• Hong Kong recovery gathering momentum
• Integration of The Rafael Group successfully completed
• London hotel reopened and new Miami hotel launched

�2000 has been a significant year of development for Mandarin Oriental during which we made considerable progress towards our vision of being recognised as one of the top global luxury hotel groups.� - Simon Keswick, Chairman

�Our results in 2001 will benefit from the full year�s contribution of the restored London flagship hotel, the enlarged portfolio from the Rafael acquisition and the continued recovery in Hong Kong.� - Edouard Ettedgui, Chief Executive Officer

The final dividend of US¢0.85 per share will be payable on 24th May 2001, subject to approval at the Annual General Meeting to be held on 16th May 2001, to shareholders on the register of members at the close of business on 23rd March 2001. The ex-dividend date will be on 21st March 2001, and the share registers will be closed from 26th to 30th March 2001, inclusive.

OVERVIEW
Mandarin Oriental International Limited today announced that 2000 has been a significant year of development for the Group during which it made considerable progress towards its vision of being recognised as one of the top global luxury hotel groups. The number of hotels operated by the Group grew from 12 to 20, including the New York hotel currently under development, through the successful acquisition and integration of The Rafael Group and the launch of a new hotel in Miami. Mandarin Oriental Hyde Park in London was reopened in late May as one of London�s most luxurious hotels following the completion of an extensive renovation programme.

PERFORMANCE
The consolidated profit before interest and tax for the year ended 31st December 2000 was US$53 million, an increase of US$11 million from 1999 including the writeback of a provision of US$4 million on the Singapore hotel previously recorded in the profit and loss account. The increase in consolidated profit before interest and tax includes the contribution of The Rafael Group hotels from late May onwards following the completion of the acquisition. However, as a result of higher financing charges, including interest on the US$76 million convertible bonds issued in March 2000, the consolidated profit after tax and minority interests was US$18 million compared with US$17 million in the previous year.  Earnings per share were US¢2.21 (1999: US¢2.39).
A Directors� review of the valuation of the Group�s hotel properties at the end of 2000, in consultation with its independent valuers, has indicated that the significant decrease in values recorded in 1998 continues to reverse. In addition to the writeback in relation to the Singapore hotel, valuation increases of US$101 million principally on the Group�s two Hong Kong properties have been reflected in the balance sheet.
The Directors recommend a final dividend of US¢0.85 per share. This, together with the interim dividend of US¢0.50 per share, will make a total annual dividend of US¢1.35 per share, unchanged from 1999.

DEVELOPMENTS
Turning to the Group�s developments, the Chairman, Simon Keswick, said that Mandarin Oriental acquired The Rafael Group, an operator of six distinctive luxury hotels in May 2000.  The consideration for the acquisition was US$143 million which was financed out of proceeds from a Rights Issue in early 2000 of approximately US$150 million.  In September, the Group signed an exclusive joint venture agreement with Indian Hotels and Health Resorts, to manage and develop luxury hotels throughout India. The first property to open under this joint venture is Mandarin Oriental Ananda, The Himalayas.  Mandarin Oriental, Miami, in which the Group has a 25% interest and a long-term management contract, opened in late November and work is progressing on Mandarin Oriental, New York, scheduled to open in late 2003.
The Group�s strategy remains focussed on positioning Mandarin Oriental as one of the world�s leading luxury hotel brands with a growing presence in key international destinations. The objective is to increase the number of rooms under operation to 10,000 from the current 7,000 and a number of opportunities are being pursued.

OUTLOOK
In conclusion, Simon Keswick said, �The necessary elements for the long-term success of the Group�s expansion strategy are now firmly in place with the integration of the Rafael hotels complete and the London and Miami properties now opened. The Group is well-positioned for 2001 and should benefit from both the expected continuing recovery in room rates of the two Hong Kong hotels and a full year contribution from the London property.� The Directors recommend a final dividend of US¢0.85 per share. This, together with the interim dividend of US¢0.50 per share, will make a total annual dividend of US¢1.35 per share, unchanged from 1999.

OVERVIEW
The year 2000 has been an important one for the Group with our growth strategy having gained momentum. Our results benefited from an improved second half performance, buoyed by the continued recovery in Hong Kong and the contribution of the new hotels in the Group. We have increased our portfolio to 20 hotels worldwide through the acquisition of The Rafael Group in May, the opening of a new luxury property in Miami in November, and the continued development of our new, luxury hotel in New York. Other important events during the year include the relaunch of our London property in May, which has met with critical acclaim; the completion of the first phase of a significant renovation at the legendary Oriental, Bangkok which is celebrating its 125th anniversary in 2001; the signing of a joint venture agreement to develop luxury hotels in India; and, to support our growth strategy, we launched a well-recognised international advertising campaign designed to raise awareness of our luxury brand around the world.

THE WAY FORWARD
Progress has been made in achieving our strategic objectives, which are aligned with our vision. By focusing on these objectives, we will build for the future and improve our profitability, while maintaining our commitment to excellence.

We will:

• Improve our competitive position in each market
• Establish Mandarin Oriental Hyde Park as London�s best hotel
• Increase the number of rooms under operation to 10,000
• Strengthen our corporate core competencies
• Ensure a strong cash flow and balance sheet

1.  Improve our competitive position in each market
Across the Group, most of our hotels have maintained or enhanced their leadership positions in their respective markets, with significantly improved performances in some cities, particularly Hong Kong. Each hotel is benchmarked against a targeted control group of local competitors with comparative performance measurements in place for guest services and financial returns. I would now like to review some of the highlights from each region.

Asia
Encouraging performances at the two Hong Kong hotels were led by Mandarin Oriental, Hong Kong, which increased its occupancy to 77% in 2000 from 65% in 1999, and also achieved an overall improvement in competitive position. Occupancy at The Excelsior also rose, reaching 87% in 2000 compared to 84% in 1999. While average room rates at both hotels improved, particularly in the second half, they still remained well below the levels achieved before the onset of the Asian economic downturn.
The performance of the Singapore hotel improved over the previous year, with a 9% increase in revenue. While the Macau property also enjoyed a 22% increase in revenue, gains recognised in 1999 on the disposal of fixed assets resulted in this year�s contribution to the Group remaining the same as last year. In both Manila and Jakarta, our properties were affected by weaker currencies and continuing economic and political uncertainty.

In Bangkok, The Oriental performed very well, increasing room revenue by 7% in local currency terms, while at the same time undergoing a self-financed US$30 million renovation programme. However the depreciation of the Thai Baht meant that The Oriental�s contribution to the Group was slightly down in US dollar terms. Phase I of the renovation programme was completed in September 2000 with Phase II scheduled to take place between May 2001 and September 2001.

In Kuala Lumpur, the hotel entered its second full year of operation and has established itself as the firm market leader. However, market conditions in Kuala Lumpur, particularly an oversupply of luxury hotel rooms, resulted in depressed average room rates.

Europe
Upon re-opening in May, Mandarin Oriental Hyde Park, London is quickly establishing itself within the top tier of luxury hotels in London.  Through the acquisition of The Rafael Group, we have two additional properties in Europe. Mandarin Oriental, Munich continues to be the market leader in that city, with total revenue up 6% in local currency terms over 1999. In Geneva, Mandarin Oriental Hotel du Rhône met expectations and continues to be recognised as one of the city�s finest hotels. However the relative strength of the US dollar affected negatively the results of both these hotels when converting from local currency.

The Americas
The Group continues to increase its presence in this important market, and our existing properties enjoyed improved performances in 2000. Kahala Mandarin Oriental, Hawaii significantly increased its occupancy rates to 71%, up from 62% in 1999. This was accompanied by a 4% increase in average room rates, contributing to a 19% increase in revenue overall. Kahala Mandarin Oriental was also awarded the American Automobile Association�s Five Diamond Award for the third year in a row. 

Mandarin Oriental, San Francisco increased both its average room rate and occupancy, which helped to achieve a 15% increase in revenue over 1999, and was rewarded with the Mobil Five Star Award for the second consecutive year. Our new properties in The Americas that have joined from the Rafael Group, have also performed well since the acquisition. The Mark, New York achieved a 7% increase in the average room rate while increasing occupancy to 79%. Turnberry Isle, Florida and Elbow Beach, Bermuda both improved their performances with increased revenue of 12% and 11% respectively.

While focusing on improving their competitive positions, each hotel has also ensured their reputation for excellence remains undiminished. At the same time we have continued to invest in our hotels to ensure that they remain within the top-performing hotels in their destination.

As a consequence, the outstanding service and facilities that our hotels provide have resulted in our properties receiving a record-breaking number of prestigious awards in 2000, from the world�s most respected publications and associations.

Europe
Upon re-opening in May, Mandarin Oriental Hyde Park, London is quickly establishing itself within the top tier of luxury hotels in London.  Through the acquisition of The Rafael Group, we have two additional properties in Europe. Mandarin Oriental, Munich continues to be the market leader in that city, with total revenue up 6% in local currency terms over 1999. In Geneva, Mandarin Oriental Hotel du Rhône met expectations and continues to be recognised as one of the city�s finest hotels. However the relative strength of the US dollar affected negatively the results of both these hotels when converting from local currency.

2.Establish Mandarin Oriental Hyde Park as London�s best hotel 
In London, the closure of the hotel in the first five months had a negative impact of US$6 million on the Group�s performance. In addition, the renovation programme was more extensive than originally anticipated due to the complex restoration of this heritage building. We also identified opportunities to increase the number of revenue-producing areas, including two restaurants instead of one.

Since re-opening its doors in May and launching a luxurious spa in November, Mandarin Oriental Hyde Park has received impressive reviews, particularly for the new facilities and has achieved a significantly higher average rate.  With the total restoration now complete, the hotel has begun to make a positive operating contribution in the second half of the year, and we are expecting the full profit impact of the new facilities to benefit the hotel�s performance in 2001.

3.  Increase the number of rooms under operation to 10,000
Success in extending our brand to 10,000 rooms in key international cities remains a critical factor in our overall strategy. The acquisition of The Rafael Group in May, followed by the smooth integration of these new hotels into our existing Group, has moved us closer to our objective by increasing our portfolio to 7,000 rooms worldwide. This has also created a more balanced geographic mix of properties across three continents. Greater visibility in key cities in North America and Europe adds value to our prestigious Asian base as well as resulting in attractive financial returns.
We continue to seek opportunities to leverage the strength of our brand by negotiating more management contracts with limited equity ownership, that offer higher returns than our traditional reliance on income generated by owned hotels.  In September, Mandarin Oriental entered into an exclusive joint venture agreement with Indian Hotels and Health Resorts to manage and develop luxury hotels in India.  Mandarin Oriental Ananda, The Himalayas, a unique resort and destination spa with 75 luxurious rooms and suites, is the first property to open under this joint venture.  Mandarin Oriental, Miami, which is 25% owned, opened to considerable acclaim in November 2000, and is set to become the market leader in this dynamic city.  In New York, ground breaking has commenced on an exciting mixed-use development in the heart of Manhattan, in which we have taken a 50% stake in the development of the 250-room Mandarin Oriental, New York, the hotel section of the project. With experienced partners and prestigious neighbours, the development is set to become an icon in the city.

Our financial position remains strong as a result of the US$150 million raised in the Rights Issue in March. Following the upswing in the Asian property market, we have reviewed the values of the Group�s hotel properties at the year end resulting in an uplift in value of US$101 million principally in relation to the two Hong Kong hotels.  In addition, we have written back the provision of approximately US$4 million on the Singapore property, previously recorded in the profit and loss account. The financial position of the Group continues to be strong and at 31st December 2000 the Group�s gearing (or net debt over shareholder�s funds) was 34% with liquid cash resources of US$100 million.

In conclusion, our results in 2001 will benefit from the full year�s contribution of the restored London flagship hotel, the enlarged portfolio from the Rafael acquisition and the continued recovery in Hong Kong. Our vision to be recognised as one of the top global luxury hotel brands has progressed following the growth of our portfolio to 7,000 rooms around the world.  We will continue to focus on improving profitability while maintaining our commitment to excellence. The Group is in a strong position to continue on our growth path and fully leverage our global brand.

Edouard Ettedgui
Chief Executive Officer
26th February 2001