Orient-Express unveils Q3 loss

Orient-Express unveils Q3 loss

Orient-Express Hotels has revealed a net loss for Q3 but claims the decline in its revenues is not as dramatic as its competition and that the company’s business model remains resilient in the face of challenging trading conditions.

In line with the majority of hotel companies Orient-Express Hotels has revealed Q3 results with a net loss for the period of $13.0 million on revenue of $144.2 million, down from net earnings $6.4 million on revenue of $176.7 million in 2008.

Commenting on the quarter, Paul White, President and Chief Executive Officer said, “The third quarter has again demonstrated the resilience of the Orient-Express business model. Our focus on the high end leisure traveller and our international diversification translated into RevPAR declines that were not as steep as those experienced by the luxury sector in general or the ‘big brand’ operators that rely heavily on group and corporate business. Nevertheless, the quarter was another challenging trading period for the Company and the industry as a whole.

“During the quarter we continued to expedite the sale of non-core assets, with $86.3 million of sales completed so far this year. A non-binding letter of intent has since been signed for the sale of a third non-core hotel asset, and total proceeds are expected to rise to over $100 million by the end of 2009. The completed sales, coupled with the equity raised in April, has helped to reduce our net debt from $835.3 million at December 31, 2008 to $705.8 million.
 
“Progress continues on our Real Estate developments in St. Martin. The construction of Porto Cupecoy is nearing completion, with the grand opening
scheduled for February 2010. To date the project is nearly 50% sold. We expect the balance of 93 condominiums to be sold over the next two to three
years at an anticipated average price of $0.6 to $0.7 million, which will further deleverage the balance sheet.
 
“Trading has been consistent with our expectations. It is particularly pleasing to see the operational efficiencies continue through the high season, when savings are more challenging in the luxury sector. Again in this quarter, we achieved savings sufficient to offset 47% of the revenue drop, excluding Charleston Place, which was consolidated from January 1, 2009.”

“As we enter the low season period, we see business conditions continuing to stabilize. Bookings remain very last minute, a trend we expect to continue into 2010”, he concluded.

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Orient-Express, based in Bermuda is the name behind an elite collection of travel experiences and first came into being in 1883 as one of the world’s most exciting and indulgent train journeys.  Today the name also embraces hotels, cruises and other luxury rail adventures in 25 countries, across five continents.