1115836--3/6/2006--ORIENT_EXPRESS_HOTELS

related topics

{competitive, industry, competition}

{stock, price, share}

{loss, insurance, financial}

{acquisition, growth, future}

{loan, real, estate}

{operation, natural, condition}

{cost, operation, labor}

{regulation, change, law}

{provision, law, control}

{interest, director, officer}

{stock, price, operating}

{operation, international, foreign}

OEH s operations are subject to adverse factors generally encountered in the hospitality industry. The hospitality industry is highly competitive, both for acquisitions of new hotels and restaurants and for customers at OEH s properties. The hospitality industry is heavily regulated, including with respect to food and beverage sales, employee relations, construction and environmental concerns, and compliance with these laws could reduce revenues and profits of properties owned or managed by OEH. OEH s acquisition, expansion and development strategy may be less successful than expected and, therefore, its growth may be limited. OEH may be unable to obtain the necessary additional capital to finance the growth of its business. Currency fluctuations may have a material adverse effect on OEH s financial statements and/or its operating margins. OEH s operations may be adversely affected by extreme weather conditions and the impact of natural disasters. If the relationships between OEH and its employees were to deteriorate, it may be faced with labor shortages or stoppages, which would adversely affect its ability to operate its facilities. OEH s owned hotels and restaurants are subject to risks generally incident to the ownership of commercial real estate and often beyond its control. Some of the Company s directors and executive officers may have potential conflicts of interest because they own SCL shares or have positions at SCL, or because of contractual rights relating to one OEH property. Covenants in OEH s financing agreements could limit its discretion in operating its businesses, causing it to make less advantageous business decisions; OEH s indebtedness is collateralized by substantially all of its properties. Increases in prevailing interest rates may increase OEH s interest payment obligations. The Company s ability to pay dividends on the Class A common shares is limited. OEH s substantial indebtedness could adversely affect its financial health. The Company will not be restricted from issuing additional Class A common shares, and any sales could negatively affect the trading price of the Class A common shares outstanding. The price of the Class A common shares may fluctuate significantly, which may make it difficult for shareholders to sell the Class A common shares when they want or at prices they find attractive. The Company s directors and officers may control the outcome of most matters submitted to a vote of shareholders. Provisions in the Company s charter documents, and the preferred share purchase rights currently attached to the Class A and B common shares, may discourage potential acquisitions of OEH, even those that the holders of a majority of its Class A common shares might favor. A judgment of a United States court for liabilities under U.S. securities laws might not be enforceable in Bermuda, or an original action might not be brought in Bermuda against OEH for liabilities under U.S. securities laws.

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1115836--3/6/2006--ORIENT_EXPRESS_HOTELS_LTD