PRNewswire-FirstCall TORONTO Nov. 6 :

Four Seasons Hotels Inc. (TSX Symbol “FSH”; NYSE Symbol “FS”) today
reported its results for the third quarter ended September 30, 2003.

“Hotels under Four Seasons management had a strong improvement in
operating performance in the third quarter. Increases in travel demand
that began at the end of the second quarter continued into the fall. This
improvement in demand was reflected in increased occupancy which, when
combined with our clients` recognition of our hallmark service, allowed us
to realize higher room rates in many of our hotels under management,” said
Isadore Sharp, Chairman and Chief Executive Officer. “In addition to the
improving operating environment, we expect our financial results to be
bolstered by the addition of new Four Seasons properties in 2003. By the
end of this year, we expect to have opened four new hotels and resorts. We
also reopened the hotels under management in Jakarta and Prague, both of
which had been closed for repair after sustaining extensive flood damage
in 2002.”
The Company realized net earnings of $4.7 million ($0.14 basic earnings
per share and $0.13 diluted earnings per share) for the three months ended
September 30, 2003, as compared to a net loss of $12.3 million ($0.35
basic and diluted loss per share) for the third quarter of 2002. The
increase in net earnings for the third quarter of 2003 occurred despite
increased losses from ownership operations and ongoing legal and
enforcement costs relating to the disputes with the owners of the hotels
in Seattle and Caracas, which are discussed below under “Proceedings”. The
financial results for the three months ended September 30, 2002 include an
asset impairment charge, net of applicable income taxes, of $17.5 million
($0.50 basic and diluted loss per share) relating to the Company`s
investments in Four Seasons hotels in Caracas and Sydney, as discussed in
the Company`s 2002 Annual Report. For the three months ended September 30,
2003, adjusted(1) net earnings were $5.4 million ($0.16 basic earnings per
share and $0.15 diluted earnings per share), as compared to $4.3 million
($0.12 basic and diluted earnings per share) for the three months ended
September 30, 2002.

For the nine months ended September 30, 2003, net loss was $5.8 million
($0.17 basic and diluted loss per share), as compared to net earnings of
$13.6 million ($0.39 basic earnings per share and $0.37 diluted earnings
per share) for the comparable period in 2002. The decline in net earnings
for the nine months ended September 30, 2003 is primarily attributable to
a non-cash, unrealized foreign exchange loss for accounting purposes of
$17.2 million, which arose as a result of significant movements earlier
this year in the US and Canadian dollars, pound sterling and the euro, as
compared to a non-cash, unrealized foreign exchange gain for accounting
purposes of $4.5 million in the same period in 2002. Increased losses from
ownership operations and legal and enforcement costs relating to the
disputes with the owners of the hotels in Seattle and Caracas, which are
discussed below, also contributed to the decline.

For the nine months ended September 30, 2003, adjusted(1) net earnings
were $16.9 million ($0.48 basic earnings per share and $0.47 diluted
earnings per share). Adjusted(1) net earnings for the nine months ended
September 30, 2002 were $28.9 million ($0.82 basic earnings per share and
$0.79 diluted earnings per share).

“We continue to meet our financial objective of funding new development
opportunities with cash generated by operations. For the first nine months
of this year our cash flow from operations increased 37% to $44.1
million,” said Douglas L. Ludwig, Chief Financial Officer and Executive
Vice President. “With concrete signs that the major global economies are
recovering, we expect to continue to see solid improvements in cash
generated from our management business.”

OPERATING ENVIRONMENT
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Please see the accompanying “Summary of Hotel Operating Data” for regional
RevPAR(2) and gross operating profit margin(3) statistics by geographic
region.
The third quarter includes two months (July and August) that historically
have reflected lower business travel relative to the balance of the year.
However, extending from trends starting late in the second quarter of this
year, the operating environment continued to strengthen over the course of
the third quarter with increased travel demand coming from the business
sector and continued healthy leisure demand. The improvement in demand has
continued into the fourth quarter. However, consistent with what the
lodging industry is currently experiencing, the time period in which
business is booked continues to be shorter than the historical norm. Each
of the regions in which the Company operates realized improvements
throughout the third quarter. In particular, the hotels under management
in the US generally experienced strong occupancy and achieved room rate
increases during the quarter.
Occupancy at the Company`s worldwide Core Hotels(4) increased from 61.9%
in July to 64.1% in August to 67.9% in September. While, in aggregate,
occupancy was relatively unchanged in both July and August on a
year-over-year basis, this was the result of some continued demand
weakness in the Asian, Vancouver and Toronto markets as they continued to
recover from the effects of SARS, which partially offset improvements in
the other regions. During the third quarter, on a worldwide basis,
achieved room rates increased 3.5%, on a US dollar basis, as compared to
the same period last year.

There was an increase in demand in virtually all of the hotels under
management in the US during the third quarter of 2003, as compared to the
third quarter of 2002. The majority of the Four Seasons resorts in the US
continued to realize strong demand reflecting relatively healthy leisure
travel, and for the first time in many quarters there was an improvement
in business travel levels at most city center hotels. Improving demand,
combined with a growing service differential that distinguishes Four
Seasons from other luxury hotel operators resulted in an increase in
achieved daily room rates at the US Core Hotels under management of 3.1%
in the third quarter, from approximately US$311 in 2002 to over US$320 in
2003. Despite a difficult cost environment with increased health care,
insurance and energy costs, the US Core Hotels realized an improvement in
gross operating profit margin to 22.4% in the third quarter of 2003, as
compared to 21.8% for the same period in 2002.
Although the Asia/Pacific region continues to experience some lingering
effect from SARS, demand has improved significantly from the lows of 20%
occupancy experienced in April and May of this year. Occupancy in the
region increased from 53.5% in July 2003 to approximately 62% in both
August and September 2003, compared to approximately 60% and 65%,
respectively, for the same periods last year. The two resorts under
management in Bali continue to experience weak demand relative to the
demand within the region as that market continues its recovery from the
effects of SARS and the terrorist acts in October of last year. As a
result of the severe decline in occupancy and a reduced demand for suites,
achieved room rates in the region declined during the third quarter of
2003, as compared to the same period in 2002. However, consistent with
demand improvements through the quarter, achieved room rate performance
improved on a month-by-month basis within the quarter.

The operating performance of the Other Americas/Caribbean Core Hotels was
similar to the Asia/Pacific Core Hotels. Although RevPAR declined during
the third quarter of 2003, as compared to 2002, travel demand in Other
Americas/Caribbean Core Hotels improved sequentially month by month within
the quarter. The properties under management in the Other
Americas/Caribbean Core Hotels performed better than the average for the
group.
Consistent with the worldwide results, trends at the Core Hotels under
management in Europe and the Middle East improved during the quarter. On a
year-over-year basis, occupancy was weaker in July, but had solid
improvements in August and September. The Berlin market continues to
suffer from an abundance of supply of high-end hotel rooms. The hotels
under management in London, Dublin, Lisbon, Milan and Cairo all had better
demand on a year-over- year basis. Although Four Seasons Hotel George V
Paris experienced a small decline in occupancy on a year-over-year basis,
it achieved over 80% occupancy during the third quarter of 2003. Achieved
room rates improved during the quarter for Europe/Middle East Core Hotels,
on a US dollar basis. On a local currency basis, the majority of the
properties also experienced achieved room rate improvements.
“We are very pleased with our industry-leading RevPAR and operating margin
performance,” said Wolf Hengst, President Worldwide Hotel Operations. “Our
general managers have been with Four Seasons an average of seventeen
years, and we believe their broad experience and talent provides a
tangible advantage as we manage through changing environments. We also
believe that our performance demonstrates the success of our strategy,
which continues to focus on service and value. These results show that,
now more than ever, travelers need and appreciate the quality of
experience they receive at Four Seasons.”
Management fee revenues increased 10.9% to $36.2 million for the quarter
ended September 30, 2003, as compared to the same period in 2002.
Contributing to the increase in management fees was an increase in base
management fees as a result of the improved operating environment at Core
Hotels, and increased fees from recently opened hotels and the Four
Seasons Olympic Hotel Seattle settlement, which is discussed under
“Proceedings”. The increase in management fees was moderately offset by
declines at certain of the hotels, including the Canadian and Asian
hotels, which had very weak July and August results as those markets
continue to recover from the impact of SARS on travel and, in the case of
Bali, from the effects of the terrorist acts in October of last year. Fees
from these hotels were $1.4 million lower in the quarter ended September
30, 2003, as compared to the same period in 2002.

For the nine months ended September 30, 2003 management fees were
essentially unchanged at $109.2 million, as compared to $108.6 million for
the same period in 2002. This reflects the improvements noted above during
the third quarter, offset by a decline in management fees during the first
six months of 2003, primarily as a result of the impact of the war in Iraq
and SARS on worldwide travel demand.

General and administrative expenses increased 0.1% and 3.9% to $17.2
million and $50.1 million for the three months and nine months ended
September 30, 2003, respectively, as compared to the same periods in 2002.
The general and administrative expenses included a cost of living payroll
increase for corporate employees, which was implemented during the first
quarter of 2003. As there was no cost of living payroll increase for
corporate employees in the first or second quarter of 2002, the nine-month
increase is slightly larger than the quarterly increase.

The Company`s management operations earnings before other operating items
for the third quarter of 2003 increased 23.0% to $19.0 million, as
compared to $15.5 million for the third quarter of 2002. Management
operations earnings before other operating items for the nine months ended
September 30, 2003 were $59.1 million, as compared to $60.4 million for
the same period in 2002.

The management operations profit margin(5) for the quarter ended September
30, 2003 was 52.5%, as compared to 47.4% for the same period in 2002, and
was 54.1% for the nine months ended September 30, 2003, as compared to
55.6% for the same period in 2002.

Ownership operations losses before other operating items were $9.2 million
in the third quarter of 2003, as compared to losses of $6.6 million in the
third quarter of 2002. Ownership operations losses before other operating
items for the first nine months of 2003 were $27.8 million, as compared to
losses of $15.0 million for the comparable period in 2002.

The majority of the third quarter losses was generated by The Pierre,
which contributed approximately $5 million to the ownership loss in the
quarter in both 2003 and 2002. Although The Pierre`s RevPAR for the
quarter ended September 30, 2003 increased 9.5%, due primarily to
union-mandated increases in labour and health care costs, the operating
performance for the third quarter of 2003 was essentially unchanged, as
compared to the same period in 2002. For the nine months ended September
30, 2003, The Pierre contributed $10.7 million to the loss, as compared to
$5.9 million for the same period in 2002. For the nine months ended
September 30, 2003, The Pierre`s RevPAR declined 2.1%, as compared to the
same period in 2002. In addition, the other revenues of the hotel
declined, as a result of a decline in banqueting and ancillary revenues
for the nine months ended September 30, 2003. The combination of these
lower revenues with higher labour costs resulted in the increased loss
from The Pierre during the nine months ended September 30, 2003, as
compared to the same period in 2002.

Primarily as a result of travel disruption relating to SARS, Four Seasons
Hotel Vancouver experienced weak operating conditions, with RevPAR, on a
local currency basis, declining 10.8% and 15.3% for the third quarter and
first nine months of 2003, respectively, as compared to the same periods
in 2002. The operating loss at Four Seasons Hotel Vancouver increased by
$1.2 million and $3.1 million in the third quarter and first nine months
of 2003, respectively, as compared to the same periods in 2002.

In addition, Four Seasons Hotel Berlin experienced a weak third quarter
with a RevPAR decline of 6.3% and 5%, on a US dollar basis, for the three
and nine months ended September 30, 2003, respectively, as compared to the
same periods in 2002. The operating loss at Four Seasons Hotel Berlin
increased by $629,000 and $2.8 million in the three and nine months ended
September 30, 2003, respectively, as compared to the same periods in 2002,
as a result of lower operating profits and increased lease costs.

The Company`s obligation to fund any stipulated minimum lease payments at
Four Seasons Hotel Berlin is limited to a maximum of approximately 11
million euros. The Company reached this maximum during the third quarter
of 2003 and has ceased funding any stipulated minimum lease payments. The
landlord may terminate the lease if the stipulated minimum lease payments
are not paid in full for a 12 consecutive month period or there is an
aggregate shortfall of six months of the stipulated minimum lease payments
at any time.

The Company is in discussions with the landlords of The Pierre, Four
Seasons Hotel Berlin and Four Seasons Hotel Vancouver to determine what,
if any, alternatives may be available to change or restructure the
Company`s investments in these hotels. There can be no assurance that
acceptable alternative arrangements will be agreed upon with respect to
any or all of these hotels.

Full details at Four Seasons Website
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