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Letter from the CEO

February, 2019.

Dear Board Members and Shareholders:

In 2018 we continued with the consolidation of our company’s growth and its industry leadership. Tourism continues to be a strategic factor in Mexico sustaining a growth since 2015 higher than that of the economy as a whole. Currently, Mexico is ranked 6th in foreign tourist arrivals by the World Tourism Organization.

Hotel occupancy in our country is among the highest in the world. The number of arrivals keeps increasing year after year with 39 million visitors at the end of 2017 and 27.7 million in the first eight months of 2018.

Despite the fact that travel warnings for Cancun and Los Cabos issued the previous year were removed at the beginning of 2018, the arrival of international groups of the resort segment was affected throughout the year.

Since the US market is the main contributor of visitors to our country, our platform for international promotion, La Colección, has become the permanent campaign tool of our resorts at the main destinations.

With a total investment of $445 million pesos, the Live Aqua Beach Resort Cancun Hotel underwent a total remodeling of its rooms, public areas and restaurants, ending successfully early this year.

PROFITABLE GROWTH

Featuring the opening of the Live Aqua San Miguel de Allende and the Fiesta Americana Mexico Satelite, in 2018 we opened 16 hotels with a total of 2,221 rooms.

With these openings we closed the year with 175 hotels in more than 60 destinations with more than 27,400 rooms. In addition, we closed 22 long-term hotel agreements with 3,162 rooms.

With these openings, we now have 49 agreements for approximately 9,300 rooms representing an increase of 34% of our total current inventory.

For 2019, our development plan considers 24 openings that will feature the Gran Fiesta Americana Oaxaca, Fiesta Americana San Luis Potosi and the Fiesta Americana Viaducto Churubusco.

Moreover, we consolidated our position as operators and owners of 12.5% of the Tulkal hotel project in the Mayan Riviera. Two hotels are being built at this development: a Fiesta Americana with 515 keys and a Live Aqua with 340 keys with a scheduled openingin the first quarter of 2021.

Memorable Experiences

Permanently seeking to satisfy the needs of our guests and to interpret market tends, we continuously reinvent ourselves through the creation of new brands aimed at new segments and the consolidation of those already in existence in order to increase the attractiveness of our portfolio for investors.

Today, our portfolio has 9 brands in the hotel market and 4 in the Club Vacacional market.

We implemented the Net Promoter Score (NPS) culture as an essential indicator for measuring hotel performance on the basis of guest assessment and our customer-centered philosophy.

Marketing and Sales

In 2018, once again we achieved a record number of reservations processed through our distribution suite.

We keep improving our platforms in order to sustain our competitive edge, improve booking cost and ensure ever greater economies of scale.

Live Aqua Urban Resort Monterrey

Loyalty PROGRAMs and campaigns

Now in its ninth year, the Viaja por Todo México campaign accounted for 20% of sales growth with respect to 2017.

The Fiesta Rewards program was present in the media (television, cinema, digital, and magazines among others) through a communication campaign which contributed 21% of the occupancy in the system. Throughout the year 124,200 new members joined the program, which reached 145,000 active members.

The Santander Fiesta Rewards card increased its membership by 35%, issuing 47,552 new cards for a total of 145,000 active cards.

Vacation Properties

The Fiesta Americana Vacation Club closed the year with 30,000 members, a 4.2% growth with respect to the year before.

Net membership sales, including Kivac -the 42,765-member traveler community that generates 195,040 rooms/night- and Re_Set, generated $3,068 million pesos, 15% more with respect to 2017. Total income from vacation products reached $4,188 million pesos, a growth of 14% with respect to the previous year.

Our vacation club is the second generator of rooms/night for Grupo Posadas after Expedia.

Financial Results

This year we had an EBITDA of $2,425 million pesos that included the sale of the Fiesta Americana Condesa Cancun hotel. This -our main source of cash- allowed us to:

The above strengthened our balance, allowing us to close the year with a 2.1 net leverage ratio (Net Debt/EBITDA) and a 5.0 interest coverage ratio.

The detailed 2018 financial situation is presented in the Financial Statements of this report and shows the duly explained and itemized results of the society for the year. In addition, it presents changes in the financial situation in the year and shows the changesin the items that were part of corporate patrimony in 2018. Necessary notes which complete and clarify the information in the financial statements are also detailed in the Independent Auditor Report and in the consolidated financial statements of Grupo Posadas S.A.B. de C.V. y Subsidiarias for 2016, 2017 y 2018, issued by Galaz, Yamazaki, Ruiz Urquiza S.C. (Deloitte).

Our people Make the difference

The pride of being Posadas is more present than ever.

We kept our Great Place to Work certification and climbed four places in its ranking to 4th, great news that we have shared and which encourage us to keep promoting practices that will have a positive impact in the quality of life of our associates.

Today, we are over 18,300 Posadas associates, sharing the philosophy of creating experiences that will turn moments into memorable stories.

The strength of Posadas lies in the joint efforts of its management team, its associates, its guests and its partners. Together we have been able to build the company we now have; to all of you, my utmost appreciation and gratitude.

José Carlos Azcárraga

CEO