Orient-Express Hotels Reports 2003 Results

Orient-Express Hotels Ltd. (http://www.orient-express.com/), investor in
44 deluxe hotel, restaurant, tourist train and river cruise properties in
21 countries and manager of 38 of those properties, today announced its
results for the fourth quarter and year ended December 31, 2003. For the
quarter, net earnings were $8.6 million ($0.27 per common share) compared
with $4.2 million ($0.14 per common share) for the fourth quarter of 2002.
Revenue was up 10% to $80.6 million from $73.4 million in the prior year
period. For the year ended December 31, 2003 net earnings were $23.6 million
($0.76 per common share) compared with $25.3 million ($0.82 per common
share) in the year ended December 31, 2002. Revenue for 2003 was up 12%
from 2002, from $289.3 million to $325.2 million. Changing currency
values, particularly the Euro, British Pound and South African Rand
distorted the revenue increase, while at the same time revenue from the
Hotel Quinta do Lago ceased in November, 2003 upon its sale. The company
realized a gain on sale of this property of $4.2 million which has been
included in net earnings.

Mr. James B. Sherwood, Chairman, said that the fourth quarter results were
in line with expectation. He pointed out that Bora Bora Lagoon Resort and
Maroma Resort and Spa were closed for much of the period for major
upgrade, and start-up costs for La Caba̱a which opened in October had to
be entirely expensed in accordance with US GAAP accounting rules.

“The year 2003 has been greatly influenced by SARS at the start, the Iraq
War coming at the peak booking period, strengthening of European and South
African currencies, political hostilities affecting US tourism to France,
and until recently weak business traveller demand. These events are
changing the matrix of travel and we are moving quickly to adjust. For
example, New York and the Hawaiian Islands recorded in 2003 occupancies
back to 2000 levels because of the influx of Europeans to New York and
Asians to the Hawaiian Islands. This shift is undoubtedly due to the
strong Euro, British Pound and Japanese Yen. Our strategy is to capture
European and Asian guests for our North and South American properties
while at the same time taking advantage of increased domestic demand. We
believe operating results in 2004 will be strong for our properties in
these markets.

“In Europe, fortunately our properties largely do not depend on guests
from dollar bloc countries. Only the Lisbon and Carcassonne hotels and the
Venice Simplon-Orient-Express have suffered from the downturn in visitors
from dollar bloc countries and we have refocused our sales and marketing
more towards European and Japanese regional demand to compensate.

“Asia is seeing a resurgence of demand now that the SARS epidemic has
passed. Currencies in the countries in which we operate there are
generally linked to the US dollar rather than European or Japanese


“We believe that our properties in Botswana, Myanmar and French Polynesia
have been held back because of poor access so we are in the process of
developing new air services to support them. In my opinion these
properties are unique and should be operating at capacity during their
seasons. They should do so if guests have convenient access.

“The recent report from British Airways of the sharp increase in premium
class bookings bodes well for our top end segment of the leisure
business,” he concluded.

Mr. Sherwood indicated that three investments are in active negotiation,
two of which are in Europe and the third in Asia. The Asian property would
complement the recently announced investment in the five Pansea hotels in
Southeast Asia. Offers have also been made for one property in the US and
another in South America. The company has also made an offer for a
property in Eastern Europe.

Simon Sherwood, President, said that same store RevPAR was up 12% in the
fourth quarter of 2003 compared with the year earlier period, to $171 from
$152. For the year as a whole, RevPAR was up 9% to $183 from $168. In
local currencies RevPAR was down 1% for the quarter and down 4% for the