The rating on Posadas reflects its somewhat high financial leverage, cyclicality of the hotel industry, and geographic concentration within Mexico. These factors are offset by the company's being the largest hotel operator in Mexico, a diversified hotel portfolio with well-recognized brands, and the development of competitive advantage through technology. Posadas operated 83 hotels with a total of 15,799 rooms as of June 2004. The company's operations are concentrated in Mexico, where it runs 65 hotels (80% of rooms, generating 85% of the EBITDA). It also operates 11 hotels in Brazil, six in the U.S., and one in Argentina. Although maintaining the same base of directly owned hotels, Posadas is gradually changing its mix so that its growth primarily derives from
