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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 March 31, 2002

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.)41 Cedar Avenue
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

As
of April 30, 2002, 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 subsidiaries of Orient-Express Hotels Ltd. and 16,091,401 Class A shares and 2,459,399 Class B shares owned by Sea Containers Ltd.

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PART I        Orient-Express Hotels Ltd. and Subsidiaries  Consolidated Balance Sheets

|                                                                                    |                                     | March 31,
2002 |         | December 31,
2001 |  
|----------------------------------------------------------------------------------- | ----------------------------------- | -------------- | ------- | ----------------- | -
|
|Assets                                                                              |                                     |                |         |                   |  
|Cash and cash equivalents                                                           |                                     | $              | 22,306  |                   | $
|Accounts receivable, net of allowances of $450 and $514                             |                                     |                | 52,075  |                   |  
|Inventories                                                                         |                                     |                | 18,498  |                   |  
|                                                                                    |                                     |                |         |                   |  
|Total current assets                                                                |                                     |                | 92,879  |                   |  
|Property, plant and equipment, less accumulated depreciation of $85,677 and $81,741 |                                     |                | 666,737 |                   |  
|Investments                                                                         |                                     |                | 81,785  |                   |  
|Intangible assets                                                                   |                                     |                | 29,529  |                   |  
|Other assets                                                                        |                                     |                | 2,599   |                   |  
|                                                                                    |                                     |                |         |                   |  
|                                                                                    |                                     | $              | 873,529 |                   | $
|                                                                                    |                                     |                |         |                   |  
|Liabilities and Shareholders' Equity                                                |                                     |                |         |                   |  
|Working capital facilities                                                          |                                     | $              | 11,810  |                   | $
|Accounts payable                                                                    |                                     |                | 17,312  |                   |  
|Accrued liabilities                                                                 |                                     |                | 38,997  |                   |  
|Deferred revenue                                                                    |                                     |                | 16,612  |                   |  
|Current portion of long-term debt                                                   |                                     |                | 55,598  |                   |  
|                                                                                    |                                     |                |         |                   |  
|Total current liabilities                                                           |                                     |                | 140,329 |                   |  
|Long-term debt                                                                      |                                     |                | 331,243 |                   |  
|Deferred income taxes                                                               |                                     |                | 4,007   |                   |  
|                                                                                    |                                     |                |         |                   |  
|                                                                                    |                                     |                | 475,579 |                   |  
|                                                                                    |                                     |                |         |                   |  
|Minority interest                                                                   |                                     |                | 3,769   |                   |  
|                                                                                    |                                     |                |         |                   |  
|Preferred shares $0.01 par value (30,000,000 shares authorized)                     |                                     |                |        |                   |  
|                                                                                    |                                     |                |         |                   |  
|Shareholders' equity:                                                               |                                     |                |         |                   |  
|Class A common shares $0.01 par value (120,000,000 shares authorized):              |                                     |                |         |                   |  
|                                                                                    | Issued28,340,601 (200128,340,601) |                |         | 283               |  
|Class B common shares $0.01 par value (120,000,000 shares authorized):              |                                     |                |         |                   |  
|                                                                                    | Issued20,503,877 (200120,503,877) |                |         | 205               |  
|Additional paid-in capital                                                          |                                     |                | 226,963 |                   |  
|Retained earnings                                                                   |                                     |                | 204,021 |                   |  
|Accumulated other comprehensive loss                                                |                                     |                | (37,110 | )                 |  
|Less: reduction due to class B common shares owned by subsidiaries18,044,478       |                                     |                | (181    | )                 |  
|                                                                                    |                                     |                |         |                   |  
|Total shareholders' equity                                                          |                                     |                | 394,181 |                   |  
|                                                                                    |                                     |                |         |                   |  
|Commitments and contingencies                                                       |                                     |                |         |                   |  
|                                                                                    |                                     | $              | 873,529 |                   | $
|                                                                                    |                                     |                |         |                   |  

See
notes to consolidated financial statements.



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

|                                                   |                                     | Three months ended March 31, |       
|-------------------------------------------------- | ----------------------------------- | ---------------------------- | ------
|
|
|Revenue                                            |                                     | $                            | 51,689
|Earnings from unconsolidated companies             |                                     |                              | 1,981 
|                                                   |                                     |                              |       
|                                                   |                                     |                              | 53,670
|                                                   |                                     |                              |       
|Expenses:                                          |                                     |                              |       
|                                                   | Depreciation and amortization       |                              |       
|                                                   | Operating                           |                              |       
|                                                   | Selling, general and administrative |                              |       
|                                                   |                                     |                              |       
|Total expenses                                     |                                     |                              | 48,335
|                                                   |                                     |                              |       
|Earnings from operations before net finance costs  |                                     |                              | 5,335 
|Interest expense, net                              |                                     |                              | (4,824
|Interest and related income                        |                                     |                              | 1     
|                                                   |                                     |                              |       
|Net finance costs                                  |                                     |                              | (4,823
|                                                   |                                     |                              |       
|Earnings before income taxes                       |                                     |                              | 512   
|Provision for income taxes                         |                                     |                              | 72    
|                                                   |                                     |                              |       
|Net earnings                                       |                                     | $                            | 440   
|                                                   |                                     |                              |       
|Net earnings per class A and class B common share: |                                     |                              |       
|                                                   | Basic and diluted                   |                              | $     
|                                                   |                                     |                              |       

See
notes to consolidated financial statements.



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

|                                                    |                                                                                     | Three months ended March 31,               |        
|--------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------------ | -------
|
|
|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 and other non-cash items                       |                                            |        
|                                                    | Change in assets and liabilities net of effects from acquisition of subsidiaries:   |                                            |        
|                                                    |                                                                                     | Decrease/(increase) in accounts receivable |        
|                                                    |                                                                                     | Increase in inventories                    |        
|                                                    |                                                                                     | (Decrease)/increase in accounts payable    |        
|                                                    |                                                                                     |                                            |        
|                                                    | Total adjustments                                                                   |                                            |        
|                                                    |                                                                                     |                                            |        
|Net cash (used in)/provided by operating activities |                                                                                     |                                            | (1,630 
|                                                    |                                                                                     |                                            |        
|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               |                                                                                     |                                            | (58,421
|                                                    |                                                                                     |                                            |        
|Cash flows from financing activities:               |                                                                                     |                                            |        
|                                                    | Working capital facilities and redrawable loans drawn                               |                                            |        
|                                                    | Issuance of long-term debt                                                          |                                            |        
|                                                    | Principal payments under long-term debt                                             |                                            |        
|                                                    |                                                                                     |                                            |        
|Net cash provided by financing activities           |                                                                                     |                                            | 24,703 
|                                                    |                                                                                     |                                            |        
|Total cash flows                                    |                                                                                     |                                            | (35,348
|Effect of exchange rate changes on cash             |                                                                                     |                                            | (209   
|                                                    |                                                                                     |                                            |        
|Net (decrease)/increase in cash                     |                                                                                     |                                            | (35,557
|Cash and cash equivalents at beginning of period    |                                                                                     |                                            | 57,863 
|                                                    |                                                                                     |                                            |        
|Cash and cash equivalents at end of period          |                                                                                     | $                                          | 22,306 
|                                                    |                                                                                     |                                            |        

See
notes to consolidated financial statements.



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

|                         |                                              | 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
Subsidiaries |     | Total
Comprehensive
Income (Loss)
|------------------------ | -------------------------------------------- | ---------------------------------- | --- | ---------------------------------- | - | -------------------------- |  | ----------------- | ------- | --------------------------------------------- | - | ----------------------------------- | --- | ---------------------------------
|
|Balance, January 1, 2002 |                                              | $                                  | 283 |                                    | $ | 205                        |  | $                 | 226,963 |                                               | $ | 203,581                             |     | $                                
|Comprehensive income:    |                                              |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     |     |                                  
|                         | Net earnings on common shares for the period |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     | 440 |                                  
|                         | Other comprehensive income                   |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     |     |                                  
|                         |                                              |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     |     |                                  
|                         |                                              |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     |     |                                  
|                         |                                              |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     |     |                                  
|Balance, March 31, 2002  |                                              | $                                  | 283 |                                    | $ | 205                        |  | $                 | 226,963 |                                               | $ | 204,021                             |     | $                                
|                         |                                              |                                    |     |                                    |   |                            |  |                   |         |                                               |   |                                     |     |                                  

See notes to consolidated financial statements.



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

1. Basis of financial statement presentation

(a) Accounting policies

Orient-Express Hotels Ltd. (the "Company") is a majority-owned subsidiary of Sea Containers Ltd. ("SCL"). The Company and its
subsidiaries are referred to collectively as "OEH".

For
a description of significant accounting policies and basis of presentation, see Notes 1 and 13 to the consolidated financial statements in the 2001 Form 10-K
annual report.

In
the opinion of management, all adjustments necessary for a fair statement of the results of operations for the three months ended March 31, 2002 and 2001, 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):

|        |  | Three months ended March 31,
|------- |  | ----------------------------
|
|Basic   |  | 30,800                      
|Diluted |  | 30,800                      

(c) Intangible assets

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets, effective January 1, 2002.
Under SFAS No. 142, goodwill is no longer amortized but reviewed for impairment annually, or more frequently if certain indicators arise. The Company is required to complete the initial step of
a transitional impairment test within six months of adoption of SFAS No. 142 and to complete the final step of the transitional impairment test by the end of the fiscal year. Any impairment
loss resulting from the test would be recorded as a cumulative effect of a change in accounting principle. Subsequent impairment losses will be reflected in operating income or loss in the
consolidated statements of operations. The Company does not expect adoption of this statement to have a material effect on OEH's consolidated results of operations, financial position or cash flow.

Components
of intangible assets are as follows (dollars in thousands):

|                                        |  | March 31,
2002 |        | December 31,
2001
|--------------------------------------- |  | -------------- | ------ | -----------------
|Goodwill                                |  | $              | 2,918  |                  
|Other intangibles with indefinite lives |  |                | 32,504 |                  
|                                        |  |                |        |                  
|                                        |  |                | 35,422 |                  
|Accumulated amortization                |  |                | 5,893  |                  
|                                        |  |                |        |                  
|Total net intangibles                   |  | $              | 29,529 |                  
|                                        |  |                |        |                  

Other
intangibles consist primarily of trademarks associated with acquired businesses.

The
following proforma information reconciles the net earnings and earnings per share reported for the quarter ended March 31, 2001 to adjusted net earnings and earnings per share
which reflect the adoption of SFAS No. 142 (dollars in thousands, except per share amounts):

|                                                                                                |  | Three months ended March 31, 2001
|----------------------------------------------------------------------------------------------- |  | ---------------------------------
|Reported net earnings on common shares                                                          |  | $                                
|Add: Amortization of goodwill and other intangible assets with indefinite lives, net of tax     |  |                                  
|                                                                                                |  |                                  
|Adjusted net earnings                                                                           |  | $                                
|                                                                                                |  |                                  
|Reported basic and diluted earnings per share                                                   |  | $                                
|Add: Amortization of goodwill and other intangible assets with indefinite lives, net of tax per |  |                                  
|sharebasic and diluted                                                                         |  |                                  
|                                                                                                |  |                                  
|Adjusted basic and diluted earnings per share                                                   |  | $                                
|                                                                                                |  |                                  

(d) Derivative financial instruments

As reported in Note 1(t) to the financial statements in the Form 10-K annual report for the year ended December 31, 2001, 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 and No. 138. The
initial adoption of SFAS No. 133 resulted in an unrealized loss of $1,333,000 in accumulated other comprehensive income (loss) as of January 1, 2001. For the three months ended
March 31, 2002 and 2001, the change in the fair market value of derivative instruments resulted in a credit (charge) to other comprehensive income (loss) of $844,000 and $(48,000),
respectively.

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

|                                   |                                                                                              | Three months ended March 31, |      
|---------------------------------- | -------------------------------------------------------------------------------------------- | ---------------------------- | -----
|
|Net earnings on common shares      |                                                                                              | $                            | 440  
|Other comprehensive income (loss): |                                                                                              |                              |      
|                                   | Foreign currency translation adjustments                                                     |                              |      
|                                   | Cumulative effect of change in accounting principle (SFAS 133) on other comprehensive income |                              |      
|                                   | Changes in fair value of derivatives                                                         |                              |      
|                                   |                                                                                              |                              |      
|Comprehensive income/(loss)        |                                                                                              | $                            | 1,594
|                                   |                                                                                              |                              |      

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 and a 50%
interest in a group of four restaurants called Le Petit Blanc in England, all for 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
payable in March 2003 which is recorded in other liabilities at March 31, 2002.

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 date of acquisition. The proforma impact on results, had these acquisitions occurred on January 1, 2002, is not material.

3. Property, plant and equipment

The major classes of real estate and other fixed assets are as follows (dollars in thousands):

|                                        |  | March 31,
2002 |         | December 31,
2001
|--------------------------------------- |  | -------------- | ------- | -----------------
|Freehold and leased land and buildings  |  | $              | 553,484 |                  
|Machinery and equipment                 |  |                | 110,285 |                  
|Fixtures, fittings and office equipment |  |                | 72,457  |                  
|River cruiseship                        |  |                | 16,188  |                  
|                                        |  |                |         |                  
|                                        |  |                | 752,414 |                  
|Less: accumulated depreciation          |  |                | 85,677  |                  
|                                        |  |                |         |                  
|                                        |  | $              | 666,737 |                  
|                                        |  |                |         |                  

At
March 31, 2002, the balance under capital lease for land and buildings was $8,518,000 (December 31, 2001$8,574,000), for machinery and equipment $1,699,000
(December 31, 2001$1,675,000), and for fixtures and fittings $711,000 (December 31, 2001$716,000). Accumulated depreciation related to assets under capital
lease at March 31, 2002 was $619,000 (December 31, 2001$520,000).

4. Long-term debt

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

|                                                                                                                                                                                                        |  | March 31,
2002 |         | December 31,
2001
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | -----------------
|Loans from banks secured by property, plant and equipment payable over periods of 1 to 12 years, with a weighted average interest rate of 4.48 and 4.72 percent, respectively, primarily based on LIBOR |  | $              | 368,519 |                  
|Loan secured by a river cruiseship payable over 5 years, with a weighted average interest rate of 3.57 percent based on LIBOR                                                                           |  |                | 4,500   |                  
|Obligations under capital lease                                                                                                                                                                         |  |                | 13,822  |                  
|                                                                                                                                                                                                        |  |                |         |                  
|                                                                                                                                                                                                        |  |                | 386,841 |                  
|Less: current portion                                                                                                                                                                                   |  |                | 55,598  |                  
|                                                                                                                                                                                                        |  |                |         |                  
|                                                                                                                                                                                                        |  | $              | 331,243 |                  
|                                                                                                                                                                                                        |  |                |         |                  

Certain
credit agreements of OEH have restrictive covenants. At March 31, 2002, OEH was in compliance with these covenants.

The
following is a summary of the aggregate maturities of long-term debt, including obligations under capital leases, at March 31, 2002 (dollars in thousands):

|                    |  | Year ending
December 31,
|------------------- |  | ------------------------
|Remainder of 2003   |  | $                       
|2004                |  |                         
|2005                |  |                         
|2006                |  |                         
|2007 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.

5. Income taxes

Income taxes provided by OEH relate principally to its foreign subsidiaries as pre-tax income is primarily foreign. The provision for income taxes
consists of the following (dollars in thousands):

|              |  | Three months ended March 31, 2002 |    
|------------- |  | --------------------------------- | ---
|
|United States |  | $                                 | 110
|Other foreign |  |                                   | 751
|              |  |                                   |    
|              |  | $                                 | 861
|              |  |                                   |    

|              |  | Three months ended March 31, 2001
|------------- |  | ---------------------------------
|
|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):

|                             |  | March 31,
2002 |         | December 31,
2001 |  
|---------------------------- |  | -------------- | ------- | ----------------- | -
|Gross deferred tax assets    |  | $              | 56,290  |                   | $
|Less: Valuation allowance    |  |                | (35,143 | )                 |  
|                             |  |                |         |                   |  
|Net deferred tax assets      |  |                | 21,147  |                   |  
|Deferred tax liabilities     |  |                | (25,154 | )                 |  
|                             |  |                |         |                   |  
|Net deferred tax liabilities |  | $              | (4,007  | )                 | $
|                             |  |                |         |                   |  

The
deferred tax assets consist primarily of operating loss carryforwards. 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.

6. Supplemental cash flow information

|               |  | Three months ended March 31,
|-------------- |  | ----------------------------
|
|
|Cash paid for: |  |                             
|Interest       |  | $                           
|Income taxes   |  | $                           

In
conjunction with the acquisitions in 2002 (see Note 2), liabilities were assumed as follows relating to non-cash investing and financing activities:

|                              |  | Three months ended March 31,
|----------------------------- |  | ----------------------------
|
|
|Fair value of assets acquired |  | $                           
|Cash paid                     |  |                             
|                              |  |                             
|Liabilities assumed           |  | $                           
|                              |  |                             

7. Commitments

Outstanding contracts to purchase fixed assets were approximately $5,200,000 at March 31, 2002 (December 31, 2001$6,100,000).

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

As reported in the Company's 2001 Form 10-K annual report, OEH has two business 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):

|                                                   |                            | Three months ended March 31, |       
|-------------------------------------------------- | -------------------------- | ---------------------------- | ------
|
|Revenue:                                           |                            |                              |       
|                                                   | Hotels and restaurants     |                              | $     
|                                                   | Tourist trains and cruises |                              |       
|                                                   |                            |                              |       
|                                                   |                            | $                            | 51,689
|                                                   |                            |                              |       
|Earnings from unconsolidated companies:            |                            |                              |       
|                                                   | Hotels and restaurants     |                              | $     
|                                                   | Tourist trains and cruises |                              |       
|                                                   |                            |                              |       
|                                                   |                            | $                            | 1,981 
|                                                   |                            |                              |       
|Depreciation and amortization:                     |                            |                              |       
|                                                   | Hotels and restaurants     |                              | $     
|                                                   | Tourist trains and cruises |                              |       
|                                                   |                            |                              |       
|                                                   |                            | $                            | 4,345 
|                                                   |                            |                              |       
|Earnings from operations before net finance costs: |                            |                              |       
|                                                   | Hotels and restaurants     |                              | $     
|                                                   | Tourist trains and cruises |                              |       
|                                                   |                            |                              |       
|                                                   |                            |                              | 7,914 
|Central selling, general and administrative costs  |                            |                              | (2,579
|                                                   |                            |                              |       
|                                                   |                            |                              | 5,335 
|Net finance costs                                  |                            |                              | (4,823
|                                                   |                            |                              |       
|Earnings before income taxes                       |                            |                              | 512   
|Provision for income taxes                         |                            |                              | 72    
|                                                   |                            |                              |       
|Net earnings                                       |                            | $                            | 440   
|                                                   |                            |                              |       
|Capital expenditure:                               |                            |                              |       
|                                                   | Hotels and restaurants     |                              | $     
|                                                   | Tourist trains and cruises |                              |       
|                                                   |                            |                              |       
|                                                   |                            | $                            | 11,140
|                                                   |                            |                              |       

|                     |                            | March 31, 2002 |         | December 31, 2001
|-------------------- | -------------------------- | -------------- | ------- | -----------------
|Identifiable assets: |                            |                |         |                  
|                     | Hotels and restaurants     |                | $       | 780,962          
|                     | Tourist trains and cruises |                |         | 92,567           
|                     |                            |                |         |                  
|                     |                            | $              | 873,529 |                  
|                     |                            |                |         |                  



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

|         |                   | Three months ended March 31,
|-------- | ----------------- | ----------------------------
|
|Revenue: |                   |                             
|         | Europe            |                             
|         | North America     |                             
|         | Rest of the world |                             
|         |                   |                             
|         |                   | $                           
|         |                   |                             

|                                 |                   | March 31, 2002 |         | December 31, 2001
|-------------------------------- | ----------------- | -------------- | ------- | -----------------
|Long-lived assets at book value: |                   |                |         |                  
|                                 | Europe            |                | $       | 292,817          
|                                 | North America     |                |         | 256,029          
|                                 | Rest of the world |                |         | 229,205          
|                                 |                   |                |         |                  
|                                 |                   | $              | 778,051 |                  
|                                 |                   |                |         |                  

9. Related party transactions

For the three months ended March 31, 2002, OEH paid subsidiaries of SCL $1,500,000 (2001$1,406,000) 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 an aggregate principal amount of $162,532,000 of bank loans to OEH outstanding at March 31, 2002 (December 31, 2001$171,401,000), including
a bank loan of $7,500,000 to Charleston Center LLC, owner of Charleston Place Hotel, and a $2,000,000 bank loan to Eastern & Oriental Express Ltd. in which OEH has minority shareholder
interests.

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

RESULTS OF OPERATIONS

OEH's operating results for the three months ended March 31, 2002 and March 31, 2001, expressed as a percentage of revenue, were as follows:

|                                              |                                     | Three months ended March 31 |   
|--------------------------------------------- | ----------------------------------- | --------------------------- | --
|
|Revenue:                                      |                                     |                             | % 
|                                              | Hotels and restaurants              |                             | 90
|                                              | Tourist trains and cruises          |                             | 10
|                                              |                                     |                             |   
|                                              |                                     | 100                         |   
|Expenses:                                     |                                     |                             |   
|                                              | Depreciation and amortization       |                             | 8 
|                                              | Operating                           |                             | 46
|                                              | Selling, general and administrative |                             | 36
|Net finance costs                             |                                     | 9                           |   
|                                              |                                     |                             |   
|Earnings before income taxes                  |                                     | 1                           |   
|Provision of income taxes                     |                                     |                            |   
|                                              |                                     |                             |   
|Net earnings as a percentage of total revenue |                                     | 1                           |   
|                                              |                                     |                             |   



The
revenues and earnings before interest, tax, depreciation and amortization ("EBITDA") of OEH's operations for the three months ended March 31, 2002 and March 31, 2001
are analyzed as follows (dollars in millions):

|             |                            | Three months ended March 31 |     
|------------ | -------------------------- | --------------------------- | ----
|
|Revenue:     |                            |                             |     
|             | Owned Hotels:              |                             |     
|             |                            | Europe                      |     
|             |                            | North America               |     
|             |                            | Rest of the world           |     
|             | Hotel management interests |                             |     
|             | Restaurants                |                             |     
|             | Tourist trains and cruises |                             |     
|             |                            |                             |     
|Total        |                            | $                           | 53.7
|             |                            |                             |     
|EBITDA:      |                            |                             |     
|             | Owned Hotels:              |                             |     
|             |                            | Europe                      |     
|             |                            | North America               |     
|             |                            | Rest of the world           |     
|             | Hotel management interests |                             |     
|             | Restaurants                |                             |     
|             | Tourist trains and cruises |                             |     
|             | Central overheads          |                             |     
|             |                            |                             |     
|Total EBITDA |                            | $                           | 9.7 
|             |                            |                             |     

Three Months Ended March 31, 2002 Compared To Three Months Ended March 31, 2001

Revenue

Total revenue, including earnings from unconsolidated companies, decreased by $4.2 million, or 7%, from $57.9 million in the three months ended
March 31, 2001 to $53.7 million in the three months ended March 31, 2002. Hotels and restaurants revenue decreased by $2.8 million, or 5%, from $51.2 million in the
three months ended March 31, 2001 to $48.4 million in the three months ended March 31, 2002, and tourist trains and cruises decreased by $1.4 million, or 21%, from
$6.7 million for the three months ended March 31, 2001 to $5.3 million for the three months ended March 31, 2002.

The
revenue decrease for hotels and restaurants was due to a decrease at OEH's owned hotels of $2.5 million, or 6%, from $43.9 million in the three months ended
March 31, 2001 to $41.4 million in the three months ended March 31, 2002. Excluding the effect of acquisitions, the revenue decrease was $6.4 million, or 15%, from
$43.9 million in the three months ended March 31, 2001 to $37.5 million in the three months ended March 31, 2002. The revenue decrease at the hotels was mainly due to the
lingering effect on travel and tourism following September 11, 2001, although underlying trends have shown a significant recovery over the fourth quarter. Overall on a comparable basis, OEH's
REVPAR (that is, revenue per available room) at its owned hotels declined by 12% in U.S. dollars in the three months ended March 31, 2002. This is a substantial improvement over the 17% decline
experienced in the three months ended December 31, 2001. The revenue decrease for hotel management interests was $0.1 million, or 4%, from $2.5 million in the three months ended March 31, 2001 to $2.4 million in the three months ended March 31, 2002. The revenue decrease at
OEH's restaurants was $0.2 million, or 4%, from $4.8 million in the three months ended March 31, 2001 to $4.6 million in the three months ended March 31, 2002.

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

Europe.Revenue increased by $1.2 million, or 13%, from $9.1 million for the three months ended
March 31, 2001 to $10.3 million for the three months ended March 31, 2002. The acquisitions of La Residencia in Mallorca, Spain and Le Manoir aux Quat' Saisons in Oxfordshire, England,
during the
quarter accounted for $2.2 million. Excluding the effect of these acquisitions, revenue declined by $1.0 million. REVPAR on a comparable basis decreased by 4% in local currencies in the
three months ended March 31, 2002 compared to the three months ended March 31, 2001.

North America.Revenue decreased by $2.7 million, or 14%, from $19.3 million in the three months ended
March 31, 2001 to $16.6 million in the three months ended March 31, 2002. REVPAR on a comparable basis for the North American region declined by 9% in the three months ended
March 31, 2002 compared to the three months ended March 31, 2001.

Rest of the World.Revenue decreased by $1.0 million, or 6%, from $15.5 million in the three months ended
March 31, 2001 to $14.5 million in the three months ended March 31, 2002. The acquisition of the Bora Bora Lagoon Resort and Miraflores Park Hotel accounted for
$1.7 million of revenue in the three months ended March 31, 2002. Excluding the effect of these acquisitions, revenue decreased by $2.7 million. The REVPAR on a comparable basis
for the rest of the world region decreased by 8% in local currencies in the three months ended March 31, 2002 compared to the three months ended March 31, 2001.

Depreciation and Amortization

Depreciation and amortization increased by $0.4 million, or 10%, from $3.9 million in the three months ended March 31, 2001 to
$4.3 million in the three months ended March 31, 2002, primarily due to the effect of acquisitions offset by a decrease in amortization due to the change in accounting policy described
in Note 1(c).

Operating Expenses

Operating expenses decreased by $1.5 million, or 6%, from $26.3 million in the three months ended March 31, 2001 to $24.8 million in
the three months ended March 31, 2002. Excluding the effect of acquisitions, operating expenses reduced by $3.6 million. The decrease was primarily due to reduced occupancy at the hotels
as discussed above.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $2.2 million, or 13%, from $17.0 million in the three months ended March 31, 2001
to $19.2 million in the three months ended March 31, 2002. Excluding the effect of acquisitions, selling, general and administrative expenses were in line with 2001.

Earnings from Operations

Earnings from operations decreased by $5.4 million, or 50%, from $10.7 million in the three months ended March 31, 2001 to
$5.3 million in the three months ended March 31, 2002. Earnings from operations represent total revenue less depreciation and amortization, operating expenses and selling, general and
administrative expenses.

Net Finance Costs

Net finance costs decreased by $0.3 million, or 6%, from $5.1 million in the three months ended March 31, 2001 to $4.8 million in the
three months ended March 31, 2002, primarily due to lower interest rates partly offset by increases in debt relating to capital expenditures and acquisitions financed in 2001 and 2002.

Taxes on Income

The provision for income taxes decreased by $0.6 million, or 86%, from $0.7 million in the three months ended March 31, 2001 to
$0.1 million in the three months ended March 31, 2002. The Company is incorporated in Bermuda, which does not impose an income tax. Accordingly, the entire income tax provision was
attributable to income tax charges incurred by subsidiaries operating in jurisdictions that impose an income tax. The decrease of $0.6 million was mainly due to the reduced profitability of
some of these subsidiaries.

Net Earnings

Net earnings decreased by $4.5 million, or 92%, from $4.9 million in the three months ended March 31, 2001 to $0.4 million in the
three months ended March 31, 2002. Net earnings represents earnings from operations less net finance costs and provision for income taxes.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

OEH had cash and cash equivalents of $22.3 million at March 31, 2002, $35.6 million less than the $57.9 million at December 31,
2001. At March 31, 2002 and December 31, 2001, the undrawn amounts available to OEH under its short-term lines of credit were $31.0 million and $30.9 million,
respectively. In addition OEH has available to draw under long-term facilities a further $24.0 million, bringing its total cash and availability to $77.3 million at
March 31, 2002.

Current
assets less current liabilities, including the current portion of long-term debt, resulted in a working capital deficit of $47.5 million at March 31,
2002, a decrease in working capital of $36.9 million from a deficit of $10.6 million at December 31, 2001. The overall decrease in working capital was comprised of the following:



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

Cash Flow

Operating Activities.Net cash provided by operating activities decreased by $8.7 million to $1.6 million cash
deficit on operating activities for the three months ended March, 2002, from cash provided by operating activities of $7.1 million for the three months ended March 31, 2001. The decrease
is primarily attributable to reduced earnings and timing on payments to creditors.

Investing Activities.Cash used in investing activities increased by $41.2 million to $58.4 million for the
three months ended March 31, 2002, compared to $17.2 million for the three months ended March 31, 2001. The principal components of this increase were a $40.4 million
increase in expenditure on acquisitions and investments during the period from $7.0 million to $47.4 million and a $1.0 million increase in capital expenditure.

Financing Activities.Cash provided from financing activities for the three month period ended March 31, 2002 was
$24.7 million as compared to cash provided by financing activities of $18.1 million for the three month period ended March 31, 2001, an increase of $6.6 million. In the
three month period ended March 31, 2002, OEH had proceeds from borrowings under long-term debt of $26.4 million as compared to proceeds of $25.4 million for the three
month period ended March 31, 2001. The proceeds of long-term debt were used to fund acquisitions, investments and capital expenditures during the period.

Capital Commitments.There were $5.2 million of capital commitments outstanding as of March 31, 2002.

Indebtedness

At March 31, 2002, OEH had $386.8 million of long-term debt ($364.5 million net of cash), including the current portion, secured
by assets which is repayable over periods of one to 12 years with a weighted average interest rate of 4.51%. See Note 4 to the Financial Statements regarding the maturity of
long-term debt.

Approximately
38% of the outstanding principal was drawn in European euros and the balance primarily in U.S. dollars. At March 31, 2002, OEH had the equivalent of
$102 million of floating rate euro debt which had been swapped in to fixed rate euro debt that will convert back to floating rates in September 2002. At March 31, 2002, all other
borrowings of OEH were in floating interest 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. At March 31, 2002, OEH had capital commitments of $5.2 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 expenditure, acquisitions and debt service
for the foreseeable future.

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 its 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. In September 2000, OEH entered into an interest rate swap, which exchanged floating rate euro debt for fixed rate euro debt in respect
of the equivalent of euro 117 million ($102 million at March 31, 2002). If interest rates increased by ten percent, with all other variables held constant, annual net finance
costs of OEH would have increased by approximately $1.3 million based on borrowings at March 31, 2002. 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 fair value of the interest rate swap agreement at March 31, 2002 was a loss of
$0.9 million.

The
market risk relating to foreign currencies and its effects have not changed materially during the first quarter of 2002 from those described in the Company's 2001
Form 10-K report.

RECENT ACCOUNTING PRONOUNCEMENTS

For a discussion of OEH's adoption of recent accounting pronouncements, see Note 1 to the Financial Statements.

ACCOUNTING POLICIES AND ESTIMATES

During the three months ended March 31, 2002, there were no significant changes in accounting policies.

PART II

ITEM 1. Legal Proceedings

As previously reported, the Company had been named defendant in a lawsuit in New York state court by investors alleging to be holders of publicly traded senior
notes of Sea Containers Ltd. and claiming, inter alia, certain defaults under the indentures governing those notes have occurred or would occur because of a proposed spinoff distribution of the
Company's shares by Sea Containers Ltd. The suit was dismissed by the court on June 15, 2001 primarily because the plaintiffs failed to comply with the pre-suit requirements
in the indentures and lacked standing to sue. The plaintiffs filed notices of intention to appeal the dismissal with the New York Appellate Division on August 2, 2001, and filed their initial
brief in the appeal on May 1, 2002. The Company understands that Sea Containers continues to believe the allegations of the plaintiffs are without merit, and therefore Sea Containers will
oppose vigorously
any litigation relating to the proposed spinoff. Sea Containers is also indemnifying OEH with respect to possible losses arising from this lawsuit.

Other
than the foregoing litigation, the Company is involved in no material legal proceedings, other than ordinary routine litigation incidental to its business.

ITEM 5. Other Information

In August 2001, the Company registered with the Commission (Registration Statement No. 333-67268) a public secondary offering by Sea
Containers Ltd. of up to 5,000,000 existing class A common shares of the Company. Sea Containers has advised the Company that, during the three months ended March 31, 2002, it
sold 674,000 of the shares at market prices prevailing at the times of sale, realizing net proceeds of about $12,680,000, and that the sales were made in ordinary broker transactions at normal
brokerage commissions through Salomon Smith Barney Inc. Sea Containers is bearing all costs and expenses of this offering, and the Company will receive none of the sale proceeds.

ITEM 6. Exhibits and Reports on Form 8-K



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: May 14, 2002

EXHIBIT INDEX



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