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  Orient-Express Hotels Ltd. Reports Net Earnings of
$25.3 million for Year Ending 2002; RevPAR Down
2% for the Year
HAMILTON, Bermuda, March 5, 2003 - Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owner-operator of 41 luxury hotels, tourist train and river cruise properties in 17 countries, today announced its results for the quarter and year ended December 31, 2002.  For the quarter, net earnings were $4.2 million ($0.14 per common share) compared with $3 million ($0.10 per common share) for the fourth quarter of 2001.  Revenue was up 25% quarter to quarter, from $59 million to $73 million.

For the year ended December 31, 2002 net earnings were $25.3 million ($0.82 per common share) compared with $29.9 million ($0.97 per common share) in the year ended December 31, 2001.  Revenue for 2002 was up 11% from 2001, from $261 million to $289 million.

Mr. James B. Sherwood, Chairman, said that fourth quarter earnings were in line with "street expectations".  He indicated that the luxury hotel industry was adversely impacted in early 2002 by the September 11, 2001 terrorist attacks and towards the end of the year by the Iraqi situation.  Poor weather in Europe in the summer, mediocre stock market performance in the U.S. and U.K., a weak economy in Germany and strengthening of the Euro against the U.S.  dollar were other temporary factors which prevented the company from achieving improved results.

"The company made three excellent acquisitions in 2002, European tourist trains had an outstanding year and South African hotels achieved greatly improved results.  Major works at the Copacabana Palace Hotel and the Inn at Perry Cabin contributed to a combined reduction in EBITDA at these properties but these works are now complete and we expect improved results there in 2003."

"The company has traditionally insured its properties centrally and was faced with an unusually large increase in insurance costs at mid-year, causing such costs to rise in the second half of the year by $1 million over the prior year period.  The company's insurance coverage has now been changed entirely, from a centralized system to a regional one, effective January, 2003, at a savings of $2 million p.a."

"We are still left with a situation where a proportion of international travel will be deterred as long as the uncertainties over Iraq persist.  Clearly, this will adversely impact results in the early months of 2003.  Our main earnings period is May through October so we hope Iraq will be behind us before it starts".

"The company continues actively to negotiate the acquisition of additional properties and hopes to make an announcement in this respect before long," he concluded.

Simon Sherwood, President, said that same store RevPAR was up 6% in the fourth quarter of 2002 compared with the year earlier period.  For the year as a whole, RevPAR was down 2%.  The progression of RevPAR change in 2002 was down 12% in the first quarter, down 8% in the second quarter, up 5% in the third quarter and up 6% in the fourth quarter.

Same store RevPAR in dollar terms was $148 in the fourth quarter of 2002 compared with $140 in the year earlier period.  For the year 2002 RevPAR in dollars was $166 vs. $170 in the prior year.

He said that while works are proceeding satisfactorily at La Cabana in Buenos Aires, and a "soft opening" is now planned for August. Unemployment in Argentina is rapidly declining, the peso has strengthened, exports have risen and tourist arrivals have increased.

He said that Southern Africa, South and Central America were perceived as "safe" travel destinations of exceptional good value and the company has a strong position in these markets.
 

Orient-Express Hotels avoids the use of a chain brand. Thus, none of its properties are branded �Orient-Express� (except the train). Management believes that discriminating travellers will choose an individual property of fame in priority to a chain brand. In the few locations where the company competes with deluxe brand chains (Venice, Lisbon and Rio de Janeiro are examples) it achieves up to 40% higher average rates than the chain-brand hotels.

The fourth quarter and full year's 2002 results can be summarized as follows:

Owned European hotels.  For the quarter, EBITDA was $1.7 million compared with $1 million in the year earlier period.  For the year EBITDA was $29.2 million compared with $26.9 million in 2001.  The main adverse deviations were the Hotel Cipriani which suffered a loss of U.S. visitors and the Lapa Palace in Lisbon which had less business traveller arrivals.  The La Residencia and Le Manoir acquisitions accounted for the improvement in European EBITDA.

Owned North American hotels.  EBITDA for the quarter was $2.4 million vs.  $3 million and for the year EBITDA was $11.1 million vs. $14.6 million.  La Samanna was badly affected by September 11th which was just in advance of its peak season.  The Inn at Perry Cabin was closed for a large part of the year and New Orleans had a soft market which impacted results of the Windsor Court.

Owned Southern Africa hotels.  EBITDA for the quarter was $1.9 million vs. $1.3 million while EBITDA for the year was $4.3 million vs. $3.2 million.  Both the Mount Nelson in Cape Town and the Westcliff in Johannesburg showed marked improvement while Orient-Express Safaris in Botswana were down due to less arrivals from the U.S.

Owned South American hotels.  EBITDA for the quarter was $1.3 million vs.  $2.1 million and for the year was $7.1 million vs. $8.3 million.  The reduction was due to devaluation of the Brazilian Real and a large part of the Copacabana Palace Hotel's room stock being off line for refurbishment.  The Brazilian elections depressed business travel.

Owned South Pacific hotels.  EBITDA for the quarter was $0.3 million vs.  $0.4 million and for the year was $1.3 million vs. $3.3 million.  Forest fires in Sydney and major refurbishment at Lilianfels in the Blue Mountains west of Sydney caused a significant decline in results.

Management and part ownership interests.  EBITDA for the quarter was $3.5 million vs. $2.8 million and for the year was $12.4 million vs. $10.9 million.  Charleston Place largely accounted for the improvement.

Restaurants.  EBITDA for the quarter was $2.1 million vs. $1.9 million and for the year was $3.8 million vs. $4 million.  The small decline was due to the company's 50% interest in the Petit Blanc 4 restaurant chain in the U.K.  which was only acquired in early 2002.  Steps have been taken to turn this business around in the current year.

Tourist trains and river cruising.  EBITDA for the quarter was $2.9 million vs. $1.4 million and for the year was $8.3 million vs. $7.3 million.  The Venice Simplon-Orient-Express accounted for the increase.

Simon Sherwood concluded his remarks by saying that the company's recent investments in its properties should permit significant profitability increase when combined with savings such as lower insurance costs.  The company has budgeted higher profits in 2003 over 2002 but he said Iraq and terrorist fears were unpredictable factors which could alter results.
 

                          ORIENT-EXPRESS HOTELS LTD
                     Three Months ended December 31, 2002
                         SUMMARY OF OPERATING RESULTS

                                                         Three months ended
                                                            December 31
    $'000                                                2002           2001
    Revenue
    Owned hotels
    - Europe                                           18,954         12,071
    - North America                                    15,873         14,111
    - Rest of World                                    15,328         13,835 
Hotel management & part ownership
interests                                               3,531          2,829 
    Restaurants                                         6,390          6,045
    Trains & Cruises                                   13,374          9,905
    Total revenue                                      73,450         58,796

    Operating Profits
    Owned hotels
    - Europe                                            1,724            967
    - North America                                     2,372          3,043
    - Rest of World                                     3,503          3,829 
Hotel management & part ownership
interests                                                3,525          2,829 
    Restaurants                                         2,142          1,929
    Trains & Cruises                                    2,845          1,421
    Central overheads                                  (2,452)        (2,120)
    EBITDA                                             13,659         11,898
    Depreciation & Amortization                        (5,191)        (4,115)
    Interest                                           (3,669)        (4,015)
    Earnings before Tax                                 4,799          3,768
    Tax                                                  (622)          (726)
    Net earnings on common shares                       4,177          3,042

    Earnings per common share                            0.14           0.10

    Number of shares - millions                         30.80          30.80
 
 

ORIENT-EXPRESS HOTELS LTD
                     Three Months Ended December 31, 2002
              SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                                     Three months ended
                                        December 31
                                   2002           2001 
Average Daily Rate (in dollars)
         Europe                    359              264
         North America             324              304
         Rest of World             195              185
         Worldwide                 276              241

    Rooms Sold (thousands)
         Europe                     29               28
         North America              30               29
         Rest of World              47               44
         Worldwide                 106              101

    RevPar (in dollars)
         Europe                    182              152
         North America             210              209
         Rest of World             103               97
         Worldwide                 152              140
 

                                                                   Change %
    Same Store RevPAR                                         Dollar     Local
    (in dollars)                                                      Currency
         Europe                    170              152        12%        -5%
         North America             205              209        -2%        -2%
         Rest of World             105               97         8%         5%
         Worldwide                 148              140         6%         0%
 
 

                          ORIENT-EXPRESS HOTELS LTD
                    Twelve Months ended December 31, 2002
                         SUMMARY OF OPERATING RESULTS
 

                                                        Twelve months ended
                                                            December 31
    $'000                                                2002           2001
    Revenue
    Owned hotels
    - Europe                                           99,939         79,841
    - North America                                    58,801         59,240
    - Rest of World                                    54,725         52,655 
Hotel management & part ownership interests  12,414         10,893 
    Restaurants                                        18,115         17,833
    Trains & Cruises                                   45,308         40,886
    Total revenue                                     289,302        261,348

    Operating Profits
    Owned hotels
    - Europe                                           29,170         26,885
    - North America                                    11,149         14,594
    - Rest of World                                    12,696         14,866 
Hotel management & part ownership
interests                                               12,408         10,893 
    Restaurants                                         3,779          4,005
    Trains & Cruises                                    8,348          7,326
    Central overheads                                 (10,509)        (9,475)
    EBITDA                                             67,041         69,094
    Depreciation & Amortization                       (19,546)       (16,356)
    Interest                                          (18,351)       (18,658)
    Earnings before Tax                                29,144         34,080
    Tax                                                (3,850)        (4,230)
    Net earnings on common shares                      25,294         29,850

    Earnings per common share                            0.82           0.97

    Number of shares - millions                         30.80          30.90
 

                          ORIENT-EXPRESS HOTELS LTD
                    Twelve Months Ended December 31, 2002
              SUMMARY OF OPERATING INFORMATION FOR OWNED HOTELS

                              Twelve months ended
                                  December 31
                              2002             2001 
Average Daily Rate (in dollars)
         Europe                376              337
         North America         314              314
         Rest of World         186              192
         Worldwide             286              276

    Rooms Sold (thousands)
         Europe                157              153
         North America         118              121
         Rest of World         176              164
         Worldwide             451              438

    RevPar (in dollars)
         Europe                242              239
         North America         206              217
         Rest of World          96              102
         Worldwide             168              173
 

                                                                Change %
    Same Store RevPAR                                      Dollars     Local
    (in dollars)                                                     Currency
         Europe                234              236          -1%       -6%
         North America         207              218          -5%       -5%
         Rest of World          96               98          -3%        0%
         Worldwide             166              170          -2%       -4%
 
 
 

                          ORIENT-EXPRESS HOTELS LTD
                  CONSOLIDATED AND CONDENSED BALANCE SHEETS

                                                    December 31   December 31
    $'000                                                 2002         2001
 

    Assets
    Cash                                                37,860        57,863
    Accounts receivable                                 55,324        45,420
    Inventories                                         22,838        17,463
    Total current assets                               116,022       120,746

    Real estate and other fixed assets, net            757,402       598,080
    book value
    Investments                                         85,159        79,430
    Intangible assets                                   29,529        29,529
    Other assets                                        10,420         8,466
                                                       998,532       836,251
 

    Liabilities and Shareholders' Equity
    Working capital facilities                          23,800         7,038
    Accounts payable                                    20,271        19,526
    Accrued liabilities                                 46,831        38,594
    Deferred revenue                                    15,107        10,513
    Current portion of long-term debt and               37,243        55,695
    capital leases
    Total current liabilities                          143,252       131,366

    Long-term debt and obligations under               421,773       307,176
    capital leases
    Deferred income taxes                                3,330         3,875
    Minority interest                                    3,695         1,247

    Shareholders' equity                               426,482       392,587
                                                       998,532       836,251
 

This news release contains, in addition to historical information, forward looking statements that involve risks and uncertainties.  These include statements regarding earnings growth, investment plans and similar matters that are not historical facts. 

Contact:


Orient-Express Hotels Ltd.
http://www.orient-express.com


Also See Orient-Express Hotels Reports Net Income of $11.6 million for 2nd Qtr Compared with $14.4 million Last Year Same Quarter / Aug 2002
Orient-Express Hotels Acquires 75% in the Maroma Resort and Spa On Mexico's Yucatan Peninsula /
March 2002

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