Concentradora Fibra Hotelera Mexicana SA de CV

BMV:FIHO12

Earnings Call Transcript 2018-Q3

[Operator]

Good morning. My name is Omar, and I will be the conference operator today. At this time, I would like to welcome everyone to FibraHotel's 2018 Third Quarter Earnings Conference Call. FibraHotel issued its quarterly report on Monday. If you did not receive a copy via e-mail, you can find it on the www.fibrahotel.com website or e-mail, [e-mail].

Before we begin the call today, I would like to remind you that forward-looking statements made during today's conference call do not account for future economic circumstances, industry conditions, company performance and financial results. These statements are subject to a number of risks and uncertainties. All figures included herein were prepared in accordance with International Financial Reporting Standards and are stated in nominal Mexican pesos, unless otherwise noted. Joining us from FibraHotel are Mr. Simón Galante, CEO; Mr. Eduardo Lopez, General Manager; Mr. Edouard Boudrant, CFO; and Mr. Guillermo Bravo, CIO. Before I turn the call over to management, I would like to remind you about FibraHotel's 2018 Investor and Analyst Day on November 9. To register, please visit www.fibrahotel.com/investorday/.

With that, I'll turn the call over to Mr. Simón Galante. Sir, please begin.

[Simón Zaga, executive]

Thank you, operator, and good morning, everyone. I am going to begin today's call by providing an overview of the third quarter of 2018 results as well as our current situation. And then, we'll turn over the call to Edouard Boudrant, our CFO, who will discuss our financial results in more detail, and we will open the call for questions and answers.

During the third quarter of 2018, FibraHotel's operating results underperformed our expectations for the portfolio. RevPAR for the stabilized portfolio reached 4.1% year-on-year from a 6.4% increase in ADR and that 149 basis points decrease in occupancy. These numbers come from a low-comparable basis last year, which has the export impact in September. The total portfolio RevPAR increased 6.83% year-on-year as our non-stabilized portfolio continued its ramp-up process. Revenue from food and beverage, which is more relevant in select and full-service hotels was flat versus last year, as there were less government troubles in the more competitive group dynamics. Overall, these factors through the addition of the Fiesta Americana Condesa Cancun hotel led to a total revenue growth of 12% versus last year.

In June of this year, we have seen lower overall hotel demand across sectors and segments in Mexico. This was partly due to a general elections. But we have also seen continued softness in demand as there is perceived uncertainty showing up in business spending. We have seen less corporate travel with companies not yet reactivating travel plans and fewer investments in capital-intensive projects. Even though the portfolio occupancy was a healthy 65%, we saw impact in certain regions that have recently posted historically high figures, which complicate -- and which complicated rate optimization. For instance, occupancy at select service hotels decreased almost 400 basis points year-on-year from a high of almost 72% in the third quarter of 2017 to 68% in the third quarter of 2018. It was partly offset by an increase in occupancy at full-service hotels, which were coming off at lower rates.

On the beach side, we saw an especially challenged situation in Cancun, as the market faced several challenges at the same time. This include the highest arrivals of sargassum in Q3 to the Riviera Maya counts and the continued negative press around security issues in the region. Additionally, here, there was new hotel supply in Cancun and in the non-Mexican Caribbean region. Remember that a large portion of the non-Mexican Caribbean inventory have recently been out of service due to last year's hurricane season. Generally, as these hotels come to market, they offer attractive rates and discounts to entice new customer to drive and position the growth.

This has been reflected in a decrease of these visitors to the destination. According to data from the Cancun Hotel Association, the first half of 2018 saw visitor year-on-year flat with 2.4% increase in occupied rooms. This was a result of a 4% increase in supply as well as a decrease from visitors from the United States of 6%, which was offset by a 12% increase in Mexican travelers, as well as increases in visitors from Canada and South America. Even though market data from the association is only available until June, that trend can become more pronounced in the last few months. This increase in pricing and the visitors made the hotels take an aggressive approach with rates in order to maintain occupancy levels. We have also seen that the booking window has shortened from travelers in general. So hotels have not been able to optimize rates as much.

For the quarter, the Fiesta Americana Cancun hotel took an approach to maximize net package ADR, which increased 11% year-on-year, while this led to a decrease in occupancy of 525 basis points year-on-year. Even though the situation will continue to be competitive, we expect better results for the hotel in the fourth quarter and going forward.

Top line results were further impacted at the margin level due to several cost increases above inflation and lower contribution from the Cancun lease as well as the negative operating leverage. We have seen especially challenging environment in energetic costs, which have increased to especially above inflation as the government recently opened the electricity sector to price -- to market prices.

Energetics have a historically represented around 5% of the total hotel revenue. During Q3 of 2017, energetics already represented 6% of the revenue. This increased to almost 8% of the revenue in the third quarter of 2018, which is a 200 basis point impact in market. We have already hired an international adviser to analyze the different staging alternatives and we'll provide further color during our Investor Day.

On the organic front, during the quarter, we made solid progress with our development portfolio, as we opened the 223-room Fiesta Americana Satelite hotel in Mexico City. This hotel is an example of the type of properties we want in our portfolio. It's a large hotel with high values inventory in a very good market with the right product that was delivered on time in an attractive price per feet. The hotel have an good opening and are optimistic with its performance. The Fiesta Americana core product is the same concept we are replicating in the Viaducto, a large high-quality hotel inside the mixed-use Complex in the Mexico City market.

Additionally, the Live Aqua San Miguel de Allende hotel started its pre-operation and will be open to the public in the next few weeks. The luxury hotel in downtown San Miguel is a result of several years of hard work to source a right deal at the right price. We increased the number of rooms in the hotel to 153, and are glad to announce that the hotel will include several high-quality food and beverage outlets that will bring outside customers and revenue to the hotel, including our 5 market restaurants from the recognized chef, John Joe, serving Southern Asian street cuisine, serving a casual, sexy atmosphere. At Zibu restaurant, offering a high-quality Mexican restaurant meat from renowned chef, Eduardo Palazuelos, a local bakery offering fresh made artisan products, a tequila and mixed carb in partnership with Cafe Dragone, a whisky and cigar bar. That hotel will be another landmark property for FibraHotel. We are very excited to host our annual Investor Day event at that hotel, and hope you can join us on November 9 to see this hotel in person. To register, please visit our website or e-mail Guillermo Bravo.

One of our biggest competitive advantage continues to be our strong balance sheet position with a conservative 20% loan-to-value. We continue to be active with our CBFI repurchase program, as we continue to view this as an attractive investment alternative. To date, we have reported over MXN 21 million CBFI, and expect to continue taking advantage of this opportunity. We are in process of canceling part of the repurchase CBFI and will present an authorization for a 2019 repurchase program to the assembly by the end of the year.

We announced a distribution of MXN 0.2074 per CBFI for the quarter. Even though the results are below our expectations, we are laser-focused on reversing the operating trends. We firmly believe in the quality of our portfolio to achieve the best possible results in a challenging macro environment. We understand the trust of our investors have placed on the company, and are highly committed to continue executing our business plan, as we have done through the company's 6-year history as a public company.

With that, I will now pass the call over to Edouard Boudrant, the CFO of FibraHotel, to discuss the financial and operating results of the third quarter.

[Edouard Boudrant, executive]

Thank you, Simón, and good morning, everyone. As you know, FibraHotel started the third quarter with 83 hotels in operation and closed it with 84 hotels. On a comparable property basis of 74 hotels for the 2018 stabilized portfolio, which was fully operational during the third quarter of last year, ADR increased by 6.4% at MXN 1,129, and occupancy rate decreased by 149 basis points at 66.3%. Overall, RevPAR increased 4.1% at MXN 748. The Fiesta Americana Condesa Cancun had a net package ADR of MXN 4,342, occupancy was 72.2%, and net package RevPAR was MXN 3,135, representing a 3.4% increase against the third quarter of 2017.

The ramp-up portfolio comprised with 9 hotels show occupancy rate of 53.5% during the quarter, ADR of MXN 1,358 and RevPAR of MXN 746. Total revenues for the quarter were MXN 981 million, of which 76% was room revenues, 17% was food and beverage revenues and 7% was leases and other revenues. During the quarter, the rent of Fiesta Americana Condesa Cancun stood at MXN 38 million. Compared with the same quarter of last year, revenues increased by 12%.

Quality contribution for the quarter stood at approximately MXN 320 million and our EBITDA, which is MXN 251 million, increasing, respectively, by 18% and 16% versus last year. The lodging contribution margin for managed hotels reached 28.1% versus 29% in the same quarter last year. The contribution margin from stabilized hotels stood at 27.5%. The contribution margin for nonstabilized properties stood at 29.8%. Please note that with 5 recent full-service hotel, as a result of satisfactory ramp-up period and the strong cost control showed occupancy rate of 68% on the contribution of MXN 36 million, representing a 29.6% margin. The EBITDA margin reached 25.6%, increasing 85 basis point versus the third quarter of last year. In the context of lower demand than anticipated and pressure on some cost, EBITDA margin for the quarter went down versus the 2 first quarter of the year.

We closed the quarter with net debt of MXN 2.6 billion. Gross debt amounted to MXN 3.4 billion. We finished the quarter with a very conservative LTV of 20%. Please note that at the end of the quarter, almost all indebtedness is covered with derivative instruments.

Regarding the debt position, during the quarter, we drawdown MXN 243 million in U.S. dollar, $30 million at the LIBOR plus 180 basis points. This exposure to USD-denominated debt allowed us to improve financial cost. We expect to continue with the strategy in order to have a better balance overall debt and its currency. Indeed, we still have the possibility during the next 9 months, to switch MXN 1 billion from Mexican pesos to U.S. dollar.

During the quarter, the debt position generated a financing cost of MXN 79 million. In accordance with the IFRS, financing cost related to development projects are capitalized as part of the investment in each project. During the quarter, approximately 36% of the indebtedness was linked with development projects. Therefore, MXN 31 million of interest were capitalized. Once each development is opened, its interest expenses will not be capitalized anymore and the expense will be part of the P&L statement in accordance with the IFRS.

During the quarter, we continued the development -- the deployment of our cash position with MXN 347 million invested. The development portfolio were MXN 244 million and MXN 103 million for repositioning and maintenance CapEx. In order to give more detail on the portfolio, 64% of our assets were stabilized, MXN 11 billion, and contributed 79% of the total lodging contributions, almost MXN 253 million. Fiesta Americana Cancun represented 18% of our assets, MXN 3 billion and contributed 9% of the total lodging contribution, MXN 38 million. 18% of our assets were in ramp-up or development, MXN 3.2 billion, and contributed only 9% of the total lodging contribution, MXN 28 million. That said, taking into account quarter in our own front and when hotels sort of stabilized, the lodging contributions were strongly increased and these additional results should increase and to some extent EBITDA, improve margin and enhance AFFO.

FibraHotel will pay a distribution of MXN 167 million equivalent to MXN 0.2074 per CBFI. Additionally, we continue to repurchase on CBFI. As of today, we already repurchased 21.1 million CBFI, representing more than 2.6% of the outstanding CBFI at MXN 11.43 average price. Overall, operating and financial performance for the quarter has been weaker than expected, despite the 65% total occupancy rate for our 83 properties. However, we are still comfortable regarding the quality of our portfolio, the ability to deliver stronger results and our asset management team is totally focused on cost efficiency of our hotels.

At this time, I would like to open the floor for the Q&A session. Operator, we are ready to take any questions.

[Operator]

[Operator Instructions] Our first question comes from Sheila McGrath, Evercore.

[Sheila McGrath, analyst]

The Fiesta Americana Cancun, you mentioned you expect fourth quarter to be better than third quarter. I'm just wondering, if that's from normal seasonality that's giving you confidence? Or do you already have some visibility that things have improved this month?

[Simón Zaga, executive]

Sheila, thank you for the question. We -- obviously, there is a seasonality point because the season officially starts in Thanksgiving weekend through December, and obviously, through the winter. So we see some pickup in November. We still see October weak, but we see some pickup in November, and we feel a little better within November and December, in cold that it continues the trend. And we see next year January through March stronger. But we -- as we said on the call, the margin of time of the reservations has -- it has gotten smaller, and we do not know as further as we knew before, but we see a stronger November at least.

[Sheila McGrath, analyst]

Okay, great. And then, if you could just clarify, on the CBFI buyback, you had 1 program announced and you could buy back up to 5% of shares. Is that program almost done? And then -- and you mentioned you'll start a new program in 2019, is that the plan?

[Guillermo Escobosa, executive]

Sheila, this is Guillermo, and thank also for your question. Regarding the CBFI buyback plan, if you remember, what we have authorized is the possibility to purchase up to 5% of outstanding CBFI during the calendar year 2018. To date, we are at around 2.5% of the CBFI we have, so we still have a relevant amount of CBFIs, which we can purchase through the end of the year. However, given that the authorization is for calendar years, we are already looking ahead to 2019 to be ready to continue operating the repurchase program. So what we mentioned in the call that we will do is that we will be calling an assembly probably in December in order to ask for an additional authorization for our plan to be able to continue operating in January of 2019. So overall, we still have a capacity in the plan for around another 20 million shares for the rest of the year, which we will continue buying once our blackout period expire. But we do need additional authorization for calendar year 2019, which we will be seeking by the end of the year.

[Operator]

Our next question comes from Francisco Chávez, BBVA.

[Francisco Chávez Martínez, analyst]

I have 2 questions. The first one is regarding the drop in margins that we saw this quarter. We have seen a severe decline in operating leverage and also you have mentioned repeatedly the increase in energetics costs. Are you working on an expense control program? What can we expect on this front in order to decrease the variation in margins? That would be my first question.

[Edouard Boudrant, executive]

Thank you very much for the question. So basically yes, we have a double negative impact during the quarter. The first one is that we have a strong cash control in terms of the hotels, so basically when you have like a downturn in the PPI, as we were shown during the quarter, the occupancy rate in the stabilized property decreased 150 basis points versus last year. The negative impact is that you have like a negative operating leverage at the level -- hotels level. So basically, you can -- it's very complicated to cut cost and to some extent that you are losing revenues. And the second negative impact is higher energetic cost that we suffered in the portfolio. If we see that the historical percentage of the cost, we were between 5% and 6% of the total revenues on a quarterly basis. This quarter, we were most -- between 7% and 8%, because the revenue decreased, and because the energetic cost on the per unit basis increased a lot. What we've done during the last month -- just to give you what we are doing. During the last month, we have analyzed a lot of alternatives in order to understand what is the issue and how we can improve the cost and the energetic efficiency at the hotel level. And what we decide few weeks ago, is to hire an international adviser that will make a deep analysis of all the portfolio and to give us some recommendation because as you know, when you have a full portfolio of 80 properties across the country, may be a good solution that you will have in Durango will not be so useful to Cancun due to, for example, the transmission of the electricity. So basically what we need, it's a tailor-made solution, and what we are doing is working on permanent solution for efficiency on energetic cost. We will do that in the next few months with the stabilization.

[Francisco Chávez Martínez, analyst]

Okay. And the second question, can you give us more color on how the minimum rent works, because it seems like the rent that you received in this quarter was below the minimum rent. So -- and also, do you expect the rents coming from this property to be above or to be near the minimum rent in the coming quarters?

[Simón Zaga, executive]

The part of way the rent works is a yearly rent of whatever is higher that is 6% return from the price we baked, or the percentage from the operating hotel. So the way it works is, at this moment, we have received between the first, second and third quarter of every month. Now, we received already MXN 135 million, so the issue is that we have still the third quarter to go, and we believe that we're going to be about MXN 200-and-something million by the end of the year, that will depend on occupancy and rate. We're talking about MXN 261 million that we expect that we're going to receive by year's end. If that's the case, we are way higher than the 8%, but we're lower of the 10% that we -- on the low side. So if we have to see it by year, so this third quarter that's one of the issues -- of the large issues we have this quarter that we have gotten a very low rent because in the first and second quarter, we got very good rent out of the hotel. So by the end of the year, it's going to be at MXN 261 million that's what we see. It's not exact because the fourth quarter is yet to be seen. But at the end of the day, we will look at that number and compare it to the 6% we have as the minimum guaranteed rent. But it's a yearly way of looking at it. Hope, I was clear.

[Operator]

Our next question comes from Alejandro Lavin, Citi.

[Alejandro Lavin, analyst]

So I mean, this quarter we saw like the first external negative factors affecting the quarter's numbers. So do you expect this to improve in the fourth quarter and even going forward? So I'm wondering, which of these drivers do you think are one-off? Or which of these drivers do you think could be reverting going forward to see an improvement?

[Simón Zaga, executive]

The answer to that is, Alejandro, we -- unfortunately, we didn't foresee the impact of this third quarter. And that's why, I want to take personal responsibility for it. Our operators for all the meeting that we have every time, we thought of it in May, and that we believe that it was something between June and -- May and June. We said it on the call last 3 trimester, but we didn't believe that it was going to be so soft and in even for Cancun, but it's the low season in Cancun. It was way lower than we expected. As I said, we have put a lot of things that happened, and we really don't want to focus on giving explanations. We want to focus on being very strong at the team and giving results going forward. We did have a bad trimester, we acknowledge that. I have said that in the call many times. But we are focused -- laser-focused on improving that for the next quarter and for the next year. We believe from information we have from the operator and some of the key KPIs that we see -- saw in October, we see in October a little bit better the business hotels, still weak on the Cancun and some beach property. Both, as I said, we have seen some movement on November that we wish it's a trend and it's not only a November thing, but we will be very, very close to the properties. In fact, tomorrow I'm going to be in Cancun with Edouard looking at these trends and strongly as a team we are going to be focused on that. But we do not have a complete view on the trimester other than that we believe that not going to be at negative as this perfect storm as you described happen towards this trimester. We believe that the Cancun property as positive as it was in the first and second trimester because all of the incoming rent are not having this income that valuation of our margins and that's one of the big reasons we are in the situation now. So the only thing I can tell you is that we are going to work hard. We are going to strongly pressure the operators in order to find and reinforce their selling strategy. And we will be very, very close to the properties and I believe -- and I hope, and I believe that we will have a much better fourth quarter.

[Alejandro Lavin, analyst]

Okay, understood. And I have a quick second question, please. Nowadays, what percentage of your rooms are booked through OTAs? And do you see this as a risk to your industry or to your business going forward?

[Edouard Boudrant, executive]

So basically, in the business hotels, we are talking about between 10% and 15% as the rooms are booking at -- through OTAs. And in the result, it's more between us and 60% that are booked through OTAs. We do not see as a risk because, as you know -- notice, a lot of travelers are using more and more OTAs. What we saw in the past few years in the business industry, in the hotels industry, it was additional demand. And I think, maybe we didn't see a lot of cannibalization. And so what we did to minimize the negative impact of the commission that has been -- that we pay to OTAs that we are working with all the operator that we work with to see in which way we can homogenize the legal of the fees that are paid to OTAs. And for example, we got a benchmark, we give the benchmark to one of the operator and they succeed to substantially decrease the fee base to the OTAs. So I think it's something we have to deal with that. We have to push of the direct booking from Marriott.com, from Posadas.com, we are working on that. And it's -- I don't think it's a bigger risk for us. We have to see it as an opportunity to catch more guests in the business hotels again.

[Operator]

Our next question comes from Froylan Mendez, JPMorgan.

[Fernando Froylan Mendez Solther, analyst]

I noticed that you are now including the Fiesta Americana Villa Del Mar as part of the other projects that do not have a defined date of completion or specific budget. Can you elaborate on what is driving that change? And if we should expect to see additional projects starting construction soon? Or if you have shifted a little bit your CapEx allocation strategy towards acquisitions or buybacks?

[Simón Zaga, executive]

Thank you, Froylan. The issue with the Fiesta Americana Villa Del Mar Veracruz is that the developer that was doing the mixed-use project got delayed on the project. So we are analyzing maybe backing out of that project and getting our money back. We're still in conversations with the developer. But 1 of the options is that we are going not to develop that property due to lateness of the development plus the difficult circumstances that are in the Veracruz market. Today, we have AC by Marriott and we are having both ramp-up period. So we are really considering not going forward with that project as we go forward. On the project allocation, one of the good news that we have today and which the very important is that we are opening 2 hotels, the Fiesta Americana Satelite, opened about 1 month ago, with a lot of success. It's a fantastic project. We're really interested. We're already going and seeing it as the new generation project, and we love that kind of projects, mixed-use projects in Mexico City. And that -- and we're opening the Live Aqua San Miguel de Allende with everything that I described over the call, so I will not repeat. But it's going to be a fantastic once-in-a-lifetime project that we can do in a very historical and fantastic city, both for 2 years in a row, by travel and leisure #1 city in the world. And we're going to have a fantastic -- the largest hotel in San Miguel. So we feel very confident about those developments. And the important thing that I want to say is that the development cycle ended. We only have 1 hotel announced in the pipeline that is that Viaducto -- Fiesta Americana Viaducto hotel that will open late 2019. And the issue that we have on the development 20 or 25 projects at the same time at 1 moment, it's not an issue anymore. We are only having 1 project at this time, so these development cycle is over. So that's what's going to happen on the Fiesta Americana Veracruz.

[Guillermo Escobosa, executive]

And just to add to the second part of your question, Froylan, in terms of capital allocation, we do believe that the best use of our money right now is 2 things, to maintain that solid balance sheet structure. So we're very comfortable where we are right now and to continue buying back our shares. In terms of pipeline, we have seen additional opportunities, we haven't seen in the years past. We have seen a lot more sellers interested in coming to the market at more attractive prices and other players and new portfolio that before were not willing to explore transactions are now willing to do so. But we are also very cautious in terms of we want to maintain a proper balance sheet and we want to continue investing in our asset. So we have several properties that you can see in the others. We continue advancing getting the proper permittings and licenses and clarity before we start work on those. And we do see a more positive pipeline environment. But at this point, our best alternative will be to continue buying back our shares.

[Fernando Froylan Mendez Solther, analyst]

Thanks, both Simon and Guille. And lastly, do you know, if once you renew the buyback program, you get to reset to that 5%, despite that you have already bought 2.5%? Or you are tapped at 5% regardless of the year, which you bought the shares?

[Guillermo Escobosa, executive]

The way we understand it is that you first have to -- come from the shares so that the other thing that we are working on. We are working on canceling the shares we have repurchased right now and begin the new share count. The authorization is for 5% on the new share count. So that's what we are working through, but we're still working with advisers and with the commission through all of these processes.

[Operator]

Our next question comes from Pablo Ordóñez, Itaú BBA.

[Pablo Ordóñez, analyst]

One question on Cancun, Simon, I understood that you mentioned that there has been a 4% increase in available rooms in Cancun through the year. Can you expand a bit on what you expect of supply and demand dynamics going forward? And is there any risk of oversupply of rooms in Cancun? That's my first question. And second, you also mentioned that there has been the select semi-segment was weak this quarter. What have you seen in recent weeks? And do you expect a recovery in the fourth quarter?

[Guillermo Escobosa, executive]

Pablo, I'm going to start with the first part of your question, which is the supply-demand dynamic in Cancun. I think that the 4% increase in supply Cancun is not something that scared us with that or that was not expected. The numbers that we see that Cancun is coming off of a very high basis of number of hotels in the market. And these hotels take at least 2 or 3 years as they start to get planning and they start to get construction to really come to market. So we see supply coming into market with good visibility and supply should not be the issue directly at the market. However, there are the 2 things that have had an additional impact. The first of which is the demand, which has been a little bit softer by the better customers, which are the less price sensitive. And the second one is just the other alternative that customers have and we mentioned the non-Caribbean beaches and some other places that compete with Cancun for the leisure traveler as a whole. So we don't see a big issue in terms of there being an oversupply. There certainly will be some new hotels coming into market and there are a lot of projects in Cancun. But the ones that are already in construction and the ones that are specifically in the Cancun hotel area should not be at much of a risk. Where we need to continue to see good visibility is in terms of the demand coming into Cancun in general. And just on the second part of your question, I'll let Edouard or Simón complement, but we don't really see select service as having performed weak. What we tried to convey is that the select hotels were really coming off of historical high. If you remember, when we generally talk about the portfolio, given that it's a business hotel portfolio, we always thought that the occupancy should be below 80%. What we have last year is, we have numbers that were even higher than that, were 72% occupied. And so there was somewhat of a decrease in that -- in those occupancies that went down to 68%. So they continued to be healthy, but unfortunately what happened there is that we were not able to really optimize rates to the same extent that we expected to because of these softness in demand. So we don't really see them as being weak. We just see them being as coming off of some rate and we do expect them to continue to perform well.

[Operator]

There are no further questions at this time. I would like to remind you again about FibraHotel's 2018 Investor and Analyst Call Day on November 9. To register for the event, please visit www.fibrahotel.com/investorday/. Thank you for participating in FibraHotel's 2018 Third Quarter Results Conference Call. If you have any further questions, please do not hesitate to contact FibraHotel's Investor Relations Department. This concludes today's call. I would now like to pass it back over to Mr. Simón Galante for closing remarks.

[Simón Zaga, executive]

Thank you for Participating in FibraHotel's 2018 third quarter results conference call. If you have any further questions, please do not hesitate to contact FibraHotel Investor Relations Department. This concludes today's call. Thank you, and have a great day.

[Operator]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a good day.