The 'BB-' rating on Grupo Posadas S.A. de C.V. reflects its somewhat high financial leverage, the cyclicality of the hotel industry, and geographic concentration within Mexico. These factors are offset by the company's position as the largest hotel operator in Mexico, a diversified hotel portfolio with well-recognized brands, and the development of competitive advantage through technology. As of first-quarter 2005, Posadas operated 92 hotels with a total of 17,395 rooms. The company's operations are concentrated in Mexico, where it runs 74 hotels (81% of total rooms). It also operates 11 hotels in Brazil, six in the U.S., and one in Argentina. Approximately 29% of Posadas' rooms were located in the coastal hotels, and the remaining 71% in interior-city hotels. During
