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Orient-Express Hotels to Acquire Luxury Canal and
River Cruise Company "Afloat in France"


HAMILTON, Bermuda, May 25, 2004 - Orient-Express Hotels Ltd. (NYSE: OEH), investors in 44 luxury leisure properties worldwide of which 39 are managed by the company, today announced it had entered into an agreement with the owners of "Afloat in France" to acquire their business on a part cash, part earn-out basis.

Afloat in France owns the five most luxurious canal barges in France which regularly cruise the canals of Burgundy and Provence during the tourist season. The barges can accommodate between 6 and 12 passengers each and several have their own swimming pools on board.

Americans are the primary guests on board France's canal tourist barges. This market has suffered a drop due to the French government's position over the Iraq War and the strength of the Euro against the U.S. dollar, making trips to Europe more expensive in dollar terms. As a result, "Afloat in France" has recently been unprofitable and is unlikely to move back into profit before next year. Nonetheless, the high quality of the cruising experience remains unchanged and Orient-Express Hotels feels it should acquire the business and its assets now to be in a position to benefit from the market recovery. The acquisition has been structured as a 50% down payment of $3 million and a subsequent payment based on a multiple of 7x 50% of the company's EBITDA in three to five years' time.

The company may use the "Afloat in France" acquisition as the core of a larger investment in this sector of the cruising business. Orient-Express Hotels' tourist train and cruise division today embraces the famed Venice Simplon-Orient-Express train in Europe, two day trains in Britain, the Eastern & Oriental Express which operates between Singapore and Bangkok, tourist trains in Peru and the river cruise ship Road to Mandalay in Burma. This division accounts for about 20% of the revenue of the company.

The itineraries of "Afloat in France" are tailor made to reach into the heart of rural France. Burgundy, Provence, the Rhone Valley and Languedoc-Roussillion all feature extensively, usually with a week long cruise on a fully inclusive basis. Three and six night cruises can be combined with an optional stay in Orient-Express Hotels' Hotel de la Cite in Carcassonne on the Canal du Midi. Guests are met off their arriving flights in Paris and are personally escorted to the vessels and back again to their Paris hotels at the end of every cruise. Every day features a side trip to a famous landmark or restaurant. Guests can bicycle along the tow paths if they wish. It is an experience of serenity and scenery combined with delicious French cuisine.

Orient Express Hotels Ltd.
Also See: Orient-Express Hotels Ltd. Reports $23.6 million Net Earnings for the Year 2003; RevPAR Up 9% to $183 from $168 / Hotel Operating Statistics / March 2004
Orient-Express Hotels Ltd. and Omega Capital Acquire One of Madridís Leading Hotels, The Ritz, for US$135 million / April 2003

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