Fitch rates Grupo Posadas

Fitch Ratings said it assigned a foreign and local currency rating of BB- to the unsecured debt obligations of Grupo Posadas SA de CV. Fitch has also affirmed the national scale rating of Posadas at A(mex).

The outlook for all ratings is stable.

According to Fitch, the ratings are supported by Posadas' solid business position and strong brand recognition (Fiesta Americana, Fiesta Inn in Mexico and Caesar Park, Caesar Business in Argentina and Brazil), which results in occupancy levels above the industry average in Mexico, presence in all major urban and resort locations in Mexico, somewhat diversified revenue base with approximately one fifth of room capacity located outside Mexico, and multiple hotel formats that target domestic and international business travelers and tourists.

The ratings are constrained by a strong competitive environment due to the highly fragmented lodging industry in Mexico and growing offer of room capacity, which has significantly pressured rates. Adverse economic and political events in Mexico, Argentina, and Brazil could also affect occupancy levels and rates.

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