Hoteles City Express Announces First Quarter 2019 Results

Total Revenues were $717.0 million, a 4.5% increase over the same quarter in 2018, due mainly to an increase in the number of Installed Room Nights at the Chain level.

Hoteles City Express S.A.B. de C.V. (BMV: HCITY), released its results for the first quarter of 2019 (“1Q19”).  All figures have been prepared in accordance with International Financial Reporting Standards and are presented in Mexican pesos (“$”), unless otherwise noted.

Summary of Relevant Operating and Financial Information (1Q19)

  • At the Chain level, the Average Daily Rate (“ADR”) increased 3.8% and Revenue per Available Room (“RevPar”) decreased 4.9% versus 1Q18, to $1,014 and $541, respectively. The Chain’s occupancy in 1Q19 was 53.4%.
  • Total Revenues were $717.0 million, a 4.5% increase over the same quarter in 2018, due mainly to an increase in the number of Installed Room Nights at the Chain level.
  • Operating Income was $108.2 million in 1Q19, a 24.1% decrease compared to the same quarter of the prior year.
  • EBITDA and Adjusted EBITDA were $216.1 million and $219.5 million, respectively. EBITDA and Adjusted EBIDTA margins during the period were 30.1% and 30.6%, respectively.
  • Net Income for the period was $0.4 million.
  • At quarter end, the Chain operated 150 hotels, an increase of 13 new units versus the 137 hotels that were opened at the close of the same period in 2018. The number of rooms in operation in 1Q19 reached 17,002, an increase of 10.0% over the 15,461 rooms operating at the close of 1Q18.

Operating and Financial Highlights



1Q19 vs 1Q18

% Change

Operating Statistics for the Chain

Number of Hotels at the End of the Period




Number of Rooms at the End of the Period




Number of Installed Room Nights




Number of Occupied Room Nights




Average Occupancy Rate (%)



-491 bps









Consolidated Financial Information (Thousands of Pesos)

Total Revenues




Operating Income




Operating Income Margin



-568 bps

Adjusted EBITDA




Adjusted EBITDA Margin (%)



-451 bps





EBITDA Margin (%)



-438 bps

Net Income




Net Income Margin (%)



-728 bps

Adjusted EBITDA = Operating income + depreciation + amortization + non-recurring expenses (pre-opening expenses for new hotels).

Comments from Mr. Luis Barrios, CEO of Hoteles City Express:

“In an environment in which we observed a delay in the beginning of the business cycle in Mexico, we present our results for the first quarter of 2019, which are the product of a solid operation linked to the economic and geopolitical volatility and uncertainty of the country.

During the quarter, we experienced two different moments that, on average, reflected a sub-optimal performance in the quarter but with positive trends on  the last weeks of it.

On one side, in January and the first fifteen days of February, our portfolio was negatively impacted by events such as the fuel shortage, the deferment in government travel, the number of layoffs at the end of 2018 and the pause in local investments, which are the main sources of business in the markets where we are present. On the other side, in the last 45 days of the quarter we observed recovery dynamics to the point that during the last days of March our portfolio had double digit growth in RevPAR, a trend that continues to date.

Regionally, our portfolio is favored by its geographical diversification. The good performance of the North region of the country stands out, with attractive market dynamics in markets such as Tijuana, Mexicali, Monterrey and Tampico. Likewise, places like Mexico City and Guadalajara demonstrate the strength of our product to penetrate urban markets and obtain above-average returns, mainly through the City Express Plus brand. As a counterbalance, the Bajío region presents operational weakness, which we consider is primarily due to short-term temporary effects such as the aforementioned fight against fuel theft and certain isolated events of insecurity.

That being said, Total Income registered a growth of 5%, while we reached an Adjusted EBITDA of approximately $ 220 million. With the beginning of operation of more than 1,500 rooms in the last 12 months, we consider that our inventory – mainly composed by recently opened hotels – is capable of absorbing incremental demand more than in a proportional way to the slowdown experienced at the start of 2019. Based on this, we continue focused on the fulfillment of our budget for effective rate growth announced in February 2019.

With respect to our expansion plans, we continue to progress steadily but cautiously to our 2019 Development Plan targets. To date we have reached 151 hotels by opening 3 hotels out of the 17 projects we announced in February and staying in line with the development program. We expect the opening of 14 more hotels in the coming months. Considering a risk-return discrimination criteria, our objective of openings in 2019 remains firm due to the strength of the markets in which we plan these openings. Despite this, we remain cautious about the economic development in the coming months and we have an action plan in case of requiring cash preservation mechanisms.

For more than 16 years, Hoteles City Express has profitably sailed several episodes of economic and political stress in Mexico. From the deep economic and the hospitality industry slowdown in 2008-2009 to the period of volatility derived from the renegotiation of the North American Free Trade Agreement in 2015, to mention a few, our company has experienced uncertain economic and geopolitical situations and has been able to capitalize on them.

We consider that although we are in a challenging but highly different reality from that of those moments, the strength of our team, our operational flexibility and the power of our product to penetrate new and current markets will be key elements to achieve our goals throughout the year. Goals that we are keeping intact. Thank you for your trust.”

Hoteles City Express is the leading and fastest-growing, limited-service hotel chain in Mexico in terms of number of hotels, number of rooms, geographic presence, market share and revenues. Created in 2002, Hoteles City Express specializes in offering high-quality, comfortable and safe lodging at affordable prices via a limited-service hotel chain geared mainly towards domestic business travelers. With 151 hotels located in Mexico, Costa Rica, Colombia and Chile, Hoteles City Express operates five distinct brands: City Express, City Express Plus, City Express Suites, City Express Junior and City Centro, to serve different segments of its target market. In June 2013, Hoteles City Express completed its IPO and began trading on the Mexican Stock Exchange under the ticker symbol “HCITY,” and in October 2014, Hoteles City Express completed a follow-on share issuance with the aim of accelerating its growth in new hotels in the coming years.

HCITY has formal coverage, notes and analytical assessment by the following financial institutions and analysts: Actinver (Pablo Duarte), Bank of America Merrill Lynch (Carlos Peyrelongue), Citigroup (Dan McGoey), GBM (Eugenio Saldaña), ITAU BBA (Enrico Trotta), J.P. Morgan (Adrián Huerta), Morgan Stanley (Nikolaj Lippman), Santander (Cecilia Jiménez), Signum Research (Armando Rodriguez) and UBS (Marimar Torreblanca).

SOURCE Hoteles City Express S.A.B. de C.V.