Annual Report 2019

Annual Report 2019 Live Aqua Urban Resort San Miguel de Allende 2O19 Highlights 2.8 Million hotel room nights 62.8% Portfolio’s occupancy rate excluding FACC 86 Operating hotels 636 Million distributed to CBFI Holders Fiesta Americana Hacienda Galindo Hacienda Americana Fiesta 4,579 Million in debt as of December 31st, 2019 2,5OO Million issued in the inaugural bond FIHO19 +76bps Increase in lodging contribution margin +26O Rooms for the Fiesta Americana Viaducto Aeropuerto Mexico City opening 2 Page 4 Letter from the CEO 6 Introduction to FibraHotel 6 Company Overview 8 FibraHotel´s History 10 FibraHotel´s Structure 12 Senior Management Team 14 Industry overview 14 The Mexican Lodging Industry and Market Opportunity 19 Relevant market opportunities for FibraHotel 20 FibraHotel´s Strategy 20 Our Competitive Strengths 24 Strategy 26 Acquisitions and Developments 28 FibraHotel´s Portfolio 29 Presentation of the Portfolio Annual Report 2019 32 Portfolio Map 33 Brand Affiliations 35 Hotel Segments of the FibraHotel´s portfolio Sheraton Ambassador Monterrey Ambassador Sheraton 3 Hotel Sheraton Ambassador Monterrey Ambassador Sheraton Fibra 36 KPIs of the FibraHotel´s portfolio 38 Financial section 38 2019 Financial Results 44 Cash flow and liquidity 47 Capital Expenditures 47 Cash distribution 47 Buybacks 48 Sustaintability 48 Vision 49 Corporate Governance 49 Technical Committee and FibraHotel Committees 52 FibraHotel on the Mexican Stock Exchange 52 CBFI price 52 Stock ownership 53 Post-2019 events 54 Consolidated Financial Statements NOTE: The publication date of this Annual Report is July 14th, 2020. 4 July 2020 Dear FibraHotel certificate holders: n 2019, FibraHotel continued to execute its long-term strategy. Highlights of the I year included opening the Fiesta Amer- icana Viaducto Mexico City Airport hotel, issuing a MXN $2,500 million long-term bond and publishing our first sustainabil- ity report. Letter from the CEO from Letter I will first talk about our ESG report, as FibraHotel is, and will be, firmly committed to sus- tainability, including social and environmental criteria. Our activities are built on solid corporate governance characterized by an understanding of the company as a creator of value for all stakeholders with an emphasis on transparency regarding our ini- tiatives and results. We are making progress on the Annual Report 2019 design of our strategy and committed to move for- ward on these topics. From an operating perspective, in 2019 we faced a complicated environment of slow economic growth and less tourism. For the full year of 2019, we had rev- enues of MXN $4,372 million, EBITDA of MXN $1,156 million, AFFO of MXN $638 million and a distribution of MXN $0.81 per certificate. Even under these market conditions, we continued to gain market share with a 2.1% RevPAR growth of our portfolio versus a 5.1% RevPAR decrease for hotels in Mexico in 2019, according to STR. As for our portfolio, in November 2019 we finished the development cycle by opening the Fiesta Ameri- cana Viaducto Aeropuerto Hotel in Mexico City inside the Via 515 mixed-use project. The hotel has 260 full- service rooms in an EDGE certified building and was designed with the latest technology including full au- tomation in rooms, public areas, back of the house 5 Fiesta Americana Monterrey Americana Fiesta and maintenance equipment. During 2019, the Live Aqua San Miguel de Allende Ho- tel continued its ramp-up process and received the UNESCO Prix Versailles 2019 award for hotels in North America with extraordinary architecture and design and received Four-Star recognition by Forbes Travel Guide after only one year in operation. Another highlight of 2019 was the placement of the long-term FIHO-19 bond for MXN $2,500 million at a fixed rate of 8.83% to refinance existing liabilities. The issuance marked our inaugural placement in the public debt market and improved the average life of our debt from 5 years to 8 years. We finished the year with a 26% LTV, [95%] of our debt in pesos, and in a solid balance sheet position. In 2020 to date, FibraHotel has been impacted by the COVID-19 pandemic. Our thoughts are with all the people affected by the coronavirus. In response Hotel to the crisis, we took fast and decisive measures, including the difficult decision to close the vast ma- Fibra jority of our hotels during April and May. We also took measures to conserve liquidity by reducing all non- essential expenditures, eliminating distribution and deferring payment of the advisory fee. Even though these are unique circumstances, FibraHotel was in- tentionally structured to weather challenging times and we remain confident in the strength of our hotel portfolio and experience of our team to manage the business successfully across market cycles. I would like to thank all our associates, certificate holders, and partners for their commitment to Fibra- Hotel. In these unprecedented times, I firmly believe that our team has the ability to manage through the crisis and achieve the best possible results at medi- um and long-term. Simón Galante CEO FibraHotel 6 Grand Fiesta Americana Monterrey Valle Monterrey Americana Fiesta Grand Company Overview e are a Mexican trust that owns, acquires and develops hotels Win Mexico. We are the largest hotel owner in Mexi- co, with a portfolio that includes 86 hotel properties diversified by geography, hotel segment, brand, size, hotel operator and Introduction to FibraHotel Introduction traveler type. We are the first publicly-traded FIBRA (real es- tate investment trust, or REIT) focused on the lodging industry Annual Report 2019 in Latin America. FibraHotel´s portfolio offers lodging services across the country to business and leisure travelers. Most of its hotels are located in strategic sites with significant business, industrial and touristic activities and are located inside or near mixed-use projects such as regional shopping centers, business centers, industrial parks, airports and bus terminals, among others; thus, offering our guests access to a large variety of amenities and services. Our objective is to generate at- tractive risk-adjusted returns for Holders of our CBFIs pri- marily through distributions, as determined by our technical committee, and through capital appreciation. We intend to continue achieving this objective through the ownership, 7 Hotel Grand Fiesta Americana Monterrey Valle Monterrey Americana Fiesta Grand Fibra expansion and asset management of a high-quality, The number of rooms in our hotels has increased diversified portfolio of hotels. from 2,467 to 12,560, multiplying the Initial Portfo- lio by 5.1x. We stand out for being the sole owner of hotels, not operators, which allows us to have an open architec- This significant growth is the product of our ability ture in order to work with the operator or hotel brand to identify value creation opportunities in the entire that best suits the needs of each of our properties. range of accommodation assets in Mexico, as well as to structure investments and expand through the Since our initial offering in November 2012, we have acquisition and development of new hotels. Addi- grown our initial portfolio of 22 hotel properties, tionally, our access to the public capital market, our operated by 2 hotel operators under 4 brands, and established asset management platform and open total assets of approximately MXN $5,000 million to architecture strategy, has facilitated this important a portfolio including 86 hotel properties diversified growth. The hotels are located in 26 Mexican states under 13 brands, 3 hotel operators and total assets of the Republic and are related to prestigious hotel of MXN $17,746 million as of December 31st, 2019. brands, which provides competitive advantages and increases demand due to: As of December 31st, 2019, the FibraHotel portfolio had: i) quality of service, ii) loyalty programs, iii) modern reservation systems, 86 hotels in iv) national and international distribution channels and operation v) increasing demand of travelers in and to Mexico. 8 FibraHotel´s History The FibraHotel trust was constituted on July 31st of 2012 and conducted its Initial Public Offering (IPO) on November 30th, 2012. FibraHotel has increased its hotel portfolio and number of rooms from the time of its IPO as follows: Number of rooms at the end of the period 2012 2013 2014 2015 2016 2017 2018 T1 2019 T2 2019 T3 2019 T4 2019 Rooms in Operation 2,467 5,547 7,656 8,507 10,422 11,273 12,300 12,300 12,300 12,300 12,560 Rooms under development 489 899 1,883 2,197 1,346 688 255 255 255 255 0 Total Rooms 2,956 6,446 9,539 10,704 11,768 11,961 12,555 12,555 12,555 12,555 12,560 Number of hotels at the end of the period 2012 2013 2014 2015 2016 2017 2018 T1 2019 T2 2019 T3 2019 T4 2019 Hotels in Operation 18 39 56 62 75 81 85 85 85 85 86 Hotels under development 4 8 14 18 10 5 1 1 1 1 0 Total Hotels 22 47 70 80 85 86 86 86 86 86 86 During 2014, FibraHotel in- On November 30th, 2012, 2014 2012 creased the number of rooms in its portfolio due to the: FibraHotel successfully carried out its initial Public > Acquisition of 13 hotels (1,831 rooms) in operation Offering consisting of a public offer in Mexico, as well as an > Opening of 4 hotels (274 rooms) from the development international private offer from CBFIs obtaining resources portfolio for MXN $4,137 million. > Acquisition of 10 hotel projects under development (1,201 rooms) Annual Report 2019 At the end of 2012, the FibraHotel portfolio was composed as > Room inventory decrease at certain hotels, a hotel closed follows: and in a repositioning process (142 rooms), and the > 18 hotels (2,467 rooms in operation) cancelation of the long-stay hotel in Cancun (74 rooms) > 4 hotels (489 rooms) in different stages of development At the end of 2014, the FibraHotel´s portfolio was composed as follows: > 56 hotels (7,656 rooms) in operation > 13 hotels (1,741 rooms) in different stages of development > 1 hotel (142 rooms) in repositioning process 2013 On May 30th, 2013, FibraHotel completed its first follow-on consisting of a public offer in Mexico, as well as an international private offering through a CBFI issuance that raised MXN $4,878 million.

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