�We are very pleased with the first quarter results which reflect strong operating performance in virtually all of the markets in which we operate,� commented Isadore Sharp, Chairman and Chief Executive Officer. �Looking out over the remainder of 2000, we believe that the fundamentals are in place for continued growth, at a time when we are adding important new properties to the portfolio, such as the Four Seasons Hotel George V in Paris, which are expected to contribute significantly to the global growth of the Four Seasons brand.�

Internal Growth and New Units Combine to Increase Management Earnings by 30%

As a result of strong operating results in the Core Hotels(1) under management and fees from new projects or recently opened hotels, total fee revenues increased more than 19% to $39.2 million in the first quarter of 2000, as compared to $32.9 million in the first quarter of 1999. Total revenues of all managed hotels increased to $651.4 million for the quarter ended March 31, 2000, as compared to $553.5 million for the same period in 1999.  Hotel management earnings, before other operating items, for the first quarter of 2000 increased 30% to $24.8 million, as compared to $19.1 million in the first quarter of 1999. The profit margin of the hotel management operations expanded to 63.3% in the first quarter of 2000, as compared to 58.1% in the first quarter of 1999. The expansion in the margin reflects the leverage in the profitability of the Company�s business model.

Continued RevPAR Growth in Asian, United States and European Hotels

The US Core Hotels continued their solid operating performance in the first quarter of 2000, with an improvement in RevPAR(2), on a US dollar basis, of 11.6% and an improvement in gross operating profits of 19.7%, as compared to the first quarter of 1999.

In the first quarter of 2000, RevPAR in the Company�s Asian Core Hotels, on a US dollar basis, increased 14.1%, while gross operating profits increased 29.5%, as compared to the first quarter of 1999. This strong improvement in RevPAR reflects the continued economic recovery in the Asian markets. Virtually all of the Company�s hotels in the Asian region continued to realize operating profit efficiencies, as the operating profit margins improved from 33.3% in the first quarter of 1999 to 37.5% in the first quarter of 2000. The Asian hotels� profitability levels have now returned to the level last achieved prior to the Asian economic downturn.

The RevPAR in European Core Hotels, on a US dollar basis, increased 11.7%, and gross operating profits improved 32.3% in the first quarter of 2000, as compared to the same period in 1999. The Company benefitted from improving economic conditions in a number of its European markets.

Hotel Ownership Results

Hotel ownership operations lost $2.1 million, before other operating items, in the first quarter of 2000, as compared to a loss of $4.8 million in the first quarter of 1999. The loss in both years is due primarily to the normal seasonality of demand levels in our ownership assets. The decrease in the loss is attributable to strong operating performance at The Pierre in New York and The Regent Hong Kong. The Pierre realized more than a 20% increase in revenues due to high rooms and banqueting demand in the first quarter of 2000, as compared to the first quarter of 1999. The dividend distributions from The Regent Hong Kong improved in the first quarter of 2000, as compared to the same period in 1999 as a result of continued operating improvements at that hotel as Hong Kong inbound travel levels continue to improve.

Interest Income

During the first quarter of 2000, the Company had net interest income of $717,000, as compared to $1.1 million of net interest expense in the first quarter of 1999. This change is due to the interest income earned on cash reserves and on investments made in notes receivable in connection with certain new projects. The Company�s cash reserves were $210.4 million as at March 31, 2000, as compared to $11.4 million as at March 31, 1999.

Income Tax Expense

The Company�s effective tax rate in the first quarter of 2000 was 26.4%, as compared to an effective rate of 4.8% in the first quarter of 1999. This increase in the effective tax rate is due to the utilization in 1999 of the benefits of the unrecorded tax losses created by the write-down in hotel investment values in 1993 and 1995 and the implementation of the new Canadian income tax accounting standards (see note 1(a) to financial statements).  The increase in the effective tax rate caused the income tax expense to increase by $4.7 million in the first quarter of 2000, as compared to the first quarter of 1999. It is expected that the majority of this increased tax expense will be paid currently in fiscal 2000.

Also, included in the first quarter tax expense is an expense related to the one percent reduction in the Canadian income tax rates for 2000, announced by the Canadian Federal government in the first quarter of 2000. This one time expense (�Reduction of future tax asset�) is a result of the decrease in the income tax rates relating to the ongoing benefit of the Company�s deferred tax assets. Without this item, the Company�s effective tax rate for the first quarter of 2000 would have been 25%.

New Unit Growth

Four Seasons Hotels and Resorts is the world�s largest operator of luxury hotels. The Company currently manages 47 hotels in 19 countries.

Four Seasons is expanding its international presence; during 1999 new Four Seasons hotels and resorts were opened in Las Vegas, Nevada; Punta Mita, Mexico; Scottsdale, Arizona; Canary Wharf, London; and Paris, France.  The Company currently has 21 new hotels and resorts under construction or in advanced stages of development including projects in Alexandria, Egypt; Amman, Jordan; Beirut, Lebanon; Bodrum, Turkey; Budapest, Hungary; two hotels in Cairo, Egypt; Caracas, Venezuela; Costa Rica; Cote D�Azur, France; Doha, Qatar; Dublin, Ireland; Exuma, The Bahamas; Miami, Florida; Prague, Czech Republic; Puerto Rico; Riyadh, Saudi Arabia; San Francisco, California; Shanghai, People�s Republic of China; Sharm el Sheikh, Egypt and Whistler, British Columbia.  As part of a program to capitalize upon its brand name, service and marketing expertise, Four Seasons licenses and manages luxury Residence Club projects and other residential projects. Both the Four Seasons resorts in Punta Mita and Scottsdale will include Four Seasons� Residence Club developments. These new Four Seasons Residence Clubs will complement Four Seasons first vacation ownership development, the Four Seasons Residence Club Aviara in Southern California. Other new Four Seasons resorts and certain city-centre hotels are also expected to include a Residence Club component.

Conclusion

�The financial results of the quarter reflect continued strength in our core business and increased revenues from newly opened Four Seasons hotels and hotels under development,� commented Douglas L. Ludwig, Executive Vice President and Chief Financial Officer. �Virtually all of the hotels under management exceeded their business plan for the first quarter of 2000. Over the latter part of this year, we expect that RevPAR will grow at a more moderate pace and we will see greater contributions from our recently opened hotels as they achieve higher occupancies, room rates and profitability.�
All dollar amounts referred to above are Canadian dollars unless otherwise noted. The financial statements are prepared in accordance with Canadian Generally Accepted Accounting Principles.
 

(1) The term �Core Hotels� means hotels and resorts under management or anticipated to be under management for the full year of both 2000 and 1999. Changes from the 1999/1998 Core Hotels are the additions of the Four Seasons Hotel Berlin, the Four Seasons Resort Kuda Huraa and the Four Seasons Resort Bali at Sayan.
(2) Occupancy percentage is defined as the total number of rooms occupied divided by the total number of rooms available.
(3) ADR is defined as average daily room rate per room occupied.
(4) RevPAR is defined as average room revenue per available room. RevPAR is a commonly used indicator of market performance for hotels and represents the combination of the average daily room rate and the average occupancy rate achieved during the period. RevPAR does not include food and beverage or other ancillary revenues generated by a hotel.
(5) Gross operating margin represents gross operating profit as a percent of gross operating revenue.
 

Certain statements contained in this press release that do not relate to historical information are �forward-looking statements� within the meaning of the United States Private Securities Litigation Reform Act of 1995 and are thus prospective.