Earnings Call: Q4 2025

Feb 20, 2026

Summary

FY2025 revenue rose 14% and EBITDA reached a record MXN 902 million, while Q4 earnings were hit by inflation and extraordinary costs. An Ixtapa resort acquisition is targeted for H2 2026, subject to approvals.

Good day, everyone, and welcome to today's Grupo Hotelero Santa Fe fourth quarter 2025 investor relations call. Please note, this call is recorded. All lines have been placed on mute to prevent any background noise. There will be a questions and answers session after the speaker's opening remarks and instructions will be given at that time. It is now my pleasure to turn the conference over to Max Zimmermann. Good afternoon, and thank you for joining us today. My name is Max Zimmermann, Investor Relations Director of HOTEL, and I would like to welcome you to the company's earning webcast for the fourth quarter of 2025. On the line, we have Francisco Zinser, our Executive Vice President, Alberto Santana, our Administration Director, and also Rodrigo Ancira from the Investor Relations team. The presentation slides we will follow during this call are available on our webcast, which you can find in the Investor Relations section of our website. Before I begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. Our projections are subject to risks and uncertainties, and actual results may differ materially based on a number of factors. Please refer to the detailed notes in the company's press release regarding forward-looking statements. Also, at the end of the presentation, we will open the call to any questions you may have. 2025 began with a strong momentum that decreased as the year went by. However, we closed the year with healthy growth both in sales and EBITDA. Regarding operating indicators for total hotels, in 2025, we increased our RevPAR by 5%, driven by a 4.6% increase in ADR, combined with a 0.3 percentage point expansion in occupancy compared to 2024. Revenues totaled MXN 3,395 million for 2025, up 14% compared to 2024. EBITDA was MXN 902 million for the year, increasing 11% compared to 2024. I would also like to mention that at the end of January 2026, we announced the conclusion of the negotiations for the acquisition of a resort hotel located in Ixtapa Zihuatanejo. Capacity is expected to reach 70 rooms. The closing of this acquisition is subject to the fulfillment of certain conditions and obtaining of respective corporate and governmental authorizations, as is customary in these types of transactions. The addition of this new property to the HOTEL's portfolio is another step in the pursuit of profitable growth by continuing to increase value for our shareholders. Now, I will get into our quarterly operational results. Please go to slide 2. Room revenue increased 3% to MXN 426 million in the fourth quarter of 2025 compared to last year, driven by a higher RevPAR. Food and beverage revenue increased 1% to MXN 363 million in the quarter compared to the same quarter of last year. Another income, which includes among other items, event room rentals, parking, laundry, telephone, and leasing of commercial spaces, decreased 2% to MXN 49 million in the fourth quarter of the year compared to last year. Vacation club income decreased 14% to MXN 17 million, and third-party hotel management fees were up 3% to MXN 26 million for the quarter compared to the fourth quarter of 2024. Please move to slide 3. In terms of our operational metrics on a consolidated level this quarter, we posted a 2.1 percentage point increase of occupancy to 70% as a complete portfolio, which compensated for an ADR decrease of 1% to MXN 1,973. RevPAR in the quarter was MXN 1,379, which was 2% higher than the fourth quarter of 2024. EBITDA in the quarter decreased 13% to MXN 233 million compared to MXN 266 million in the fourth quarter of last year, reflecting higher operating costs driven by inflation. Moving on. In the quarter, we posted an operating loss of MXN 147 million compared to a gain of MXN 198 million in the fourth quarter of 2024, reflecting higher non-recurring expenses, of which the majority are various. In the fourth quarter of 2025, HOTEL reported a net loss of MXN 122 million compared to a net income of MXN 17 million in the quarter, mainly due to the extraordinary non-recurring expenses that I previously mentioned. Please move to slide 5. Total debt was MXN 2,398 million at the end of the fourth quarter of the year. Slide 5, please. Which represented a total debt to EBITDA last 12 months ratio of 1.8 times, being one of the lowest ratios we've had in the last years. Total debt is 100% denominated in dollars and has an average cost of 7.1%. Additionally, I would like to mention that over 87% of debt maturities are long-term. On the other hand, our short US dollar position by the end of the quarter was $111 million, equal to MXN 2,398 million. Please move to slide 6 and I will pass the call also to the Q&A section. But I would also lastly like to highlight and express my gratitude to the more than 4,600 associates who have supported the company unconditionally. As always, we are especially thankful for the trust and support of our shareholders, and again, to all of our tremendously professional and cooperative teams. With that, I would like to open the call for questions and answers. Operator? Thank you. At this time, we will open the floor for your questions. Ladies and gentlemen, if you have a question, please use the raise hand function on your Zoom tool. Please make sure that the microphone is turned on. Our first question come from Carlos Alcazar from Apalache Research. Please, sir, go ahead. Hello. Good morning. Thank you for taking my questions. I have four questions, and I will ask them one by one, if that is okay with you. First, regarding the Ixtapa Zihuatanejo acquisition, do you expect the transaction to close in the first half of the year? And how much annual revenue do you expect the property to generate? Hi. Thank you, Carlos, for your questions and for being in our call. In terms of your question, the transaction currently has to go through CNA, which is the new organism, which used to be COFECE. We still do not have the times very clear, as this is a new agency. However, we estimate that this could take between three and six months. We still do not know exactly when it will close, but we do believe that it will be in the second half of the year. However, the specific month, we still do not know. Hopefully, it will be the third quarter, but it could also be the fourth. Yeah, thank you. In terms of the revenues, we still are not able to share these numbers because we still have not closed the transaction. But once we have, we can give you more information about the specifics of the assets. Okay. Regarding the tourists from United States of America, what have you observed in American travelers in recent months? Hello, Carlos. How are you? This is Francisco Zinser. Thank you for your question and for participating in the call, and likewise to all of you who are in our webcast. Well, the U.S. tourism has suffered, as you all can see in the airport reports. There is a decrease in volume, which we think is mainly due to, obviously, the geopolitical and economic situation in the world, which doesn't help. Tourism is very much influenced by certainty, and I think that certainty is something that is quite scarce, and it's not something that defines the moment we're living. I think that on one side hurts tourism traffic, and on the other side, I also think that the position with immigrants in the U.S. and the delicate situation that they might be facing does not help for them to leave the country, and of course, it is natural that they can have some fears when they come back, what is going to happen? There is a decrease. I would say it is not dramatic, but it is a decrease that is definitely being felt. Thank you, Francisco. I am doing very well. I hope you are too. You end this 2025 with a record revenue and EBITDA. Do you expect this trend to continue in 2026? I think that we have a very solid base in the company. We have been working for many years in optimizing results in our group. We have a very good control on the cost side. Unfortunately, we are facing what we could call a perfect storm in a way, because we are seeing a reduction in the pesos we get for each dollar due to the revaluation of the peso, and we are seeing high inflation impact in the local and Mexican market. That is a squeeze, and that is something that definitely puts pressure on the margins. But we think we have a very good model. We are very quick adapting to different situations, and that can be clearly seen in this year's record EBITDA that we are reporting. It is the highest EBITDA ever in the company's history, and although we cannot give future-looking outlooks, we can feel confident that we will continue the same trend. Thank you, Pancho. I would just add to that we also have some hotels, such as the Hyatt Regency, which is still finishing their maturation stage, which could also help our results a little. Okay. Finally, regarding the Soccer World Cup, how do you expect occupancy to perform during this period? I think that there will definitely be, obviously, a lot of traffic and a lot of tourism, but I think it's being overreacted, overblown, the impact. It's not a month. It's not the Olympics that take a month to develop. This is going to be a very short-term impact, which is going to be great, I'm sure, but it's clearly not something that, at least we believe, is going to help in the shoulder dates of the soccer matches themselves. Obviously, on the soccer match days, we are, and the market is, fully booked at very good rates, but I do not see this, as I say, for days off matches. That would be our view on the soccer ball championship. Thank you very much, and congratulations on the results. Thank you very much. Our next question comes from Martin Lara from Miranda Research. Please go ahead. Hi, guys. Thank you for the call. I have some questions. The first one is, your occupancy levels increased in the fourth quarter against last year. But in the third quarter, they were declining also against the previous year. Could you please explain this improvement? The second question is, how are you going to finance the acquisition of the new hotel in Ixtapa, and how do you see your leverage by the end of 2026? Sure. Thank you for your question, Martin, and it's great to hear from you. In terms of our occupancy levels, remember that hotel occupancies and KPIs are very, very seasonal. You can't normally compare sequential quarters because the market dynamics in these months are very, very different. Having said that, I would tell you that if you look at 2024, so the year before the results we are talking about, occupancy and in general results were sluggish in the first quarters. However, towards the end of the year, third and fourth quarter, they were doing pretty well, meaning that we still rode this growth trend through the first and second quarters of this year. However, the comparables in the third and fourth quarter compared to when this growth started in 2024 were complicated, were high comps, let's say. I would say that even I think looking at occupancy per quarter can sometimes be misleading, and I prefer to look at it in the year. I think in the year we grew occupancy a little bit, and more on the ADR side. We expect this to continue to be marginally being able to grow occupancy. Remember that occupancy is also for a hotel chain above 70%, 75% can be complicated, taking into account that we have 50%, well, a little bit more than 50% of our hotels on resorts, and the rest are cities. That is also something to consider in terms of your question. Also in terms of your second question, in terms of how we plan on financing the acquisition. As you probably saw in our quarterly report, we have a pretty good cash. Position. Cash position at the end of the year, which is something good. We continue to sell the apartments in 724, which last year also we saw some growth that was maybe lacking a little bit in 2024. We also have some growth and some revenues from that side. With the costs of the financing costs also lowering little by little as rates also come down, that also will help us in terms of our cash position. Normally, as you know, we tend to finance hotels roughly 50/50 equity and debt. We are already looking into having debt at this hotel level, and the rest with equity. Since this is an acquisition that is smaller compared to the last ones that we have made, that's something that shouldn't be a problem for us. Okay, and the leverage? Excuse me? Are you going to reduce it? The leverage. Are you going to reduce it in 2026? Yes. The leverage, as I mentioned, at 1.8 is at a pretty low level. We have been analyzing having more debt going forward. We have various hotels which are debt-free. We don't know when we're going to do this or if, but we have been looking at it and having some expectations of are rates still going to be coming down more? But looking at our cash position, we're also in no rush to do this. I would add that obviously, debt is good as long as it's under a reasonable amount. I think that this, as Max Zimmermann mentioned, is a very, very good index of EBITDA versus debt. But we need to see how things evolve in order to decide if this is where we want to stay or we want to bring it up a bit or bring it down a bit. Okay. Thank you very much. We've no further questions in the queue. I would like to turn the call to the management for the close of this conference. Okay. We would like to thank all of you once again for all the trust that you have placed in us, and we affirm our commitment to maximize your investment. Of course, we would like to ask or thank, I should say, all of our associates for their constant effort, hard work. Without them, this would be absolutely impossible. I wish all of you a great day and a great weekend. Thank you for participating. Thank you. You may disconnect.