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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|(Mark One)                                                    |                                                                                         
|------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the Quarterly Period Ended September 30, 2003            
|or                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period
from                             to

Commission file number 1-16017

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ORIENT-EXPRESS HOTELS LTD.(Exact name of registrant as specified in its charter)

|Bermuda(State or other jurisdiction of incorporation or organization)                              |  | 98-0223493(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|22 Victoria Street
P.O. Box HM 1179
Hamilton HMEX, Bermuda(Address of principal executive offices) |  | (Zip Code)                                    
|441-295-2244(Registrant's telephone number, including area code)                                  

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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Indicate
by check mark whether the registrant is an accelerated filer (under Rule 12b-2 of the Exchange
Act). Yes ý    No o

As
of October 31, 2003, 28,340,601 Class A common shares and 20,503,877 Class B common shares of Orient-Express Hotels Ltd. were outstanding, including
18,044,478 Class B shares owned by a subsidiary of Orient-Express Hotels Ltd. and 11,943,901 Class A shares and 2,459,399 Class B shares owned by Sea Containers Ltd.

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PART IFINANCIAL INFORMATION

Orient-Express Hotels Ltd. and Subsidiaries  Consolidated Balance Sheets

|                                                                                        |                                                                        | September 30,
2003
(unaudited) |           | December 31,
2002 |  
|--------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------------------------ | --------- | ----------------- | -
|
|Assets                                                                                  |                                                                        |                                |           |                   |  
|Cash and cash equivalents                                                               |                                                                        | $                              | 53,452    |                   | $
|Accounts receivable, net of allowances of $700 and $592                                 |                                                                        |                                | 57,561    |                   |  
|Prepaid expenses and other                                                              |                                                                        |                                | 11,392    |                   |  
|Inventories                                                                             |                                                                        |                                | 26,205    |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|Total current assets                                                                    |                                                                        |                                | 148,610   |                   |  
|Property, plant and equipment, net of accumulated depreciation of $126,675 and $101,238 |                                                                        |                                | 827,140   |                   |  
|Investments                                                                             |                                                                        |                                | 138,124   |                   |  
|Goodwill                                                                                |                                                                        |                                | 29,529    |                   |  
|Other assets                                                                            |                                                                        |                                | 11,667    |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|                                                                                        |                                                                        | $                              | 1,155,070 |                   | $
|                                                                                        |                                                                        |                                |           |                   |  
|Liabilities and Shareholders' Equity                                                    |                                                                        |                                |           |                   |  
|Working capital facilities                                                              |                                                                        | $                              | 33,530    |                   | $
|Accounts payable                                                                        |                                                                        |                                | 23,748    |                   |  
|Accrued liabilities                                                                     |                                                                        |                                | 56,997    |                   |  
|Deferred revenue                                                                        |                                                                        |                                | 18,076    |                   |  
|Current portion of long-term debt and capital leases                                    |                                                                        |                                | 68,197    |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|Total current liabilities                                                               |                                                                        |                                | 200,548   |                   |  
|Long-term debt and obligations under capital lease                                      |                                                                        |                                | 499,750   |                   |  
|Deferred income taxes                                                                   |                                                                        |                                | 4,010     |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|                                                                                        |                                                                        |                                | 704,308   |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|Minority interest                                                                       |                                                                        |                                | 3,891     |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|Shareholders' equity:                                                                   |                                                                        |                                |           |                   |  
|                                                                                        | Preferred shares $0.01 par value (30,000,000 shares authorized):       |                                |           |                   |  
|                                                                                        | Issuednil                                                             |                                |           |                  |  
|                                                                                        | Class A common shares $0.01 par value (120,000,000 shares authorized): |                                |           |                   |  
|                                                                                        | Issued28,340,601                                                      |                                |           | 283               |  
|                                                                                        | Class B common shares $0.01 par value (120,000,000 shares authorized): |                                |           |                   |  
|                                                                                        | Issued20,503,877                                                      |                                |           | 205               |  
|Additional paid-in capital                                                              |                                                                        |                                | 226,963   |                   |  
|Retained earnings                                                                       |                                                                        |                                | 243,866   |                   |  
|Accumulated other comprehensive loss, net of income taxes                               |                                                                        |                                | (24,265   | )                 |  
|Less: reduction due to Class B common shares owned by a subsidiary18,044,478           |                                                                        |                                | (181      | )                 |  
|                                                                                        |                                                                        |                                |           |                   |  
|Total shareholders' equity                                                              |                                                                        |                                | 446,871   |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|Commitments and contingencies                                                           |                                                                        |                                |          |                   |  
|                                                                                        |                                                                        |                                |           |                   |  
|                                                                                        |                                                                        | $                              | 1,155,070 |                   | $
|                                                                                        |                                                                        |                                |           |                   |  

See
notes to consolidated financial statements.

2

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Orient-Express Hotels Ltd. and Subsidiaries  Statements of Consolidated Operations (unaudited)

|                                                   |                                     | Three months ended September 30, |       
|-------------------------------------------------- | ----------------------------------- | -------------------------------- | ------
|
|
|Revenue                                            |                                     | $                                | 88,492
|Earnings from unconsolidated companies             |                                     |                                  | 2,641 
|                                                   |                                     |                                  |       
|                                                   |                                     |                                  | 91,133
|                                                   |                                     |                                  |       
|Expenses:                                          |                                     |                                  |       
|                                                   | Depreciation and amortization       |                                  |       
|                                                   | Operating                           |                                  |       
|                                                   | Selling, general and administrative |                                  |       
|                                                   |                                     |                                  |       
|Total expenses                                     |                                     |                                  | 76,795
|                                                   |                                     |                                  |       
|Earnings from operations before net finance costs  |                                     |                                  | 14,338
|Interest expense, net                              |                                     |                                  | (5,460
|Interest and related income                        |                                     |                                  | 860   
|                                                   |                                     |                                  |       
|Net finance costs                                  |                                     |                                  | (4,600
|                                                   |                                     |                                  |       
|Earnings before income taxes                       |                                     |                                  | 9,738 
|Provision for income taxes                         |                                     |                                  | 1,558 
|                                                   |                                     |                                  |       
|Net earnings                                       |                                     | $                                | 8,180 
|                                                   |                                     |                                  |       
|Net earnings per class A and class B common share: |                                     |                                  |       
|                                                   | Basic and diluted                   |                                  | $     
|                                                   |                                     |                                  |       

See
notes to consolidated financial statements.

3

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Orient-Express Hotels Ltd. and Subsidiaries  Statements of Consolidated Operations (unaudited)

|                                                   |                                     | Nine months ended September 30, |        
|-------------------------------------------------- | ----------------------------------- | ------------------------------- | -------
|
|
|Revenue                                            |                                     | $                               | 238,155
|Earnings from unconsolidated companies             |                                     |                                 | 6,454  
|                                                   |                                     |                                 |        
|                                                   |                                     |                                 | 244,609
|                                                   |                                     |                                 |        
|Expenses:                                          |                                     |                                 |        
|                                                   | Depreciation and amortization       |                                 |        
|                                                   | Operating                           |                                 |        
|                                                   | Selling, general and administrative |                                 |        
|                                                   |                                     |                                 |        
|Total expenses                                     |                                     |                                 | 212,463
|                                                   |                                     |                                 |        
|Earnings from operations before net finance costs  |                                     |                                 | 32,146 
|Interest expense, net                              |                                     |                                 | (15,267
|Interest and related income                        |                                     |                                 | 967    
|                                                   |                                     |                                 |        
|Net finance costs                                  |                                     |                                 | (14,300
|                                                   |                                     |                                 |        
|Earnings before income taxes                       |                                     |                                 | 17,846 
|Provision for income taxes                         |                                     |                                 | 2,855  
|                                                   |                                     |                                 |        
|Net earnings                                       |                                     | $                               | 14,991 
|                                                   |                                     |                                 |        
|Net earnings per class A and class B common share: |                                     |                                 |        
|                                                   | Basic and diluted                   |                                 | $      
|                                                   |                                     |                                 |        

See
notes to consolidated financial statements.

4

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Orient-Express Hotels Ltd. and Subsidiaries  Statements of Consolidated Cash Flows (unaudited)

|                                                      |                                                                                     | Nine months ended September 30,                                                   |        
|----------------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------
|
|
|Cash flows from operating activities:                 |                                                                                     |                                                                                   |        
|                                                      | Net earnings                                                                        |                                                                                   | $      
|                                                      |                                                                                     |                                                                                   |        
|                                                      | Adjustments to reconcile net earnings to net cash provided by operating activities: |                                                                                   |        
|                                                      |                                                                                     | Depreciation and amortization                                                     |        
|                                                      |                                                                                     | Undistributed earnings of affiliates                                              |        
|                                                      |                                                                                     | Other non-cash items                                                              |        
|                                                      | Change in assets and liabilities net of effects from acquisition of subsidiaries:   |                                                                                   |        
|                                                      |                                                                                     | Increase in accounts receivable, prepaid expenses and other                       |        
|                                                      |                                                                                     | Increase in inventories                                                           |        
|                                                      |                                                                                     | Increase/(decrease) in accounts payable, accrued liabilities and deferred revenue |        
|                                                      |                                                                                     |                                                                                   |        
|                                                      | Total adjustments                                                                   |                                                                                   |        
|                                                      |                                                                                     |                                                                                   |        
|Net cash provided by operating activities             |                                                                                     |                                                                                   | 26,699 
|                                                      |                                                                                     |                                                                                   |        
|Cash flows from investing activities:                 |                                                                                     |                                                                                   |        
|                                                      | Capital expenditures                                                                |                                                                                   |        
|                                                      | Acquisitions and investments, net of cash acquired                                  |                                                                                   |        
|                                                      | Proceeds from sale of fixed assets and other                                        |                                                                                   |        
|                                                      |                                                                                     |                                                                                   |        
|Net cash used in investing activities                 |                                                                                     |                                                                                   | (93,842
|                                                      |                                                                                     |                                                                                   |        
|Cash flows from financing activities:                 |                                                                                     |                                                                                   |        
|                                                      | Net proceeds from working capital facilities and redrawable loans                   |                                                                                   |        
|                                                      | Issuance of long-term debt                                                          |                                                                                   |        
|                                                      | Principal payments under long-term debt                                             |                                                                                   |        
|                                                      |                                                                                     |                                                                                   |        
|Net cash provided by financing activities             |                                                                                     |                                                                                   | 81,008 
|                                                      |                                                                                     |                                                                                   |        
|Effect of exchange rate changes on cash               |                                                                                     |                                                                                   | 1,727  
|                                                      |                                                                                     |                                                                                   |        
|Net increase/(decrease) in cash and cash equivalents. |                                                                                     |                                                                                   | 15,592 
|Cash and cash equivalents at beginning of period      |                                                                                     |                                                                                   | 37,860 
|                                                      |                                                                                     |                                                                                   |        
|Cash and cash equivalents at end of period            |                                                                                     | $                                                                                 | 53,452 
|                                                      |                                                                                     |                                                                                   |        

See
notes to consolidated financial statements.

5

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Orient-Express Hotels Ltd. and Subsidiaries  Statements of Consolidated Shareholders' Equity (unaudited)

|                            |                                              | Preferred
Shares
at Par
Value |   | Class A
Common
Shares
at Par
Value |   | Class B
Common
Shares
at Par
Value |  | Additional
Paid-In
Capital |     | Retained
Earnings |   | Accumulated
Other
Comprehensive
Income/(Loss) |  | Common
Shares
Owned by
Subsidiary |         | Total
Comprehensive
Income/(Loss)
|--------------------------- | -------------------------------------------- | ----------------------------- | - | ---------------------------------- | - | ---------------------------------- |  | -------------------------- | --- | ----------------- | - | --------------------------------------------- |  | --------------------------------- | ------- | ---------------------------------
|
|Balance, January 1, 2003    |                                              | $                             |  |                                    | $ | 283                                |  | $                          | 205 |                   | $ | 226,963                                       |  | $                                 | 228,875 |                                  
|Comprehensive income:       |                                              |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         |                                  
|                            | Net earnings on common shares for the period |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         | 14,991                           
|                            | Other comprehensive income                   |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         |                                  
|                            |                                              |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         |                                  
|                            |                                              |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         |                                  
|                            |                                              |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         |                                  
|Balance, September 30, 2003 |                                              | $                             |  |                                    | $ | 283                                |  | $                          | 205 |                   | $ | 226,963                                       |  | $                                 | 243,866 |                                  
|                            |                                              |                               |   |                                    |   |                                    |  |                            |     |                   |   |                                               |  |                                   |         |                                  

See notes to consolidated financial statements.

6

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Orient-Express Hotels Ltd. and Subsidiaries  Notes to Consolidated Financial Statements

1.     Basis of financial statement presentation

(a)   Accounting policies

In this report Orient-Express Hotels Ltd. is referred to as the "Company", and the Company and its subsidiaries are referred to collectively as "OEH". At
September 30, 2003, Sea Containers Ltd., a Bermuda company ("SCL"), owned 47% of the equity shares in the Company.

For
a description of significant accounting policies and basis of presentation, see Notes 1, 4 and 14 to the consolidated financial statements in the 2002
Form 10-K annual report. "SFAS" means Statement of Financial Accounting Standards and "FIN" means an accounting interpretation, both of the Financial Accounting Standards Board.

In
the opinion of management, all adjustments necessary for a fair statement of the results of operations for the three and nine months ended September 30, 2003 and 2002, which
are all of a normal recurring nature, have been reflected in the information provided.

(b)   Net earnings per share

The number of shares used in computing basic and diluted earnings per share was as follows (in thousands):

|                   |  | Nine months ended September 30,
|------------------ |  | -------------------------------
|
|Basic              |  | 30,800                         
|Effect of dilution |  |                               
|                   |  |                                
|Diluted            |  | 30,800                         
|                   |  |                                

For
the nine months ended September 30, 2003 and 2002, the anti-dilutive effect of stock options on 155,121 and 62,299 class A common shares, respectively, was
excluded from the computation of diluted earnings per share.

|                   |  | Three months ended September 30,
|------------------ |  | --------------------------------
|
|Basic              |  | 30,800                          
|Effect of dilution |  | 53                              
|                   |  |                                 
|Diluted            |  | 30,853                          
|                   |  |                                 

For
the three months ended September 30, 2003 and 2002, the anti-dilutive effect of stock options on 68,946 and 182,750 class A common shares, respectively, was
excluded from the computation of diluted earnings per share.

7

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(c)   Derivative financial instruments

As reported in Note 1(s) to the financial statements in the 2002 Form 10-K annual report, the Company adopted with effect on
January 1, 2001, SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137, No. 138 and No. 149. For the nine months
ended September 30, 2003 and 2002, the change in the fair market value of derivative instruments resulted in a charge of $65,000 and a credit of $1,756,000, respectively, to other comprehensive
income.

The
components of comprehensive income are as follows (dollars in thousands):

|                                   |                                          | Nine months ended September 30,
|---------------------------------- | ---------------------------------------- | -------------------------------
|
|Net earnings on common shares      |                                          | $                              
|Other comprehensive income/(loss): |                                          |                                
|                                   | Foreign currency translation adjustments |                                
|                                   | Changes in fair value of derivatives     |                                
|                                   |                                          |                                
|Comprehensive income               |                                          | $                              
|                                   |                                          |                                

(d)   Goodwill

OEH's goodwill relates to its hotels and restaurants business segment. There were no changes in the carrying amount of goodwill for the three and
nine-month periods ended September 30, 2003.

8

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(e)   Stock-based compensation

OEH's compensation cost for share options is measured as the excess, if any, of the quoted market price of the Company's shares at the date of the grant over the
amount an employee must pay to acquire the shares, in accordance with the intrinsic value method under Accounting Principles Board Opinion No. 25. If compensation cost for the Company's stock
option plan had been determined based on fair values as of the date of grant, OEH's net earnings and earnings per share would have been reported as follows (dollars in thousands, except per share
amounts):

|                                      |              |                                                                                                              | Nine months ended September 30, |       
|------------------------------------- | ------------ | ------------------------------------------------------------------------------------------------------------ | ------------------------------- | ------
|
|Net earnings on common shares:        |              |                                                                                                              |                                 |       
|                                      | As reported  |                                                                                                              | $                               | 14,991
|                                      | Deduct:      | Total stock-based employee compensation expense determined under fair value based method, net of related tax |                                 |       
|                                      |              |                                                                                                              |                                 |       
|                                      | Pro forma    |                                                                                                              | $                               | 14,234
|                                      |              |                                                                                                              |                                 |       
|Basic and diluted earnings per share: |              |                                                                                                              |                                 |       
|                                      | As reported: |                                                                                                              |                                 |       
|                                      |              | Basic and diluted                                                                                            |                                 | $     
|                                      |              |                                                                                                              |                                 |       
|                                      | Pro forma:   |                                                                                                              |                                 |       
|                                      |              | Basic and diluted                                                                                            |                                 | $     
|                                      |              |                                                                                                              |                                 |       

|                                      |              |                                                                                                              | Three months ended September 30, |      
|------------------------------------- | ------------ | ------------------------------------------------------------------------------------------------------------ | -------------------------------- | -----
|
|Net earnings on common shares:        |              |                                                                                                              |                                  |      
|                                      | As reported  |                                                                                                              | $                                | 8,180
|                                      | Deduct:      | Total stock-based employee compensation expense determined under fair value
based method, net of related tax |                                  |      
|                                      |              |                                                                                                              |                                  |      
|                                      | Pro forma    |                                                                                                              | $                                | 7,897
|                                      |              |                                                                                                              |                                  |      
|Basic and diluted earnings per share: |              |                                                                                                              |                                  |      
|                                      | As reported: |                                                                                                              |                                  |      
|                                      |              | Basic and diluted                                                                                            |                                  | $    
|                                      |              |                                                                                                              |                                  |      
|                                      | Pro forma:   |                                                                                                              |                                  |      
|                                      |              | Basic and diluted                                                                                            |                                  | $    
|                                      |              |                                                                                                              |                                  |      

The
pro forma figures in the preceding tables may not be representative of pro forma amounts in future years.

(f)    Reclassifications

Certain items in 2002 have been reclassified to conform to the 2003 presentation.

9

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2.     Acquisitions and investments

In February 2002, OEH acquired the hotel La Residencia in Mallorca, Spain and the hotel Le Manoir aux Quat'Saisons in Oxfordshire, England for a total of
approximately $40,000,000. The price was paid largely with bank mortgage finance.

In
March 2002, OEH acquired for approximately $7,500,000 a 75% share interest in Maroma Resort and Spa near Cancun, Mexico. The purchase price was paid in cash, with $1,000,000
paid in March 2003.

No
goodwill was recognized in these transactions. These acquisitions have been accounted for as a purchase in accordance with SFAS No. 141, Business Combinations.

The
results of these operations have been included in the consolidated financial results of OEH from the dates of acquisition, and the assets and liabilities of the acquired companies
have been recorded at their fair value at the dates of acquisition. The pro forma impact on results, had these acquisitions occurred on January 1, 2002, is not material.

In
addition, on April 25, 2003, OEH acquired a 50% interest in the Hotel Ritz in Madrid, Spain through a 50/50 joint venture with a Spanish real estate investment company. The
purchase price was $135,000,000, and each joint venture partner contributed $22,000,000 with the balance financed by bank loans. Subsidiaries of the Company are obligated on $27,000,000 of these loans
until the completion of various legal procedures in Spain, which are expected to take about nine months after the purchase, when the debt would be entirely non-recourse to OEH. In addition
to its interest in the hotel, OEH acquired the exclusive long-term management contract of the hotel. This investment is accounted for under the equity method of accounting.

Summarized
financial data for OEH's unconsolidated companies for the periods during which the investments were held by OEH are as follows (dollars in thousands):

|                                           |  | September 30,
2003 |         | December 31,
2002
|------------------------------------------ |  | ------------------ | ------- | -----------------
|Current assets                             |  | $                  | 55,043  |                  
|Property, plant and equipment, net         |  |                    | 228,886 |                  
|Other assets                               |  |                    | 3,861   |                  
|                                           |  |                    |         |                  
|Total assets                               |  | $                  | 287,790 |                  
|                                           |  |                    |         |                  
|Current liabilities                        |  | $                  | 37,626  |                  
|Long-term debt                             |  |                    | 132,824 |                  
|Other liabilities                          |  |                    | 56,933  |                  
|Total shareholders'equity                  |  |                    | 60,407  |                  
|                                           |  |                    |         |                  
|Total liabilities and shareholders' equity |  | $                  | 287,790 |                  
|                                           |  |                    |         |                  

|                                                  |  | Nine months ended September 30, |       
|------------------------------------------------- |  | ------------------------------- | ------
|
|Revenue                                           |  | $                               | 74,991
|                                                  |  |                                 |       
|Earnings from operations before net finance costs |  | $                               | 9,661 
|                                                  |  |                                 |       
|Net earnings                                      |  | $                               | (606  
|                                                  |  |                                 |       

10

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3.     Property, plant and equipment

The major classes of property, plant and equipment are as follows (dollars in thousands):

|                                        |  | September 30,
2003 |          | December 31,
2002 |  
|--------------------------------------- |  | ------------------ | -------- | ----------------- | -
|Freehold and leased land and buildings  |  | $                  | 694,009  |                   | $
|Machinery and equipment                 |  |                    | 128,281  |                   |  
|Fixtures, fittings and office equipment |  |                    | 115,271  |                   |  
|River cruiseship                        |  |                    | 16,254   |                   |  
|                                        |  |                    |          |                   |  
|                                        |  |                    | 953,815  |                   |  
|Less: accumulated depreciation          |  |                    | (126,675 | )                 |  
|                                        |  |                    |          |                   |  
|                                        |  | $                  | 827,140  |                   | $
|                                        |  |                    |          |                   |  

At
September 30, 2003, the balance under capital lease for land and buildings was $10,138,000 (December 31, 2002$9,527,000), for machinery and equipment
$2,228,000 (December 31, 2002$2,039,000), and for fixtures and fittings $979,000 (December 31, 2002$945,000). Accumulated depreciation related to assets under
capital lease at September 30, 2003 was $1,380,000 (December 31, 2002$1,075,000).

4.     Long-term debt and obligations under capital lease

Long-term debt consists of the following (dollars in thousands):

|                                                                                                                                                                                                  |  | September 30,
2003 |         | December 31,
2002
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | -----------------
|Loans from banks secured by property, plant and equipment payable over periods of 1 to 12 years, with a weighted average interest rate of 3.96% and 4.30%, respectively, primarily based on LIBOR |  | $                  | 546,965 |                  
|Loan secured by a river cruiseship payable over 5 years, with a weighted average interest rate of 2.77% and 3.47%, respectively, based on LIBOR                                                   |  |                    | 3,000   |                  
|Obligations under capital lease                                                                                                                                                                   |  |                    | 17,982  |                  
|                                                                                                                                                                                                  |  |                    |         |                  
|                                                                                                                                                                                                  |  |                    | 567,947 |                  
|Less: current portion                                                                                                                                                                             |  |                    | 68,197  |                  
|                                                                                                                                                                                                  |  |                    |         |                  
|                                                                                                                                                                                                  |  | $                  | 499,750 |                  
|                                                                                                                                                                                                  |  |                    |         |                  

Certain
credit agreements of OEH have restrictive covenants. At September 30, 2003, OEH was in compliance with these covenants. OEH does not currently have any covenants in any of
its loan agreements which limit the payment of dividends. See also Note 11.

On
July 30, 2003, OEH borrowed $103,000,000 under a bank-syndicated loan facility totalling $154,000,000 secured on three Italian hotels. The initial drawdown was used
principally to refinance an existing $78,000,000 loan facility secured on the same hotels and guaranteed by SCL, with the balance providing additional working capital. The new facility which is not
guaranteed by SCL places certain financial covenants on OEH, namely a minimum consolidated net worth test and a minimum consolidated interest coverage test, both as defined.

11

---

The
following is a summary of the aggregate maturities of long-term debt, including obligations under capital lease, at September 30, 2003 (dollars in thousands):

|Year ending December 31, |  |  
|------------------------ |  | -
|2004                     |  | $
|2005                     |  |  
|2006                     |  |  
|2007                     |  |  
|2008 and thereafter      |  |  
|                         |  |  
|                         |  | $
|                         |  |  

The
interest rates on substantially all of OEH's long-term debt are adjusted regularly to reflect current market rates. Accordingly, the carrying amounts of OEH's
long-term debt also approximate fair value.

12

---

5.     Income taxes

The provision for income taxes consists of the following (dollars in thousands):

|              |  | Nine months ended September 30, 2003
|------------- |  | ------------------------------------
|
|United States |  | $                                   
|Other foreign |  |                                     
|              |  |                                     
|              |  | $                                   
|              |  |                                     

|              |  | Nine months ended September 30, 2002
|------------- |  | ------------------------------------
|
|United States |  | $                                   
|Other foreign |  |                                     
|              |  |                                     
|              |  | $                                   
|              |  |                                     

The
Company is incorporated in Bermuda, which does not impose an income tax. OEH's effective tax rate is entirely due to the income taxes imposed by jurisdictions in which OEH conducts
business other than Bermuda.

Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. The following represents OEH's net deferred tax liabilities (dollars in thousands):

|                             |  | September 30,
2003 |         | December 31,
2002 |  
|---------------------------- |  | ------------------ | ------- | ----------------- | -
|Gross deferred tax assets    |  | $                  | 58,085  |                   | $
|Less: Valuation allowance    |  |                    | (37,198 | )                 |  
|                             |  |                    |         |                   |  
|Net deferred tax assets      |  |                    | 20,887  |                   |  
|Deferred tax liabilities     |  |                    | (24,897 | )                 |  
|                             |  |                    |         |                   |  
|Net deferred tax liabilities |  | $                  | (4,010  | )                 | $
|                             |  |                    |         |                   |  

The
deferred tax assets consist of tax loss carryforwards and the future tax benefits of accrued pension costs recognized in other comprehensive income. The deferred tax liabilities
consist primarily of differences between the tax basis of depreciable assets and the adjusted basis as reflected in the financial statements.

13

---

6.     Supplemental cash flow information

|                                                                                                                                                                                   |  | Nine months ended September 30, |        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | -------
|
|
|Cash paid for:                                                                                                                                                                     |  |                                 |        
|Interest                                                                                                                                                                           |  | $                               | 13,771 
|Income taxes                                                                                                                                                                       |  | $                               | 2,401  
|In conjunction with acquisitions and investments (see Note 2), liabilities were assumed relating to non-cash investing and financing activities as follows (dollars in thousands): | 
|Fair value of assets acquired                                                                                                                                                      |  | $                               | 49,777 
|Cash paid                                                                                                                                                                          |  |                                 | (22,000
|                                                                                                                                                                                   |  |                                 |        
|Liabilities assumed                                                                                                                                                                |  | $                               | 27,777 
|                                                                                                                                                                                   |  |                                 |        

7.     Accumulated other comprehensive loss

The accumulated balances for each component of other comprehensive loss are as follows (dollars in thousands):

|                                               |  | September 30,
2003 |         | December 31,
2002 |  
|---------------------------------------------- |  | ------------------ | ------- | ----------------- | -
|Foreign currency translation adjustments       |  | $                  | (24,017 | )                 | $
|Net change on derivative financial instruments |  |                    | 1,258   |                   |  
|Minimum pension liability, net of tax          |  |                    | (1,506  | )                 |  
|                                               |  |                    |         |                   |  
|                                               |  | $                  | (24,265 | )                 | $
|                                               |  |                    |         |                   |  

8.     Commitments

Outstanding contracts to purchase fixed assets were approximately $2,800,000 at September 30, 2003 (December 31, 2002$10,100,000).

14

---

9.     Information concerning financial reporting for segments and operations in different geographical areas

As reported in the Company's 2002 Form 10-K annual report, OEH has two reporting segments, (i) hotels and restaurants and
(ii) tourist trains and cruises. Financial information regarding these business segments is as follows, with net finance costs appearing net of capitalized interest and interest and related
income (dollars in thousands):

|                                                    |                            |                                           | Nine months ended September 30, |        
|--------------------------------------------------- | -------------------------- | ----------------------------------------- | ------------------------------- | -------
|
|Revenue and earnings from unconsolidated companies: |                            |                                           |                                 |        
|                                                    | Hotels and restaurants     |                                           |                                 |        
|                                                    |                            | Owned hotels                              | Europe                         |        
|                                                    | North America             |                                           |                                 | 49,778 
|                                                    | Rest of world             |                                           |                                 | 43,256 
|                                                    |                            | Hotel management/part ownership interests |                                 |        
|                                                    |                            | Restaurants                               |                                 |        
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           |                                 | 210,438
|                                                    | Tourist trains and cruises |                                           |                                 | 34,171 
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           | $                               | 244,609
|                                                    |                            |                                           |                                 |        
|Earnings from unconsolidated companies:             |                            |                                           |                                 |        
|                                                    | Hotels and restaurants     |                                           |                                 |        
|                                                    |                            | Hotel management/part ownership interests |                                 | $      
|                                                    |                            | Restaurants                               |                                 |        
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           |                                 | 4,957  
|                                                    | Tourist trains and cruises |                                           |                                 | 1,497  
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           | $                               | 6,454  
|                                                    |                            |                                           |                                 |        
|Depreciation and amortization:                      |                            |                                           |                                 |        
|                                                    | Hotels and restaurants     |                                           |                                 |        
|                                                    |                            | Owned hotels                              | Europe                         |        
|                                                    | North America             |                                           |                                 | 4,358  
|                                                    | Rest of world             |                                           |                                 | 4,968  
|                                                    |                            | Restaurants                               |                                 |        
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           |                                 | 16,443 
|                                                    | Tourist trains and cruises |                                           |                                 | 2,236  
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           | $                               | 18,679 
|                                                    |                            |                                           |                                 |        
|                                                    |                            |                                           |                                 |        

15

---

|Earnings from operations before net finance costs: |                            |                                           |         |        |        |         |       
|-------------------------------------------------- | -------------------------- | ----------------------------------------- | ------- | ------ | ------ | ------- | ------
|                                                   | Hotels and restaurants     |                                           |         |        |        |         |       
|                                                   |                            | Owned hotels                              | Europe |        | $      | 24,206  |       
|                                                   | North America             |                                           |         | 4,471  |        |         | 5,643 
|                                                   | Rest of world             |                                           |         | 1,395  |        |         | 5,331 
|                                                   |                            | Hotel management/part ownership interests |         |        | 10,010 |         |       
|                                                   |                            | Restaurants                               |         |        | 212    |         |       
|                                                   |                            |                                           |         |        |        |        
|                                                   |                            |                                           |         | 40,294 |        |         | 43,448
|                                                   | Tourist trains and cruises |                                           |         | 881    |        |         | 3,636 
|                                                   |                            |                                           |         |        |        |        
|                                                   |                            |                                           |         | 41,175 |        |         | 47,084
|Central selling, general and administrative costs  |                            |                                           | (9,029  | )      |        | (8,057  | )     
|                                                   |                            |                                           |         |        |        |        
|                                                   |                            |                                           |         | 32,146 |        |         | 39,027
|Net finance costs                                  |                            |                                           | (14,300 | )      |        | (14,682 | )     
|                                                   |                            |                                           |         |        |        |        
|Earnings before income taxes                       |                            |                                           | 17,846  |        |        | 24,345  |       
|Provision for income taxes                         |                            |                                           | (2,855  | )      |        | (3,228  | )     
|                                                   |                            |                                           |         |        |        |        
|Net earnings                                       |                            | $                                         | 14,991  |        | $      | 21,117  |       
|                                                   |                            |                                           |         |        |        |        
|Capital expenditure:                               |                            |                                           |         |        |        |         |       
|                                                   | Hotels and restaurants     |                                           |         |        |        |         |       
|                                                   |                            | Owned hotels                              | Europe |        | $      | 13,178  |       
|                                                   | North America             |                                           |         | 16,623 |        |         | 17,043
|                                                   | Rest of world             |                                           |         | 11,612 |        |         | 10,690
|                                                   |                            | Restaurants                               |         |        | 787    |         |       
|                                                   |                            | Hotel management/part ownership interests |         |        |       |         |       
|                                                   |                            |                                           |         |        |        |        
|                                                   |                            |                                           |         | 42,200 |        |         | 43,839
|                                                   | Tourist trains and cruises |                                           |         | 2,161  |        |         | 1,167 
|                                                   |                            |                                           |         |        |        |        
|                                                   |                            |                                           | $       | 44,361 |        | $       | 45,006
|                                                   |                            |                                           |         |        |        |        

|                           |                        |                                           | September 30,
2003 |           | December 31,
2002
|-------------------------- | ---------------------- | ----------------------------------------- | ------------------ | --------- | -----------------
|Identifiable assets:       |                        |                                           |                    |           |                  
|                           | Hotels and restaurants |                                           |                    |           |                  
|                           |                        | Owned hotels                              | Europe            |           | $                
|                           | North America         |                                           |                    | 220,835   |                  
|                           | Rest of world         |                                           |                    | 291,456   |                  
|                           |                        | Hotel management/part ownership interests |                    |           | 72,710           
|                           |                        | Restaurants                               |                    |           | 35,447           
|                           |                        |                                           |                    |           |                  
|                           |                        |                                           |                    | 1,056,448 |                  
|Tourist trains and cruises |                        |                                           | 98,622             |           |                  
|                           |                        |                                           |                    |           |                  
|                           |                        |                                           | $                  | 1,155,070 |                  
|                           |                        |                                           |                    |           |                  

16

---

Financial
information regarding geographic areas based on the location of properties is as follows (dollars in thousands):

|         |               | Nine months ended September 30,
|-------- | ------------- | -------------------------------
|
|Revenue: |               |                                
|         | Europe        |                                
|         | North America |                                
|         | Rest of world |                                
|         |               |                                
|         |               | $                              
|         |               |                                

|                                 |               | September 30,
2003 |         | December 31,
2002
|-------------------------------- | ------------- | ------------------ | ------- | -----------------
|Long-lived assets at book value: |               |                    |         |                  
|                                 | Europe        |                    | $       | 420,666          
|                                 | North America |                    |         | 293,507          
|                                 | Rest of world |                    |         | 280,620          
|                                 |               |                    |         |                  
|                                 |               | $                  | 994,793 |                  
|                                 |               |                    |         |                  

10.   Related party transactions

For the nine months ended September 30, 2003, OEH paid subsidiaries of SCL $3,421,000 (2002$4,547,000) for the provision of various services
under a shared services agreement between OEH and SCL. These amounts have been settled in accordance with the shared services agreement and are included in selling, general and administrative
expenses.

SCL
has guaranteed since 2000 a bank loan of OEH in the principal amount of $18,579,000 outstanding at September 30, 2003 (December 31, 2002$112,854,000).

OEH
guarantees a $3,000 000 bank loan to Eastern and Oriental Express Ltd. in which OEH has a minority shareholder interest.

OEH
manages under a long-term contract the Charleston Place Hotel (accounted for under the equity method) and has made loans to the hotel-owning company. For the nine months
ended September 30, 2003, OEH earned $2,933,000 (2002$3,122,000) in management fees and $4,647,000 (2002$5,197,000) in interest income on partnership and other loans.

OEH
manages under long-term contracts the Hotel Monasterio and the Machu Picchu Sanctuary Lodge owned by its 50/50 joint venture with local Peruvian interests, as well as the
50/50-owned PeruRail operation, and provides loans, guarantees and other credit accommodation to these joint ventures. In the nine months ended September 30, 2003, OEH earned management and
guarantee fees of $1,200,000 (2002$969,000) and loan interest of $159,000 (2002$255,000) from the joint ventures. At September 30, 2003, loans to the hotels aggregated
$5,000,000, bear interest at a spread over LIBOR and come due in 2003 and 2005. At the same date, OEH had a $750,000 subordinated loan to the PeruRail operation with an indefinite maturity date and
interest also at a spread over LIBOR.

OEH
manages under a long-term contract the Hotel Ritz in Madrid, Spain, in which OEH acquired a 50% interest on April 25, 2003 (see Note 2) and is accounted for
under the equity method. For the nine months ended September 30, 2003, OEH earned $687,000 (2002$nil) in management fees.

17

---

11.   Subsequent events

On November 6, 2003, OEH announced the sale of its Hotel Quinta do Lago in the Algarve region of Portugal at a price of $40,000,000 paid in cash. This
transaction will result in a gain which will be recognized in the fourth quarter of 2003. At the same time, OEH announced the filing of a registration statement for a proposed offering of 3,000,000
class A common shares of the Company, with an additional 450,000 shares available to cover an over-allotment option. The primary purpose of the hotel sale and sale of common shares
is to raise additional capital for purchase of hotels and related businesses and to fund investment in some of OEH's existing owned properties.

On
November 11, 2003, OEH announced an initial quarterly cash dividend payable on the Company's common shares of 2.5 cents per share commencing January 20, 2004 to holders
of record on January 5, 2004.

18

---



Management's Discussion and Analysis of Financial Condition  and Results of Operations

RESULTS OF OPERATIONS

Three
Months ended September 30, 2003 compared toThree Months ended September 30, 2002

OEH's
operating results for the three months ended September 30, 2003 and 2002, expressed as a percentage of revenue and earnings from unconsolidated companies, were as follows:

|                                                    |                                     | Three months ended September 30,
|--------------------------------------------------- | ----------------------------------- | --------------------------------
|
|
|Revenue and earnings from unconsolidated companies: |                                     |                                 
|                                                    | Hotels and restaurants              |                                 
|                                                    | Tourist trains and cruises          |                                 
|                                                    |                                     |                                 
|                                                    |                                     | 100                             
|Expenses:                                           |                                     |                                 
|                                                    | Depreciation and amortization       |                                 
|                                                    | Operating                           |                                 
|                                                    | Selling, general and administrative |                                 
|Net finance costs                                   |                                     | 5                               
|                                                    |                                     |                                 
|Earnings before income taxes                        |                                     | 11                              
|Provision for income taxes                          |                                     | 2                               
|                                                    |                                     |                                 
|Net earnings as a percentage of total revenue       |                                     | 9                               
|                                                    |                                     |                                 

19

---

The
earnings before interest, tax, depreciation and amortization ("EBITDA") of OEH's operations for the three months ended September 30, 2003 and 2002 are analyzed as follows,
including a reconciliation to net earnings (dollars in millions):

|                                                  |                               |                                             | Three months ended
September 30, |     
|------------------------------------------------- | ----------------------------- | ------------------------------------------- | -------------------------------- | ----
|
|EBITDA:                                           |                               |                                             |                                  |     
|                                                  | Hotels and restaurants        |                                             |                                  |     
|                                                  |                               | Owned hotels                                | Europe                          |     
|                                                  | North America                |                                             |                                  | (0.1
|                                                  | Rest of world                |                                             |                                  | 0.9 
|                                                  |                               | Hotel management & part ownership interests |                                  |     
|                                                  |                               | Restaurants                                 |                                  |     
|                                                  | Tourist trains and cruises    |                                             |                                  | 1.9 
|                                                  | Central overheads             |                                             |                                  | (3.1
|                                                  |                               |                                             |                                  |     
|Total EBITDA                                      |                               |                                             | 21.1                             |     
|                                                  | Depreciation and amortization |                                             |                                  | (6.7
|                                                  |                               |                                             |                                  |     
|Earnings from operations before net finance costs |                               |                                             | 14.4                             |     
|Net finance costs                                 |                               |                                             | (4.6                             | )   
|Provision for income taxes                        |                               |                                             | (1.6                             | )   
|                                                  |                               |                                             |                                  |     
|Net earnings                                      |                               | $                                           | 8.2                              |     
|                                                  |                               |                                             |                                  |     

Management
believes that EBITDA is a useful measure of operating performance, used by management and investors to help determine the ability of a company or property to incur capital
expenditure or service indebtedness, because it is not affected by non-operating factors such as leverage and the historic cost of assets. EBITDA is also a financial measure commonly used
in the hotel and leisure industry. However, EBITDA does not represent cash flow from operations as defined by U.S. generally accepted accounting principles, is not necessarily indicative of cash
available to fund all cash flow needs and should not be considered as an alternative to earnings from operations under U.S. generally accepted accounting principles for purposes of evaluating results
of operations.

20

---

Operating
information for OEH's owned hotels for the three months ended September 30, 2003 and 2002 is as follows:

|                                |                   | Three months ended September 30, |     |  |     |          |   
|------------------------------- | ----------------- | -------------------------------- | --- |  | --- | -------- | --
|
|Average Daily Rate (in dollars) |                   |                                  |     |  |     |          |   
|                                | Europe            |                                  | 581 |  | 455 |          |   
|                                | North America     |                                  | 253 |  | 249 |          |   
|                                | Rest of the world |                                  | 211 |  | 191 |          |   
|                                | Worldwide         |                                  | 382 |  | 321 |          |   
|Rooms Sold (in thousands)       |                   |                                  |     |  |     |          |   
|                                | Europe            |                                  | 49  |  | 54  |          |   
|                                | North America     |                                  | 30  |  | 28  |          |   
|                                | Rest of the world |                                  | 35  |  | 41  |          |   
|                                |                   |                                  |     |  |     |          |   
|                                | Worldwide         |                                  | 114 |  | 123 |          |   
|RevPAR (in dollars)             |                   |                                  |     |  |     |          |   
|                                | Europe            |                                  | 390 |  | 336 |          |   
|                                | North America     |                                  | 151 |  | 147 |          |   
|                                | Rest of the world |                                  | 88  |  | 95  |          |   
|                                | Worldwide         |                                  | 210 |  | 194 |          |   
|                                |                   |                                  |     |  |     | Change % |   
|                                |                   |                                  |     |  |     | Dollars  |   
|Same Store RevPAR (in dollars)  |                   |                                  |     |  |     |          |   
|                                | Europe            |                                  | 389 |  | 335 |          | 16
|                                | North America     |                                  | 142 |  | 137 |          | 4 
|                                | Rest of the world |                                  | 88  |  | 95  |          | -7
|                                | Worldwide         |                                  | 212 |  | 194 |          | 9 

Average
daily rate is the average amount achieved for the rooms sold. RevPAR is revenue per available room, that is the rooms department revenue divided by the number of available rooms
for each night of operation. Same store RevPAR is a comparison based on the operations of the same units in each period, such as by excluding the effect of any acquisitions or major refurbishments.

Revenue

Total revenue and earnings from unconsolidated companies increased by $8.0 million, or 10%, from $83.1 million in the three months ended
September 30, 2002 to $91.1 million in the three months ended September 30, 2003. Hotels and restaurants revenue increased by $7.6 million, or 11%, from
$69.8 million in the three months ended September 30, 2002 to $77.4 million in the three months ended September 30, 2003.

Tourist
trains and cruises revenue increased by $0.4 million, or 3%, from $13.3 million for the three months ended September 30, 2002 to $13.7 million for the
three months ended September 30, 2003. EBITDA was lower in the current quarter, however, largely because of weakness of the Venice Simpon-Orient-Express.

21

---

The
revenue increase for hotels and restaurants was mainly due to an increase at OEH's owned hotels of $7.0 million, or 11%, from $64.8 million in the three months ended
September 30, 2002 to $71.8 million in the three months ended September 30, 2003. The revenue from hotel management and part ownership interests increased by $0.1 million,
or 5%, from $2.8 million in the three months ended September 30, 2002 to $2.9 million in the three months ended September 30, 2003, which was mainly due to management fees
and share of earnings of the Hotel Ritz in Madrid since April 2003, partly offset by lower earnings from Charleston Place Hotel which was adversely impacted by Hurricane Isabel that led to the
cancellation of some large conference groups. The revenue from restaurants increased by $0.4 million, or 18%, from $2.2 million in the three months ended September 30, 2002 to
$2.6 million in the three months ended September 30, 2003.

The
change in revenue and EBITDA at owned hotels is analyzed on a regional basis as follows:

Europe.Revenue increased by $6.1 million, or 15%, from $39.6 million for the three months ended
September 30, 2002 to $45.7 million for the three months ended September 30, 2003. Same store RevPAR decreased by 1% in local currencies in the three months ended
September 30, 2003 compared to the three months ended September 30, 2002. Expressed in U.S. dollars, the RevPAR change translated to an increase of 16% as the euro was substantially
stronger against the U.S. dollar in the three months ended September 30, 2003. In euros, total revenue and EBITDA was the same in the three months ended September 30, 2003 and
September 30, 2002.

The
EBITDA in U.S. dollars of the region increased by $2.4 million, or 15%, from $16.6 million in the three months ended September 30, 2002 to $19.0 million
in the three months ended September 30, 2003. As outlined above, this increase was attributable to the stronger euro. In 2003, EBITDA was strong at the properties in Italy and Spain, weak in
Portugal and France, and flat in the U.K.

OEH's
European hotels have relatively low business from U.S.- based tour operators and conference and incentive organizers, with most of OEH's U.S. customers being fully independent
travellers who, it is believed, are less price sensitive than group business and their travel plans are less affected by the stronger euro.

North America.Revenue increased by $0.8 million, or 6%, from $12.1 million in the three months ended
September 30, 2002 to $12.9 million in the three months ended September 30, 2003. Approximately $0.7 million of the revenue increase was mainly attributable to Maroma
Resort and Spa, an acquisition made in 2002, and the Inn at Perry Cabin, which was partly closed during the third quarter last year whilst the property was being expanded with the addition of 40 new
rooms, doubling the number of rooms at the property. The hotel re-opened earlier this year.

The
EBITDA of the North American properties was a loss of $0.1 million in the three months ended September 30, 2003, compared to a loss of $0.3 million in the three
months ended September 30, 2002. The revenue increases attributable to Maroma Resort and Spa and the Inn at Perry Cabin in the quarter over the same quarter last year did not convert into
additional EBITDA because Maroma was in its seasonal low period and the Inn at Perry Cabin had additional costs over the prior year period with the expectation of increased occupancy of the new rooms
going forward. Hurricane Isabel in early September adversely impacted the results of the Inn at Perry Cabin in Maryland and Keswick Hall in Virginia with a high level of cancellations as the hurricane
made its progress. This resulted in lost revenue of approximately $0.3 million in the quarter which would have largely converted to EBITDA.

The
same store RevPAR increased by 4% in the three months ended September 30, 2003 compared to the three months ended September 30, 2002.

22

---

Rest of the World.Revenue increased by $0.2 million, or 2%, from $13.0 million in the three months ended
September 30, 2002 to $13.2 million in the three months ended September 30, 2003. The same store RevPAR for the rest of the world region decreased by 21% in local currencies in
the three months ended September 30, 2003 compared to the three months ended September 30, 2002. The third quarter is traditionally a period of seasonally low revenue as the regions'
hotels are situated in the southern hemisphere. The South African rand was approximately 40% stronger against the U.S. dollar in the three months ended September 30, 2003 compared to the three
months ended September 30, 2002. This had the effect of reducing tourism to South Africa in a period of traditionally low seasonal demand. In local currency the revenue of OEH's South African
hotels was approximately Rand 8 million lower in the three months ended September 30, 2003 compared to three months ended September 30, 2002. The same store RevPAR for the region
overall translated to a 7% increase when expressed in U.S. dollars, again primarily due to the stronger South African rand.

The
EBITDA of the rest of the world properties declined by $1.9 million, or 69%, from $2.8 million for the three months ended September 30, 2003 to
$0.9 million for the three months ended September 30, 2002. Approximately $0.7 million of this decline was attributable to the reduced revenue at the South African properties
referred to above as well fewer guests at the Botswana game camps. A further $0.7 million of the decline was attributable to the Bora Bora Lagoon Resort, which continued to be impacted with
negative sentiment towards travel to the Pacific region associated with the SARS virus, and to major works at that hotel and the Lilianfels in Australia. The Copacabana Palace largely accounted for
the balance of the decline.

Depreciation and Amortization

Depreciation and amortization increased by $1.6 million, or 32%, from $5.1 million in the three months ended September 30, 2002 to
$6.7 million in the three months ended September 30, 2003, primarily due to the effect of acquisitions and capital expenditures in 2002 as well as the effect of the weakness of the U.S.
dollar against currencies in which OEH records some of its assets.

Operating Expenses

Operating expenses increased by $4.8 million, or 12%, from $38.9 million in the three months ended September 30, 2002 to $43.7 million
in the three months ended September 30, 2003. This was mainly due to the weakness of the U.S. dollar, particularly against the euro, in the quarter compared to the same quarter last year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $3.1 million, or 13%, from $23.2 million in the three months ended September 30,
2002 to $26.3 million in the three months ended September 30, 2003. This was mainly due to the weakness of the U.S. dollar, particularly against the euro, in the quarter compared to the
same quarter last year.

Earnings from Operations before Net Finance Costs

Earnings from operations decreased by $1.5 million, or 9%, from $15.8 million in the three months ended September 30, 2002 to
$14.3 million in the three months ended September 30, 2003. Earnings from operations represent total revenue less depreciation and amortization, operating expenses and selling, general
and administrative expenses.

23

---

Net Finance Costs

Net finance costs decreased by $0.7 million, or 13%, from $5.3 million in the three months ended September 30, 2002 to $4.6 million in
the three months ended September 30, 2003. OEH has benefited from the effect of lower interest rates in the quarter compared to the prior year period, which has been partly offset by the
increases in debt relating to capital expenditures and acquisitions in 2002 and 2003.

Taxes on Income

The provision for income taxes increased by $0.2 million, or 14%, from $1.4 million in the three months ended September 30, 2002 compared to
$1.6 million in the three months ended September 30, 2003. The Company is incorporated in Bermuda, which does not impose an income tax. Accordingly, the entire income tax charge was
attributable to income tax incurred by subsidiaries operating in jurisdictions that impose an income tax.

Net Earnings

Net earnings decreased by $0.9 million, or 10%, from a profit of $9.1 million in the three months ended September 30, 2002 to a profit of
$8.2 million in the three months ended September 30, 2003. Net earnings represent earnings from operations less net finance costs and provision for income taxes. Results in 2003 were
adversely impacted by Hurricane Isabel in early September which led to booking cancellations at three of OEH's U.S. hotels.

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Nine Months ended September 30, 2003 compared toNine Months ended September 30, 2002

OEH's
operating results for the nine months ended September 30, 2003 and 2002, expressed as a percentage of revenue and earnings from unconsolidated companies, were as follows:

|                                                    |                                     | Nine months ended September 30,
|--------------------------------------------------- | ----------------------------------- | -------------------------------
|
|
|Revenue and earnings from unconsolidated companies: |                                     |                                
|                                                    | Hotels and restaurants              |                                
|                                                    | Tourist trains and cruises          |                                
|                                                    |                                     |                                
|                                                    |                                     | 100                            
|Expenses:                                           |                                     |                                
|                                                    | Depreciation and amortization       |                                
|                                                    | Operating                           |                                
|                                                    | Selling, general and administrative |                                
|Net finance costs                                   |                                     | 6                              
|                                                    |                                     |                                
|Earnings before income taxes                        |                                     | 7                              
|Provision for income taxes                          |                                     | 1                              
|                                                    |                                     |                                
|Net earnings as a percentage of total revenue       |                                     | 6                              
|                                                    |                                     |                                

EBITDA
of OEH's operations for the nine months ended September 30, 2003 and 2002 are analyzed as follows, including a reconciliation to net earnings (dollars in millions):

|                                                  |                               |                                             | Nine months ended
September 30, |      
|------------------------------------------------- | ----------------------------- | ------------------------------------------- | ------------------------------- | -----
|
|EBITDA:                                           |                               |                                             |                                 |      
|                                                  | Hotels and restaurants        |                                             |                                 |      
|                                                  |                               | Owned hotels                                | Europe                         |      
|                                                  | North America                |                                             |                                 | 8.8  
|                                                  | Rest of world                |                                             |                                 | 6.4  
|                                                  |                               | Hotel management & part ownership interests |                                 |      
|                                                  |                               | Restaurants                                 |                                 |      
|                                                  | Tourist trains and cruises    |                                             |                                 | 3.1  
|                                                  | Central overheads             |                                             |                                 | (9.1 
|                                                  |                               |                                             |                                 |      
|Total EBITDA                                      |                               |                                             | 50.8                            |      
|                                                  | Depreciation and amortization |                                             |                                 | (18.7
|                                                  |                               |                                             |                                 |      
|Earnings from operations before net finance costs |                               |                                             | 32.1                            |      
|Net finance costs                                 |                               |                                             | (14.3                           | )    
|Provision for incomes taxes                       |                               |                                             | (2.9                            | )    
|                                                  |                               |                                             |                                 |      
|Net earnings                                      |                               | $                                           | 14.9                            |      
|                                                  |                               |                                             |                                 |      

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Operating
information for OEH's owned hotels for the nine months ended September 30, 2003 and 2002 is as follows:

|                                |                   | Nine months ended September 30, |     |  |     |          |   
|------------------------------- | ----------------- | ------------------------------- | --- |  | --- | -------- | --
|
|Average Daily Rate (in dollars) |                   |                                 |     |  |     |          |   
|                                | Europe            |                                 | 495 |  | 380 |          |   
|                                | North America     |                                 | 313 |  | 310 |          |   
|                                | Rest of the world |                                 | 223 |  | 182 |          |   
|                                | Worldwide         |                                 | 346 |  | 289 |          |   
|Rooms Sold (in thousands)       |                   |                                 |     |  |     |          |   
|                                | Europe            |                                 | 117 |  | 128 |          |   
|                                | North America     |                                 | 99  |  | 88  |          |   
|                                | Rest of the world |                                 | 114 |  | 129 |          |   
|                                |                   |                                 |     |  |     |          |   
|                                | Worldwide         |                                 | 330 |  | 345 |          |   
|RevPAR (in dollars)             |                   |                                 |     |  |     |          |   
|                                | Europe            |                                 | 294 |  | 259 |          |   
|                                | North America     |                                 | 205 |  | 204 |          |   
|                                | Rest of the world |                                 | 100 |  | 93  |          |   
|                                | Worldwide         |                                 | 189 |  | 174 |          |   
|                                |                   |                                 |     |  |     | Change % |   
|                                |                   |                                 |     |  |     | Dollars  |   
|Same Store RevPAR (in dollars)  |                   |                                 |     |  |     |          |   
|                                | Europe            |                                 | 297 |  | 258 |          | 15
|                                | North America     |                                 | 203 |  | 205 |          | -1
|                                | Rest of the world |                                 | 100 |  | 93  |          | 7 
|                                | Worldwide         |                                 | 187 |  | 172 |          | 8 

Revenue

Total revenue, including earnings from unconsolidated companies, increased by $28.7 million, or 13%, from $215.9 million in the nine months ended
September 30, 2002 to $244.6 million in the nine months ended September 30, 2003. Hotels and restaurants revenue increased by $26.5 million, or 14%, from
$183.9 million in the nine months ended September 30, 2002 to $210.4 million in the nine months ended September 30, 2003, and tourist trains and cruises increased by
$2.2 million, or 7%, from $32.0 million for the nine months ended September 30, 2002 to $34.2 million for the nine months ended September 30, 2003.

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The
revenue increase for hotels and restaurants was due to an increase at OEH's owned hotels of $26.4 million, or 16%, from $163.3 million in the nine months ended
September 30, 2002 to $189.7 million in the nine months ended September 30, 2003. Overall, OEH's same store RevPAR at its owned hotels reduced by 5% in local currencies but with
the impact of a weaker U.S. dollar increased by 8% in the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002. The revenue increase for hotel
management and part-ownership interests was $1.1 million, or 13%, from $8.9 million in the nine months ended September 30, 2002 to $10.0 million in the nine
months ended September 30, 2003. This revenue increase was primarily due to the management fee income from Hotel Ritz in Madrid and OEH's 50% ownership position in the hotel. The revenue
decrease at OEH's restaurants was $1.0 million, or 8%, from $11.7 million in the nine months ended September 30, 2002 to $10.7 million in the nine months ended
September 30, 2003 which was mainly due to the '21' Club.

The
change in revenue at owned hotels is analyzed on a regional basis as follows:

Europe.Revenue increased by $15.7 million, or 19%, from $81.0 million for the nine months ended
September 30, 2002 to $96.7 million for the nine months ended September 30, 2003. The acquisition of La Residencia in Mallorca, Spain and Le Manoir aux Quat' Saisons in
Oxfordshire, England, during the first quarter of 2002 accounted for $1.8 million. Excluding the effect of these acquisitions, revenue increased by $13.9 million. Same store RevPAR
decreased by 4% in local currencies in the nine months ended September 30, 2003 compared to the nine months ended September 30, 2002. This translates to an increase of 15% in U.S.
dollars as the euro was significantly stronger against the U.S. dollar in the period compared to the same period in the prior year.

North America.Revenue increased by $6.9 million, or 16%, from $42.9 million in the nine months ended
September 30, 2002 to $49.8 million in the nine months ended September 30, 2003. The acquisition of a 75% interest in Maroma Resort and Spa in Mexico accounted for
$3.7 million. Excluding the effect of this acquisition, revenue increased by $3.2 million. Same store RevPAR for the North American region decreased by 1% in the nine months ended
September 30, 2003 compared to the nine months ended September 30, 2002.

Rest of the World.Revenue increased by $3.9 million, or 10%, from $39.4 million in the nine months ended
September 30, 2002 to $43.3 million in the nine months ended September 30, 2003. The same store RevPAR for the rest of the world region decreased by 8% in local currencies in the
nine months ended September 30, 2003 compared to the nine months ended September 30, 2002 but, when translated to U.S. dollars, increased by 7% primarily as the South African rand was
significantly stronger against the U.S. dollar in the period over the comparable period in 2002.

Depreciation and Amortization

Depreciation and amortization increased by $4.3 million, or 30%, from $14.4 million in the nine months ended September 30, 2002 to
$18.7 million in the nine months ended September 30, 2003, primarily due to the effect of the weakness of the U.S. dollar against currencies in which OEH records some of its assets
particularly the euro denominated assets.

Operating Expenses

Operating expenses increased by $18.0 million, or 18%, from $100.2 million in the nine months ended September 30, 2002 to
$118.2 million in the nine months ended September 30, 2003, which was mainly due to the weakness of the U.S. dollar in the period compared to the prior year period.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $13.4 million, or 21%, from $62.2 million in the nine months ended September 30,
2002 to $75.6 million in the nine months ended September 30, 2003, which was mainly due to the weakness of the U.S. dollar in the period compared to the prior year period.

Earnings from Operations

Earnings from operations decreased by $6.9 million, or 18%, from $39.0 million in the nine months ended September 30, 2002 to
$32.1 million in the nine months ended September 30, 2003.

Net Finance Costs

Net finance costs decreased by $0.4 million, or 3%, from $14.7 million in the nine months ended September 30, 2002 to $14.3 million in
the nine months ended September 30, 2003.

Taxes on Income

The provision for income taxes decreased by $0.4 million, or 12%, from $3.2 million in the nine months ended September 30, 2002 to
$2.8 million in the nine months ended September 30, 2003. The decrease was mainly due to the reduced profitability of some of OEH's taxpaying subsidiaries.

Net Earnings

Net earnings decreased by $6.1 million, or 29%, from $21.1 million in the nine months ended September 30, 2002 to $15.0 million in the
nine months ended September 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

OEH had cash and cash equivalents of $53.4 million at September 30, 2003, $15.5 million more than the $37.9 million at
December 31, 2002. At September 30, 2003 and December 31, 2002, the undrawn amounts available to OEH under its short-term lines of credit were $16.4 million and
$22.8 million, respectively. In addition, OEH has committed facilities undrawn of $29.0 million. Therefore, its total cash and availability at September 30, 2003 was
$98.8 million including the undrawn short-term lines and undrawn committed facilities.

Current
assets less current liabilities, including the current portion of long-term debt, resulted in a working capital deficit of $51.9 million at
September 30, 2003, a decrease in the working capital of $24.7 million from a deficit of $27.2 million at December 31, 2002. The overall decrease in working capital was
comprised of the following:



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OEH's
business does not require the maintenance of significant inventories or receivables and, therefore, working capital is not regarded as the most appropriate measure of liquidity.

Cash Flow

Operating Activities.Net cash provided by operating activities decreased by $4.8 million to a $26.7 million
cash surplus for the nine months ended September 30, 2003, from cash provided by operating activities from a surplus of $31.5 million for the nine months ended September 30, 2002.
Of the decrease, $6.1 million was due to reduced net earnings.

Investing Activities.Cash used in investing activities decreased by $12.9 million to $93.8 million for the
nine months ended September 30, 2003, compared to $106.7 million for the nine months ended September 30, 2002. The principal component of this decrease was a $10.8 million
decrease in expenditure on acquisitions and investments during the current period from $61.7 million to $50.9 million.

Financing Activities.Cash provided by financing activities for the nine months ended September 30, 2003 was
$81.0 million, compared to cash provided by financing activities of $72.9 million for the nine months ended September 30, 2002, an increase of $8.1 million. In the nine
months ended September 30, 2003, OEH had proceeds from borrowings under long-term debt of $104.0 million compared to proceeds of $86.2 million for the nine months
ended September 30, 2002. The proceeds of long-term debt were used to fund acquisitions, investments and capital expenditures during the period.

Capital Commitments.There were $2.8 million of capital commitments outstanding as of September 30, 2003.

Indebtedness

At September 30, 2003, OEH had $567.9 million of long-term debt and capital lease obligations secured by assets ($514.4 million
net of cash), including the current portion, which is repayable over periods of one to 12 years with a weighted average interest rate of 3.96%.See Note 4 to the Financial Statements regarding the maturity of long-term debt.

Approximately
45% of the outstanding principal was drawn in euros and the balance primarily in U.S. dollars. At September 30, 2003, OEH had all its borrowings in floating rates.

Liquidity

OEH plans to increase its capital expenditures over the next few years by the expansion of existing hotel properties and the acquisition of additional properties
consistent with its growth strategy. Expansions and capital improvements currently under consideration for 2004 and the rest of 2003 include the Hotel Ritz, Madrid, La Residencia, Maroma Resort and
Spa, Windsor Court, and Hotel Caruso. At September 30, 2003, OEH had capital commitments of $2.8 million overall relating to a number of projects.

OEH
expects to have available cash from operations and appropriate debt finance sufficient to fund its working capital requirements, capital expenditures, acquisitions and debt service
for the foreseeable future.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

OEH is exposed to market risk from changes in interest rates and foreign currency exchange rates. These exposures are monitored and managed as part of OEH's
overall risk management program, which recognizes the unpredictability of financial markets and seeks to mitigate material adverse effects on consolidated earnings and cash flows. OEH does not hold
market rate sensitive financial instruments for trading purposes.

The
market risk relating to interest rates arises mainly from the financing activities of OEH. Earnings are affected by changes in interest rates on borrowings, principally based on U.S.
dollar LIBOR and EURIBOR, and on short-term cash investments. If interest rates increased by 10%, with all other variables held constant, annual net finance costs of OEH would have
increased by approximately $2.2 million based on borrowings at September 30, 2003. The interest rates on substantially all of OEH's long-term debt are adjusted regularly to
reflect current market rates. Accordingly, the carrying amounts approximate fair value.

The
market risk relating to foreign currencies and its effects have not changed materially during the first nine months of 2003 from those described in the Company's 2002
Form 10-K annual report.

RECENT ACCOUNTING PRONOUNCEMENTS

As of September 30, 2003, the Company's significant accounting policies and estimates, which are described in Notes 1, 4, and 14 to the financial
statements in the Company's 2002 Form 10-K annual report, have not changed from December 31, 2002, except for the adoption of the following pronouncements referred to in that
report. On January 1, 2003, the Company adopted the recognition provisions of FIN No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees
of Indebtedness of Others, and SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. The adoption of the provisions of FIN No. 45 and SFAS No. 146 did
not have a material effect on OEH's consolidated financial statements.

In
January 2003, the Financial Accounting Standards Board issued FIN No. 46, Consolidation of Variable Interest Entities. FIN No. 46 requires that the assets,
liabilities and results of activities of a variable interest entity ("VIE") be consolidated into the financial statements of the enterprise that has a controlling financial interest in the VIE. FIN
No. 46 applies immediately to VIEs created after January 31, 2003, and to VIEs in which an enterprise obtains an interest after that date. In October 2003, the effective date for
applying the provisions of FIN No. 46 was deferred until the end of the first interim or annual period ending December 31, 2003 for VIEs in which an enterprise holds a variable interest
that it acquired before February 1, 2003. OEH is currently evaluating the provisions of FIN No. 46 as it relates to OEH's various investments.

In
addition, on April 30, 2003, the Financial Accounting Standards Board issued SFAS No. 149, Amendment of Statement No. 133 on Derivative Instruments and Hedging
Activities. The statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. OEH will adopt SFAS No. 149 for all derivative instruments entered into after September 30, 2003. Management does not expect adoption of this statement to have a material
effect on OEH's financial condition or results of operations.

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Finally,
in May 2003, the Financial Accounting Standards Board issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities
and Equities, which establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equities. SFAS No. 150 applies
specifically to a number of financial instruments that issuers have historically presented in their financial statements as equity, or between the liabilities and equity sections of the balance sheet,
rather than as liabilities. Generally, SFAS No. 150 is effective for financial instruments issued or modified after May 31, 2003 and is otherwise effective for interim periods beginning
after June 15, 2003. The adoption of the provisions of SFAS No. 150 did not have a material effect on the Company's consolidated statements.

CRITICAL ACCOUNTING POLICIES

For a discussion of these, see under the heading "Critical Accounting Policies" in Item 7Management's Discussion and Analysis in the Company's 2002
Form 10-K annual report.

DISCLOSURE CONTROLS AND PROCEDURES

The Company's chief executive and financial officers have evaluated the effectiveness of the Company's disclosure controls and procedures as of
September 30, 2003 and found no material deficiencies or weaknesses.

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PART IIOTHER INFORMATION

ITEM 6.    Exhibits and Reports on Form 8-K

(a)  Exhibits.    The index to exhibits appears below, on the page immediately following the signature page to this report.

(b)  Reports
on Form 8-K.    During the quarter for which this report is filed, the Company filed the following Form 8-K
Current Report:

|Date of Report |  | Item No. |  | Description                                              
|-------------- |  | -------- |  | ---------------------------------------------------------
|August 6, 2003 |  | 7 and 12 |  | Second quarter 2003 earnings news release of the Company.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

| |  | ORIENT-EXPRESS HOTELS LTD.
| |  | --------------------------
| |  | By:                       

Dated:
November 12, 2003

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EXHIBIT INDEX

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