Orient-Express Hotels to Acquire Two Award Winning Hotels in Sicily

Grand Hotel Timeo and Villa Sant'Andrea, Taormina

HAMILTON, Bermuda, January 11 - Orient-Express Hotels Ltd. (NYSE: OEH, www.orient-express.com),
owners or part-owners and managers of 50 luxury hotel, restaurant, tourist
train and river cruise properties operating in 25 countries, today announced
expansion plans in Italy. The Company has signed a binding agreement to
purchase two distinctive properties in Taormina, Sicily from The Framon Group
subject to completion conditions.

The 83-key Grand Hotel Timeo (www.grandhoteltimeo.com) is widely
considered the most luxurious hotel in Taormina and the nearby 78-key Villa
Sant'Andrea (www.villasantandreahotel.com) has a private beach on the
Bay of Mazzaro. Under the agreement, scheduled for completion in late
January, Orient-Express Hotels will acquire both properties for a combined
price of EUR81million ($117 million) including the assumption of existing
financing of EUR44 million ($64 million), a new medium term bank loan of EUR6
million ($9 million) and vendor financing of EUR5 million ($7 million). The
Company plans to invest EUR11 million ($16 million) in a major refurbishment
program, to take place over three consecutive winter closures. The hotels
will reopen to Orient-Express Hotels' standard in time for the 2010 summer
season.

Commenting on the transaction, Paul White, President and Chief Executive
of Orient-Express Hotels said, "Having significantly strengthened our balance
sheet in 2009 through the sale of non-core assets, we have identified this
rare opportunity to acquire the internationally renowned Grand Hotel Timeo,
with its sister hotel, Villa Sant'Andrea. Elements of this transaction meet
every one of Orient-Express Hotels' investment criteria, including the unique
and iconic status of the Grand Hotel Timeo; the location of the properties
not only in Sicily, one of Italy's fast growing tourist destinations, but in
Taormina itself; the financial upside; and of course, barriers to entry.

"These hotels typify Orient-Express Hotels' core business - established
properties with history and personality. Currently, they both punch below
their weight and because they occupy a premier position in the Sicilian
market, we are confident we can make significant improvements in performance,
as we integrate the properties into the Orient-Express Hotels collection and
bring RevPAR and operating margins in line with our existing Italian
portfolio," White continued.

"Our prudent approach to funding this financially accretive acquisition,
along with the Company's continued disposal of non-core assets and sales of
developed Real Estate, should ensure that we remain on track to achieve our
key financial objective of deleveraging the Company's balance sheet by the
end of 2011."

Sicily

Sicily, the largest Mediterranean island, has been growing in popularity
as a tourist destination and was recently voted Conde Nast Traveller UK
Readers' favorite holiday destination in the magazine's 2009 Travel Awards.
The Grand Hotel Timeo is adjacent to one of the city's most famous
attractions, the legendary Greek Theater, which dates back to the 2nd century
AD. Below, looking out across the sea, Villa Sant'Andrea, built in 1830, is
right on the beach. The two properties, linked by a private shuttle, have the
synergy of Hotel Splendido and Splendido Mare, giving guests the best of both
worlds Taormina has to offer. The city has good transport links and is
located 40 minutes from Catania International Airport, which has direct
flights to all major European cities and good connections to those serving
the US.

Grand Hotel Timeo

Built in 1873, the Grand Hotel Timeo occupies an excellent position in
the historical center of the city. From the hotel's panoramic terrace, guests
can admire spectacular views of Mount Etna and the coastline. Since the 19th
century and the era of the Grand Tour, the hotel has been popular with an
elite group of international travellers, who choose to vacation here. Each
guest room has its own terrace and the hotel's 'Il Dito e la Luna' restaurant
specializes in regional Sicilian cuisine, in elegant surroundings.

The Company anticipates that post refurbishment, The Grand Hotel Timeo
will trade at RevPAR levels closer to those of its key Italian properties,
Hotel Cipriani in Venice and Hotel Splendido in Portofino.

Villa Sant'Andrea

Villa Sant'Andrea is located on the Bay of Mazzaro, the heart of
Taormina's seaside district. The atmosphere is that of a private villa set in
lush gardens, with a private beach. Several of the hotel's suites open onto a
private terrace. The 'Oliviero' restaurant, on a panoramic terrace
overlooking the Calabrian coast, is known for its fish and seafood
specialities.

The Company anticipates that the Villa Sant'Andrea will trade, post the
refurbishment which will lift it into a category of its own among the
beachfront hotels, at RevPAR levels closer to those achieved at its
properties Hotel Caruso in Ravello and Villa San Michele in Florence.

Development Land

At present, value has not been assigned to potential development land, as
planning regulations in Italy are stringent. The Grand Hotel Timeo is built
in 270,000 square feet of parkland and, although planning regulations forbid
further development on the beach, opportunities still exist at Villa
Sant'Andrea to build an additional 12 keys and a swimming pool. It is
intended to pursue permits for development as previously presented to the
authorities. The Company has agreed payment of a further EUR5 million ($7
million) to the vendors, should permits be granted to expand Villa
Sant'Andrea and additional rooms constructed at the Grand Hotel Timeo.

Orient-Express Hotels in Italy

The successful completion of this transaction would bring the number of
Orient-Express properties in Italy to eight. These include Hotel Cipriani and
Palazzo Vendramin in Venice, Villa San Michele in Florence, Hotel Splendido
and Splendido Mare in Portofino and Hotel Caruso in Ravello. Operating
synergies, including marketing, sales, reservations, administration and
engineering will assist in maximizing the earnings potential as the Company
exits this challenging earnings cycle.

Note to Editors

Grand Hotel Timeo and Villa Sant'Andrea have been listed among the
World's Best Hotels by readers of Travel and Leisure in both 2009 and 2010.
The Andrew Harper Collection rates Grand Hotel Timeo as Sicily's best hotel.

This news release and related oral presentations by management contain,
in addition to historical information, forward-looking statements that
involve risks and uncertainties. These include statements regarding earnings
outlook, investment plans and similar matters that are not historical facts.
These statements are based on management's current expectations and are
subject to a number of uncertainties and risks that could cause actual
results to differ materially from those described in the forward-looking
statements. Factors that may cause a difference include, but are not limited
to, those mentioned in the news release, unknown effects on the travel and
leisure markets of terrorist activity and any police or military response,
varying customer demand and competitive considerations, failure to realize
hotel bookings and reservations as actual revenue, inability to sustain price
increases or to reduce costs, rising fuel costs adversely impacting customer
travel and the Company's operating costs, fluctuations in interest rates and
currency values, adequate sources of capital and acceptability of finance
terms made more difficult by the current crisis in financial markets and by
weakening national economies, possible loss or amendment of planning permits
and delays in construction schedules for expansion projects, delays in
reopening after closing for repair or refurbishment and possible cost
overruns, shifting patterns of tourism and business travel and seasonality of
demand, adverse local weather conditions, changing global and regional
economic conditions in many parts of the world and weakness in financial
markets, and legislative, regulatory and political developments. Further
information regarding these and other factors is included in the filings by
the company with the U.S. Securities and Exchange Commission.

    Contact:

    Martin O'Grady
    Vice President, Chief Financial Officer
    Tel: +44-20-7921-4038
    E: martin.ogrady@orient-express.com

    Pippa Isbell
    Vice President, Corporate Communications
    Tel: +44-20-7921-4065
    E: pippa.isbell@orient-express.com

Contact: Martin O'Grady, Vice President, Chief Financial Officer, Tel: +44-20-7921-4038, E: martin.ogrady at orient-express.com. Pippa Isbell, Vice President, Corporate Communications, Tel: +44-20-7921-4065, E: pippa.isbell at orient-express.com