Hoteles City Express Announces 1Q18 Results with Revenue Growth of 20.1% and Adjusted EBITDA Growth of 22.9%

Hoteles City Express S.A.B. de C.V. (BMV: HCITY), released its results for the first quarter of 2018 (“1Q18”).  The numbers have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and are presented in Mexican pesos (“$”).

Summary of Relevant Operating and Financial Information (1Q18)

  • At the Chain level, the Average Daily Rate (“ADR”) and the Revenue per Available Room (“RevPar”) increased 2.1% and 7.0% over 1Q17, to $977 and $569, respectively. Chain occupancy in 1Q18 was 58.3%, which is 268 basis points higher than occupancy in 1Q17.
  • Total Revenues were $686.1 million, which is a 20.1% increase over the same quarter in 2017, due mainly to an 11.1% increase in the number of Installed Room Nights at the Chain level, in combination with growth of 7.0% in the RevPar.
  • Operating Income was $142.5 million in 1Q18, which is a 29.7% increase over the same quarter of the prior year.
  • EBITDA and Adjusted EBITDA were $236.9 million and $241.0 million, respectively, which in turn resulted in increases of 22.2% and 22.9% over the same period in the previous year. EBITDA and Adjusted EBIDTA margins during the period were 34.5% and 35.1%, respectively.
  • Net Income for the period increased to $50.3 million. Net Income margin was 7.3% in the quarter.
  • At quarter end, the Chain was operating 137 hotels, an increase of 13 new units over the 124 hotels that were operating at the close of the same period in 2017. The number of rooms in operation in 1Q18 was 15,461, an increase of 11.8% over the 13,829 rooms operating at the close of 1Q17.

Income Statement Highlights



1Q18 vs 1Q17

(Thousands of Pesos)

% Change

Rooms in Operation




Revenues from Hotel Operation




Revenues from Hotel Management




Total Revenues




Operating Income




Operating Income Margin



153 bps

Adjusted EBITDA




Adjusted EBITDA Margin



80 bps








61 bps

Net Income




Net Margin



60 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 a more stable macroeconomic environment than 12 months ago, Hoteles City Express reported solid results that reflect the strength of its business model.

Historically low levels of unemployment, total payroll that is growing consistently, and an improving consumption dynamic, all point to high demand for top-quality rooms throughout the country. Hoteles City Express has an inventory of more than 15,400 rooms in 30 states and 68 cities in Mexico and three other countries throughout Latin America.

Our commercial efforts continue not only to be at the forefront of the industry, but also a key element for maximizing our profitability. With occupancy 2.7 percentage points higher than in 1Q17 and positive ADR growth, our RevPar increased 7.0%.

Our Total Revenues grew by more than 20%, while the Company’s productivity was reflected in Operating Income, which grew 1.5 times more quickly than revenues. The Company’s Adjusted EBITDA Margin increased by almost 100 bps to 35.1%, which is the highest level of this metric in our history for a first quarter.

Today more than ever, our innovative platform for operation, distribution and digital marketing continues to drive the Company’s profitability. With infrastructure that will allow us to operate more than 200 hotels with minimal cost increases, we are positioned to continue pushing the Company’s ambitious growth.

Our 2018 development plan is advancing as expected. Given our disciplined approach to cost control and our experience in developing hotels we are confident that we will open more than 20 new units over the next 12 months. 

Finally, we are very pleased to tell you that the Company is in the final stages of launching FIBRA STAY. With market interest, unanimous approval at our Shareholders Meeting on February 15, and the conclusion of the initial public offering process getting ever closer, we expect to see FSTAY start trading in the coming weeks.

We will continue to work tirelessly to be the best alternative for profitable growth in Mexico and the rest of Latin America.”

About Hoteles City Express:
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 137 hotels located in Mexico, Costa Rica, Chile and Colombia, 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 short- and medium-term.

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 (Alejandro Lavín), GBM (Héctor Vázquez), ITAU BBA (Enrico Trotta), J.P. Morgan (Adrián Huerta), Morgan Stanley (Nikolaj Lippman), Santander (Cecilia Jiménez), Signum Research (Armando Rodriguez) and UBS (Marimar Torreblanca).