HAMILTON, Bermuda, February 25 /PRNewswire-FirstCall/ --
    Fourth Quarter Earnings Summary
    - Local Currency same store RevPAR down 16%
    - Total revenue, before real estate, was $107.8 million, down 26% on
      prior year
    - Net loss from continuing operations was $43.5 million or $0.94 per
      common share
    - Non-recurring charges were $44.1 million or $0.95 per common share
    - Adjusted net earnings from continuing operations were $0.6
      million or $0.01 per common share
    - Adjusted EBITDA from continuing operations was $11.1 million
    Key events
    - Won UK High Court action to protect 'Cipriani' trade mark
    - Raised $52.5 million through a registered direct offering of class A
      common shares in November 2008 to enhance liquidity
    - Previously announced cost saving program including capital expenditure
      reduction and project deferrals fully implemented
    - Studying impact of deferral of New York hotel project

Orient-Express Hotels Ltd. (NYSE: OEH, http://www.orient-express.com), owners or part-owners and managers of 51 luxury hotels, restaurants, tourist trains and river cruise properties operating in 25 countries, today announced its results for the fourth quarter and full year ended December 31, 2008.

For the fourth quarter, the Company reported a net loss of $48.0 million (loss of $1.04 per common share) on revenue of $81.7 million, compared with a net loss of $4.9 million (loss of $0.12 per common share) on revenue of $151.2 million in the fourth quarter of 2007. The net loss from continuing operations for the period was $43.5 million (loss of $0.94 per common share), compared with net earnings of $10.2 million ($0.24 per common share) in the fourth quarter of 2007. The adjusted net earnings from continuing operations for the period was $0.6 million ($0.01 per common share), compared with adjusted net earnings of $8.8 million ($0.21 per common share) in the fourth quarter of 2007.

For the year ended December 31, 2008, the Company reported a net loss of $26.6 million (loss of $0.61 per common share) on revenue of $574.4 million, compared with net earnings of $33.6 million ($0.79 per common share) on revenue of $599.6 million in 2007. The net loss from continuing operations for the year was $6.6 million (loss of $0.15 per common share), compared with net earnings of $50.3 million ($1.19 per common share) in 2007. The adjusted net earnings from continuing operations for the year was $37.3 million ($0.86 per common share), compared with adjusted net earnings of $48.3 million ($1.14 per common share) in 2007.

Paul White, President and Chief Executive Officer, said, 'Fourth quarter results clearly reflect the impact of the global economic downturn on our industry and our business. We will therefore continue to take prudent action, focusing on diligent cost control measures to preserve cash while maintaining Orient-Express Hotels' high level of customer service. In the quarter the drop in revenue before Real Estate of $38.4 million was offset by fixed and variable cost savings of $19.6 million, leading to an adjusted operating EBITDA reduction, before Real Estate, of $18.8 million or 49% of the fall in revenue. All but essential capital expenditure and development projects have been deferred or cancelled. Furthermore, we have no significant near term debt maturities and ended 2008 with cash and available funds of $116.4 million. Our global outreach, and ownership of some of the finest travel assets around the world, will allow us to navigate near term challenges while positioning us to benefit when the market recovers.'

The results for the fourth quarter include a non-cash impairment charge of $32.7 million. This includes a write-down of $23.0 million relating to the Company's investment in Hotel Ritz, Madrid, which is 50% owned and managed by the Company. There were additional goodwill impairment charges of $9.7 million on five other assets.

Revenue and EBITDA including Real Estate were negatively impacted during the fourth quarter by $26.9 million and $5.2 million, respectively, due to a change in the Company's application of accounting policy relating to the project at Porto Cupecoy.

Excluding Real Estate, revenue was down 26% over the fourth quarter of 2007 reflecting a fall in Owned Hotels same store RevPAR of 16% in local currency (29% in U.S. dollars) and a 36% fall in dollar revenues from Trains and Cruises.

Revenue from Owned Hotels for the fourth quarter was $80.1 million, down 26% over the same period in 2007. Revenue fell by 42% in Europe, 6% in North America, and 19% in Rest of World, reflecting the sudden and dramatic global downturn at the end of the year and the marked depreciation of the Euro. Restaurants revenue was down by 17% year-over-year.

EBITDA before Real Estate and impairment write downs for the fourth quarter was $5.6 million compared to $29.0 million in the prior year. The principal variances from last year included the result from Grand Hotel Europe (down $2.5 million), the Italian hotels (down $3.6 million), Trains and Cruises (down $3.4 million) and a $5.6 million increase in central costs, which included restructuring charges, costs relating to abandoned projects and the special shareholders' meeting.

Business Highlights

During the fourth quarter the Company fully implemented its previously announced cost reduction program while maintaining the high level of guest services, which are the hallmark of Orient-Express Hotels. This will result in annual savings of $20 million.

The global financial crisis, including the problems in the credit and real estate markets, have made it impossible to obtain suitable financing and/or partners for the New York hotel project at this time. The Company has therefore advised the New York Public Library that it has determined not to exercise its right to further extend the closing date of the purchase of the land on which its planned hotel would be built and that it would not be in a position to close the transaction as provided in the Purchase and Sale Agreement. Orient-Express Hotels has proposed to enter into discussions with the Library to further defer or restructure the project.

Capital expenditure in the Company's hotels has also been minimized and will cover only health, safety and other essential or legally committed expenditure. The Company has made substantial investment in its portfolio over the last several years, and the assets are in excellent condition and can withstand a pause in capital investment.

After a thorough evaluation of the Porto Cupecoy project, the Company has decided to complete this development and is executing a strategy to make the project cash neutral in 2009 and cash generative from 2010. An international project management firm has been hired to oversee completion of the construction process, further ensuring that Porto Cupecoy stays on track for completion in 2009.

As reported in the last quarter, all new development projects have been cancelled and the Company's rebuilding of El Encanto has been postponed until credit availability improves.

In carrying out the Company's commitment to protecting its valuable brands, Hotel Cipriani has been successful in an action in the High Court in London for trade mark infringement and passing off in respect of the mark 'Cipriani' for restaurant services, against the operators of the restaurant Cipriani London. As a result, subject to an appeal which the defendants have lodged, Hotel Cipriani is entitled to an injunction preventing the defendants from carrying on a restaurant business in the UK using the names 'Cipriani' and 'Cipriani London' and is seeking damages and costs.

Regional Performance

In the quarter overall, worldwide same store RevPAR declined by 16% in local currency (29% in U.S. dollars). Same store RevPAR for the fourth quarter for Europe fell by 31% in local currency (45% in U.S. dollars), in North America it fell 12% and Rest of World increased by 1% in local currency (fell by 21% in U.S. dollars).

Europe:

For the fourth quarter, revenue was down 42% from $43.7 million in 2007 to $25.1 million in 2008. After a $9.6 million or 25% reduction in operating costs, EBITDA decreased from $4.6 million in the fourth quarter of 2007 to a loss of $4.4 million in 2008. EBITDA from the Italian properties fell by $3.6 million to a loss of $5.3 million and included restructuring charges of $0.8 million. Hôtel de la Cité in Carcassonne, France had a $0.9 million fall in EBITDA, but the prior year result included a gain from the sale of assets of $0.9 million. Grand Hotel Europe, St Petersburg, Russia had a fall in EBITDA year-over-year from $3.5 million to $1.0 million reflecting reduced spending in a country that has been particularly hard hit by the economic downturn.

North America:

Revenue for the fourth quarter was down 6% from $22.4 million in 2007 to $21.0 million in 2008. EBITDA decreased by $1.8 million year-over-year to $1.1 million in the fourth quarter. The Windsor Court, New Orleans, was particularly impacted by a slowdown in corporate and conference business and contributed EBITDA of $0.6 million, a fall of $0.6 million over the prior year. Keswick Hall and Club was impacted by staff restructuring costs and a 9% fall in revenue, and contributed an EBITDA loss of $0.6 million, a fall of $0.6 million over the prior year.

Southern Africa:

Revenue in Southern Africa fell by 24% year-over-year, from $13.3 million to $10.1 million. This was all attributable to the depreciation of the South African rand versus the U.S. dollar. EBITDA fell by $0.9 million to $4.1 million.

South America:

Revenue at the South American properties fell year-over-year by 15% in the fourth quarter from $17.3 million to $14.7 million. EBITDA fell from $4.3 million to $4.1 million. Hotel das Cataratas is continuing its refurbishment program and recorded an EBITDA loss of $0.6 million, compared to a loss of $0.3 million in the prior year.

Asia Pacific:

Revenue for the fourth quarter was down 20% from $11.3 million in 2007 to $9.1 million in 2008. EBITDA fell by $1.0 million to $1.5 million. The Australian properties were particularly impacted by the economic downturn, with revenue down 10% in local currency, but the depreciation of the Australian dollar against the U.S. dollar resulted in revenue being 36% down in U.S. dollars. The Asian hotels were more insulated and generated a 4% increase in revenue. The fall in EBITDA was wholly attributable to the Australian properties.

Hotel management and part-ownership interests:

Fourth quarter EBITDA was $5.7 million compared with $6.4 million in 2007. Hotel Ritz, Madrid was particularly impacted by a sharp deterioration in the Spanish economy.

Restaurants:

EBITDA was $1.7 million compared with $2.6 million in the same quarter last year. The '21' Club served 10% fewer covers in its restaurant and private dining was down 22%. The average check fell by 4%.

Trains and Cruises:

Revenue was $15.2 million, a fall of 36% year-over-year, and EBITDA was $2.7 million, a fall of $3.4 million.