Hotel FIBRAs Exceed National Average Occupancy Rates

FIBRA Inn and FibraHotel reported occupancy rates slightly higher than the national average of 60.3%. Both FIBRAs said they will work on improving operative and managerial efficiency to continue delivering strong results. While the average performance of the hotel sector was positive, both FIBRA Inn and FibraHotel reported occupancy rates of 64.7% and 62.1% respectively. Despite challenges and a slow recovery in the tourism industry, both companies yielded positive results in 2Q24. 

According to Miguel Torruco, Minister of Tourism, from January to May 2024, Mexico welcomed over 34.3 million tourists who stayed in hotels. Of these, 24.5 million were domestic tourists and 9.8 million were international visitors. Torruco added that the national average occupancy rate stood at 60.3%. He noted that urban areas averaged 52.6% occupancy, while beach destinations averaged 68.9%. 

FIBRA Inn

FIBRA Inn, which owns 35 hotels with 6,048 rooms and is investing in a development project that will add 218 more rooms, reported an occupancy rate of 64.7% during 2Q24, up from 62.8% in 2Q23, with an average daily rate (ADR) of MX$1,813 (US$95.3), a 9.6% increase from 2023.

Revenue per available room (RevPAR) reached MX$1,173, marking a 12.9% increase. Total revenues were MX$613.2 million, an 11.7% rise year-on-year. The company reported a Net Operating Income (NOI) of MX$197.6 million, up 12.1%, and an Adjusted EBITDA of MX$165.7 million, an 18.4% increase. The Funds from Operations (FFO) were MX$116.3 million, reflecting a 114.4% improvement. "We have established ourselves as a resilient FIBRA that has made the right decisions during challenging times. Now, in 2024, we present stable results based on operational and administrative efficiency,” noted Miguel Aliaga, CEO, FIBRA Inn. 

FibraHotel 

As for FibraHotel, whose portfolio comprises 85 hotels with 12,360 rooms, the ADR was MX$1,552, with an occupancy rate of 62.1% and a RevPAR of MX$964 during 2Q24, representing a 6.0% increase from 2Q23. FibraHotel's Fiesta Americana Condesa Cancún achieved an ADR of MX$5,797 and a RevPAR of MX$4,220 with an occupancy of 72.8%. 

Total revenues for the second quarter of 2024 amounted to MX$1,364 million, marking a 6% increase compared to the same period in 2023. The lodging contribution reached MX$451 million, with EBITDA at MX$331 million and FFO totaling MX$260 million. 

During 2Q24, FibraHotel incurred non-operating expenses of MX$8.7 million and non-operating income of MX$67 million, which includes MX$36 million from the sale of the Gamma Guadalajara hotel and MX$32 million from an insurance payment related to Hurricane Otis affecting the One Acapulco hotel in October 2023. The adjusted operating profit was MX$261 million. "In 2Q24, we encountered challenging market conditions due to subdued economic activity and investments, resulting in slower hotel demand. Additionally, we continued to experience pressures on operating costs, particularly in labor," stated Simón Galante, CEO of FibraHotel.

While both FIBRAs reported notable recoveries, the sector is moving slowly. However, real estate investors remain optimistic in the development of this segment. CBRE’s global survey on hotel investment intentions for 2024 reveals a vibrant and optimistic outlook for the sector across Mexico, Central America, and the Caribbean, with more than 50% of investors planning to boost their investments. Investors are particularly drawn to luxury hotels, particularly in top markets such as Los Cabos, Punta Cana, and the Tulum-Cancun Corridor, with approximately 64% finding these types of projects the most appealing, and over 90% viewing resorts as the most lucrative investment opportunities for 2024.