from Non-FSTAY Asset Stabilization OpCo Current Performance OpCo Stabilized 28 23

Total Revenues Hotel Management 2017

(Ps$MM)

EBITDA Hotel Management 2017

(Ps$MM)

EBITDA Margin Hotel Management 2017

(%)

Assuming non-FSTAY assets stabilize at same levels as FSTAY Assets (1)

Notes

• 1. 15% total fee base from additional revenues due to assumed stabilization of non-FSTAY hotels (at a Ps$ 970 ADR and an occupancy of 62.1%)
• 2. Assumes 80% of fixed costs and the remaining 20% variable

Assumes EBITDA growth due to operating leverage and non-FSTAY stabilization(2) Assumes EBITDA margin growth due to

• perating leverage improvement

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Hotel Pipeline C

Development Pipeline

Value to be Obtained from Current Hotels Under Construction NPV

1,646 697 949

2018 Development Pipeline

Figures in Ps$MM except for hotels and rooms

Projects Under Development Projects in Landbank Construction in Progress and Landbank

Hotels Rooms 20 23 2,500 3,220

Upside Potential from Development of Hotels @ an ROIC(1)

• f 12% - 14%

Total Hotel Pipeline

Notes

• 1. Defined as EBITDA / Total Investment

43 5,720

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Potential for Value Unlocking in HCE SOTP

FSTAY portfolio Non-FSTAY portfolio Non-FSTAY stabilized Current performance Optimized OpCo Pipeline at cost Cash HCE Valuation

OpCo Hotel Pipeline PropCo

Development incremental value

A B C

 FSTAY and non-FSTAY assets valued

at market price vs historic cost in balance sheet

 Value derived from stabilization of non-

FSTAY assets

 Valuation through market cap-rate  Industry leading LatAm

• perator

 Significant potential for

• perating leverage with

capacity to operate 200+ hotels while keeping ~80% of costs fixed

 Valuation through

EBITDA Multiple

 Best-in-class hotel pipeline  Upside from hotel stabilization  Significant cash to continue with

development plan

 Valuation through Pipeline’s NPV based

• n 12% -14% ROIC

Non-FSTAY hotels stabilized and operating leverage improvement Current & additional cash from capital raise Assuming a 12%-14% ROIC(1)

Notes

• 1. Defined as EBITDA / Total Investment

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Annex

Geographic Coverage by Country

As of December 2017 Colombia Costa Rica Mexico 2% 96% 1%

Hotel Portfolio by Ownership

As of December 2017, # of Hotels and % of total Portfolio

Hotel Portfolio by Brand

As of December 2017, # of Hotels and % of Total Portfolio

Presence in Mexico by Economic Activity

As of December 2017, % of Total Portfolio based on Number of Hotels

Owned Co-Owned Franchise and Management Leased 54 Consolidated 75% 33 14

40% 24% 10% 25%

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Diversified Asset Portfolio with High Appreciation Potential

Chile 1%

83 22 17

61% 13% 16% 8%

2 11 25% 31% 4% 4% 8% 11% 16% Energy Corridor Manufacture Services International Mining and Transformation Agroindustry and Exports Finished Goods Manufacturing

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Innovative and Disruptive Room Operation and Distribution Platform

• Innovative technological

platform receiving more than 80% of reservations through own channels.

• Optimized Yield

Management System executed in real time focused on maximizing RevPAR.

• City Premios – Loyalty

program with over 450,000 active members accountable for 20% of total

• ccupied room nights.
• More than 8,000 corporate

agreements that account for approximately 40% of total

• ccupied room nights.
• Solid commercial

agreements and partnerships that turn into sales. Room Nights Sold by Channel

2016

Room Nights Sold by Guest Type

2016

Room Nights Sold by Travel Purpose

2016

18% 52% 6% 19% 4% OTAs & GDSs Call Center Website Hotel and Walk Ins City @ccess 89% 11% Domestic Guests International Guests 13% 87% Leisure Business

Organizational Culture Aligned with Guest Cycle and Digital Experience

• Organizational culture

defined by empowering our personnel, being close to

• ur guests and exploting our

technology

• Sales processes geared

towards the guest cycle

• Decision making process

levered by big data analytics streaming from an integrated engagement system that combines data mining and customer digital experience

• Powerful technological

tools through a digital platform that allows an “online operation”

• Intensive data-mining

useful for optimal and instantaneous decision- making Guest Cycle

Thinks Plans Books Stays Shares Returns

Link Between Digital Experience and Usage of Colleted Data

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A Matrix Organization That Supports and Enhances Operations On All Fronts

• Bulletproof operation system

due to matrix structures defined by business processes

• Personnel empowerment that

allows a quick, efficient and guest-oriented decisión making

• Closeness to the guest as an

“inverted pyramid”

• Channel sales optimization

maximizing rates and encouraging profitable commercial drive Matrix Organization by Business Process Guest

Close-to-Guest Personnel Management

Groups Wholesale Business Leisure Segment / Channel Others Hotel Call Center Website City Access OTAs & GDS Branch Directors

Operations Marketing IT Digital Executive Management

Segment Leaders 31

Board of Directors Audit (100%

Independent)

Corporate Practices

(100% Independent)

Planning & Finance Procurement & Construction Compensation Nominations

Broadly Diversified Investors Base Commited and Capable Board of Directors

Board Committees

• Mainly independent Board of Directors – 12 out of 13 members

are independent

Float Management

96% 4%

Robust Corporate Governance Practices and Commitment to Sustainability

Sustainability Strategy that Generates Results

• Sustainability policy and committee

effectively implemented.

• Top environmental practices and

international certifications for hotels.

• Catalyst of positive social, economic

and environmental impacts in all our locations.

• Deeply committed with UN’s 2030

Goalds for Sustainable Development.

• Practices aligned to protect monirity interests and cero

corruption tolerance.

• Corporate Governance Manuals and Policies effectively

implemented: https://goo.gl/vFvNOV Portfolio of Certifications Strategic Pillars and Initiatives Economic Environmental Social

Entrepreneurship program, committed to growing employment opportunities Resource optimization and minimization of Carbon Footprint iniciatives Labor Inclusion and’ welfare programs for employees

Download our 2016 Sustainability Report http://cityexpress.com/ sustainability

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Tourism Sector in Expansion in Mexico

Passenger Arrivals to Airports Index Positive Trends on Tourist Arrivals

Base 2008 (2008 = 100)

Hotel Occupancy Index Adequate Absorption of Installed Capacity that Translates into Increasing Occupancy

Base 2008 (2008 = 100)

Source: Elaboration and seasonality adjustments by Banco de México with respect to data from the Tourism Ministry of the Federal Government and Airports and Auxiliary Services.

60 80 100 120 140 160 2008 2009 2010 2011 2012 2013 2014 2015 2016 North Center North Center South 60 80 100 120 140 160 2008 2009 2010 2011 2012 2013 2014 2015 2016 North Center North Center South +8.1% +8.9% 33

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

Hotel Supply – Fragmented and Dominated by Independent, Non-Standardized Hotels Hotel Demand – Driven by our Target Customers Hotel Rooms in Mexico by Number of Stars

2016

Breakdown of Independent and Chained Hotels

2016 (% of Rooms) Brasil United States Mexico Independent Chained

Occupied Room Nights by Guests’ Nationality

2016 (% of Occupied Rooms) Domestic International

Tourism Spending in Mexico (Tourism GDP)

2016 International Tourists Domestic Tourists Target Segment Mainly independent., family operated, non- standardized hotels subject to substitution 48% of Total Rooms in Mexico

199,438 158,613 136,537 75,212 199,335 5 Stars 4 Stars 3 Stars 2 Stars Others 34 82 75 66 19 25 100 100 100 13% 87% 83 38 63 17 62 37 100 100 100 1 - 4 Stars 5 Stars All Hotels

Fragmented Industry that Presents Consolidation Opportunities

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Occupancy Average Daily Rate (ADR) and Effective Daily Rate (RevPAR) Total Revenues Adjusted EBITDA and EBITDA Margin

% MXN MXN Millions MXN Millions

Sustained Growth in Operating and Financial Metrics

56.7% 54.8% 56.8% 55.1% 59.1% 62.0% 61.7% 60.2% 61.5% 62.6%

30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0%

2010 2011 2012 2013 2014 2015 2016 2017 Full Year 4th Quarter 654 668 683 722 737 766 842 934 371 366 388 398 436 475 519 562 885 927 544 580

ADR YTD REvPAR YTD ADR 4th Quarter RevPAR 4th Quarter

2,508 2,038 1,718 1,412 1,104 932

2017 2015 2014 2013 2012 21.9% 2016 +24.3%

4Q17 686 4Q16 552

25.7%

682

2016 2015

582

2014

471

2013

358

2012

280

2017

879

+42.7%

4Q17 257 4Q16 180 35

%

Margin over Total Revenues

ADR ∆% +7.2% RevPAR ∆% +5.4% ADR ∆% +13.3% RevPAR ∆% +9.0% 33.4% 30.0% 32.4% 33.3% 33.9% 32.7%

37.5% 35.0%

54.8 56.8 55.1 59.1 62.0 61.7 60.2 59.4 59.8 58.0 62.6 66.3 66.8 63.2 50 54 58 62 66 70 2011 2012 2013 2014 2015 2016 2017 Chainwide Established Hotels 668 683 722 737 766 842 934 682 691 714 720 753 834 950 600 650 700 750 800 850 900 950 1000

2011 2012 2013 2014 2015 2016 2017

Chainwide Established Hotels

(1)

36

% of Non-Established Hotels

(1)

MXN

(1)

+293 bps

(1)

+1.72%

Significant Embedded Growth in Recently Built Inventory

Number of Hotels in Operation

MXN # of Hotels in Operation at the End of Each Period

ADR

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

Occupancy

%

RevPAR

MXN 45 50 62 71 82 96 82 96 26 32 34 35 41 39 41 39 106 2014 96 2013 82 2012 71 4Q17

135 4Q16 123 2017 135 2016 123 2015 Established Hotels Non-Established Hotels 366 388 398 436 475 519 562 405 413 414 451 500 557 600 350 400 450 500 550 600 2011 2012 2013 2014 2015 2016 2017 Chainwide Established Hotels +6.7%

37% 39% 35% 33% 33% 29% 33% 29%

37 MXN 12,177.1 Millions MXN 12,177.1 Millions Financial Debt Other Liabilities Shareholders’ Equity Cash and Equivalents Landbank Productive Assets (Established and Non-Established Hotels) Recoverable Taxes Constructions in Progress Balance Sheet Structure

As of December 31, 2017

Financial Debt Maturity Schedule

As of December 31, 2017, % of Debt Outstanding

Solid Capital Structure to Support Growth

Total Debt Outstanding: MXN 2,728.5 millions Access to Diversified Financing Sources

Bank Debt by Counterparty as of December 31, 2017

Liabilities + Shareholders’ Equity 69% 8% 22% Assets 83% 7% 10% Net Fixed Assets 70% 8% 6% 1% 10% 10% 9% 16% 55% Others Sabadell IFC/DEG Bancomext Scotiabank Corpbanca 115 601 257 268 1,474 2022 & Beyond 2021 2020 2019 2018

Significant Potential for High Returns Based on Pre-Productive Assets

9,831 949 697 11,477 879 879 8.9% 7.7%

Gross Fixed Assets

(MXN Millions)

Adjusted EBITDA

LTM 4Q17

ROIC1

847 Productive Assets Construction in Progress Land Bank HCe Total 989

Average Cost per Key

(MXN Thousands)

11,608 11,608

Number of Rooms,

(Owned, Co-Owned & Leased)

• 1. ROIC calculated as EBITDA / Total Investment

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