Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Grupo Hotelero Santa Fe SAB de CV achieved a 66.6% occupancy rate in the first nine months of 2024, marking the highest first nine months occupancy in the past seven years.
- The company posted a 25.7% EBITDA margin despite challenges, such as the remodeling of Krystal Beach Acapulco due to Hurricane Otis.
- RevPAR increased by 8.1% in the third quarter of 2024, driven by a 6.9% increase in ADR and a 0.7 percentage point growth in occupancy.
- Room revenue increased by 3% to MXN326 million in the third quarter of 2024 compared to the same period in 2023.
- Operating income increased by 26% to MXN72 million in the third quarter of 2024 compared to the third quarter of 2023.
Negative Points
- EBITDA decreased by 7.7% to MXN144 million in the third quarter of 2024 compared to the same period last year.
- Net income showed a loss of MXN86 million in the third quarter of 2024, compared to a MXN55 million loss in the third quarter of 2023, driven by higher foreign exchange currency rate losses.
- Vacation Club income decreased by 13% in the third quarter of 2024.
- The company faces cost pressures, particularly with wages and energy costs, impacting overall expenses.
- The Acapulco Hotel is still undergoing remodeling, with some rooms not yet operational, affecting potential revenue generation.
Q & A Highlights
Q: Could you please give us an update on the Acapulco Hotel and your plans regarding the short-term debt of MXN445 million?
A: We plan to have the Acapulco Hotel fully operational by the end of November, currently operating with around 250 rooms and aiming for 300 by month-end. Regarding the short-term debt, we have a new working capital line with a bank for Acapulco, which will be converted to long-term debt once financing is secured. We also expect the final insurance payments soon. Most of our debt is secured by hotel properties, and we feel comfortable with our current debt levels.
Q: How much do you expect to invest in CapEx next year, and what are your occupancy expectations for beach hotels?
A: We typically invest around 4% of revenue in CapEx. This year, it might be slightly below, but we plan to catch up in the last quarter. For beach hotels, while we don't provide specific guidance, we expect occupancy to stabilize and grow, especially with the peso's devaluation making Mexico more attractive to international tourists.
Q: How are you managing cost pressures, particularly with wages?
A: Cost pressures, especially wages and energy costs, have been significant. We've implemented cost-cutting measures and optimized staffing, maintaining a low employee-to-room ratio. Despite these efforts, costs have risen, impacting our margins. We continue to adapt and find efficiencies.
Q: Do you think you could raise additional mortgage financing if needed?
A: Yes, we have four hotels without current debt that could be used for additional financing if necessary. However, we feel comfortable with our current financial position and debt levels.
Q: What are your thoughts on the impact of the peso's devaluation on your business?
A: The devaluation makes Mexico more affordable for international tourists, potentially boosting occupancy. It also benefits our financials as we receive more pesos for dollar-denominated tariffs. We expect this to positively impact our numbers next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
