Orient-Express Hotels Reports $14.6 Million Quarterly Loss

Orient-Express Hotels Ltd., owners or part-owners and managers of 51 luxury hotels, restaurants, tourist trains and river cruise properties operating in 25 countries, announced its results for the first quarter ended March 31, 2009.

The net loss for the period was $14.6 million, or $0.29 per common share, on revenue of $91 million, compared with a net loss of $4.3 million, or $0.10 per common share, on revenue of $119.9 million in the first quarter of 2008.

The net loss from continuing operations for the period was $13.6 million, or $0.27 per common share, compared with a net loss of $2.4 million, or $0.06 per common share, in the first quarter of 2008.

The first quarter is traditionally a loss-making period for the company because several of its European hotels are closed for most of the quarter and the Venice Simplon-Orient-Express and Royal Scotsman tourist trains and Afloat in France canal cruises do not operate.

The adjusted net loss from continuing operations for the period was $1.4 million, or $0.03 per common share, compared with an adjusted net loss of $3.7 million, or $0.09 per common share, in the first quarter of 2008.

Revenue, excluding real estate revenue, was $91 million in the first quarter of 2009, down $24.9 million from the first quarter of 2008. This reflected an owned hotels same store RevPAR decline of 18 percent in local currency (26 percent in U.S. dollars).

Adjusted EBITDA before real estate was $9.9 million, down $7 million on the prior year quarter. Revenue from owned hotels for the first quarter was $80.2 million, including $11.5 million from Charleston Place. On a same store basis, revenue from owned hotels declined by 25 percent year over year.

The company’s financing agreements with several commercial bank lenders contain financial covenants which among other things, require it to satisfy a quarter-end minimum debt service coverage ratio and minimum net worth amounts.

Orient-Express Hotels has begun implementation of a brand enhancement strategy which the company expects will increase the visibility of the Orient-Express brand globally throughout its business segments and product offerings. This initiative, achieved at minimal cost, is intended to position the company as a collection of deluxe travel and hospitality experiences, each of which would be individually branded and focused on authentic local product and service.

Management anticipates that its new brand strategy will provide Orient-Express Hotels with public relations and commercial advantages; will increase efficiencies and the effectiveness of the portfolio; drive revenue and repeat business; and be attractive to property owners and potential partners.