Mr. James B. Sherwood, Chairman, said that the decline in revenue and hence net income had been primarily due to the lingering effects of the September 11th terrorist attacks in the U.S. He indicated that same store RevPAR in the first quarter was down 12% compared with the prior year period, while in the fourth quarter of 2001 it was down 17% compared with the fourth quarter of 2000.

Mr. Sherwood said that Orient-Express Hotels' first quarter is the seasonal low earnings period for the year. He said that results were 3 cents per share ahead of "Street consensus" and reflected the resilience of the company in the face of unexpected adversity such as September 11th.

He said that recent devaluations of the South African Rand and Brazilian Real had also reduced first quarter profits when translated into U.S. dollars, despite improved occupancies over the year earlier period. Local currency rates are being increased in South Africa and Brazil to ensure profits on translation are maintained at pre-devaluation levels, however, there is a lag effect because of booking commitments in local currencies made prior to the devaluations.

Mr. Sherwood summarized the results as follows:

Owned European hotels
EBITDA was a loss of $0.5 million compared with a loss of $0.1 million in the first quarter of 2001. Mr. Sherwood noted that the Euro has been gaining in value since the end of the first quarter, which will increase U.S. dollar profits on translation from local currencies as the hotels enter their main earnings period of the year.

Owned North American hotels
EBITDA was $5.5 million in the period, down $1.8 million from the first quarter of 2001. The Inn at Perry Cabin was closed for the entire period for a major rebuild, accounting for about $0.3 million of the decline. La Samanna was badly affected by September 11th, accounting for $1 million of the decline.

Owned Southern Africa hotels
EBITDA was $1.7 million, the same as the prior year period. Despite improved occupancy and local currency revenue, the decline of the value of the South African Rand again held back earnings improvement in U.S. dollar terms.

Owned South American hotels
EBITDA was $3.1 million compared with $3.5 million in the year earlier period. The decline in the value of the Brazilian Real was responsible for the lower earnings in U.S. dollar terms.

Owned South Pacific hotels
EBITDA was a loss of $0.2 million, compared with a profit of $1 million in the year earlier period. The Bora Bora Lagoon Resort was closed during the first quarter of 2002 for renovation while travel to Australia was impacted by September 11th. 
    
Management and part ownership interests
EBITDA was $2.5 million, unchanged from the prior year period.

Restaurants
EBITDA was $1 million, unchanged from the prior year. '21' Club has made a good recovery from September 11th.

Tourist trains and river cruise ship
EBITDA was a loss of $0.7 million compared with a profit of $0.1 million in the prior year period. The Road to Mandalay in Burma was badly affected by cancellations following September 11th. Bookings for this division have recovered for the balance of the year and indeed in the case of the three European trains, are ahead of 2001 at this time.

Mr. Simon M.C. Sherwood, President, highlighted that the company had decided to take the Inn at Perry Cabin, Bora Bora Lagoon Resort, the Villa San Michele and the main building of the Hotel Cipriani off line in the first quarter for capital improvement as part of the company's $30 million spend this year. While this reduced first quarter earnings it is management's view that in light of September 11th this was the least costly way to complete the work, affording greater earnings growth later in the year.
He indicated that same store RevPAR in the quarter was $154, compared with $175 achieved in the first quarter of 2001. He said that leisure traveler demand seems to have recovered for the company's properties but business traveler demand was still weaker than normal, not helped by poor performance in the media, telecoms and internet industries, let alone Enron.

Simon Sherwood said that four excellent acquisitions had been completed in the first quarter: La Residencia in Mallorca, Spain (63 keys), Le Manoir aux Quat' Saisons in Oxfordshire, England (32 keys), Maroma Resort & Spa on Mexico's Yucatan coast south of Cancun (57 keys) and the four brasserie chain Le Petit Blanc in Oxford, Cheltenham, Birmingham and Manchester, England (600 covers) serving reasonably priced high quality French cuisine to the younger market. In the case of Maroma 75% of the owning company was acquired while in the case of Petit Blanc 50% was acquired. The total investment was $47.5 million. He indicated that all these acquisitions should add to profits from the second quarter this year. Further acquisitions are currently in the offer stage.

Commenting on the outlook for the year, he said "assuming there is not another disruption to international travel, all hotel companies will have excellent third and fourth quarter results when compared with last year. We will also have the benefit of our capital expenditure this past winter, rate adjustment in countries where currencies have devalued against the dollar, a possible stronger Euro and the earnings from our four acquisitions early in 2002. Against this must be set a possible reduction in Americans travelling abroad due to security concerns and the weaker business traveller environment. On balance, however, we believe 2002 will be a satisfactory year for the company."
 

This press 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.