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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Commission file number 1-16017

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

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 April 30, 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.

PART I—FINANCIAL INFORMATION

Orient-Express Hotels Ltd. and Subsidiaries

Consolidated Balance Sheets

See notes to consolidated financial statements.

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Orient-Express Hotels Ltd. and Subsidiaries

Statements of Consolidated Operations (unaudited)

See notes to consolidated financial statements.

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Orient-Express Hotels Ltd. and Subsidiaries

Statements of Consolidated Cash Flows (unaudited)

See notes to consolidated financial statements.

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Orient-Express Hotels Ltd. and Subsidiaries

Statements of Consolidated Shareholders' Equity (unaudited)

See notes to consolidated financial statements.

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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 March 31, 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 Standard and "FIN" means Financial 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 months ended March 31, 2003 and 2002, which are all of a normal recurring nature, have been reflected in the information provided.

(b)    Net (losses) earnings per share

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

        For the three months ended March 31, 2003 and 2002, the anti-dilutive effect of stock options on 279,307 and 34,711 class A common shares, respectively, was excluded from the computation of diluted earnings per share.

(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 and No. 138. For the three months ended March 31, 2003 and 2002, the change in the fair market value of derivative instruments resulted in a credit of $83,000 and a charge of $844,000, respectively, to other comprehensive income/(loss).

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

(d)    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

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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 (losses) earnings and (losses) earnings per share would have been reported as follows (dollars in thousands, except in share amounts):

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

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2.    Significant 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 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 proforma impact on results, had these acquisitions occurred on January 1, 2002, is not material.

3.    Property, plant and equipment

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

        At March 31, 2003, the balance under capital lease for land and buildings was $9,610,000 (December 31, 2002—$9,527,000), for machinery and equipment $2,075,000 (December 31, 2002—$2,039,000), and for fixtures and fittings $950,000 (December 31, 2002—$945,000). Accumulated depreciation related to assets under capital lease at March 31, 2003 was $1,220,000 (December 31, 2002—$1,075,000).

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4.    Long-term debt and obligations under capital lease

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

        Certain credit agreements of OEH have restrictive covenants. At March 31, 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.

        The following is a summary of the aggregate maturities of long-term debt, including obligations under capital lease, at March 31, 2003 (dollars in thousands):

        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.

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5.    Income taxes

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

        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):

        The deferred tax assets consists 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.

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6.    Supplemental cash flow information
        (Dollars in thousands):

7.    Commitments

        Outstanding contracts to purchase fixed assets were approximately $7,000,000 at March 31, 2003 (December 31, 2002—$10,100,000).

8.    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):

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