FOUR SEASONS HOTELS RESULTS FOR 1st QUARTER

Source: Four Seasons Hotels, Inc.

April 29, 1999
Four Seasons Hotels Inc. (TSE:FSH.) (ME:FSH.) (NYSE:FS) has reported its results for the first quarter ended March 31, 1999. Net earnings increased 30 percent to $10.1 million ($0.30 basic and fully diluted earnings per share) for the three months ended March 31, 1999, as compared to $7.7 million ($0.23 basic and fully diluted earnings per share) for the first quarter of 1998.

"The strong financial performance realized in the first quarter reflects fee revenue growth from new and recently opened hotels and from hotels that are currently under construction," commented Isadore Sharp, Chairman and Chief Executive Officer. "Over the next three years Four Seasons expects to undertake the largest expansion of its hotel and resort portfolio in its history. This expansion of hotels and resorts under management and our brand extension into luxury vacation ownership resorts is expected to result in continued strong financial performance in the years ahead."

Total fee revenues increased more than 18 percent to $32.9 million in the first quarter of 1999, as compared to $27.8 million in the first quarter of 1998. Consistent with the Company's business plan, the majority of the growth in fee revenues was attributable to increased fees from new projects or recently opened hotels. Total revenues of all managed hotels increased to $553.5 million for the quarter ended March 31, 1999, compared to $521.6 million for the same period in 1998.

Hotel management earnings, before depreciation and amortization, for the first quarter of 1999 increased 13.3 percent to $19.1 million, as compared to $16.9 million in the first quarter of 1998. General and administrative expenses increased from $10.9 million in the first quarter of 1998 to $13.8 million for the same period in 1999. This increase in costs related to additional staffing primarily in the Company's regional offices to facilitate its unit growth expansion. This regional staffing, which is now complete, is an important investment in infrastructure to sustain Four Seasons operating standards and service culture for the long term. Although these cost increases caused the hotel management profit margin to decline in the first quarter, it is expected that the margin for the full year should remain at approximately the same level realized in 1998 (62.9 percent) with the stabilization of costs and additional fees anticipated over the year from new projects.

Cash flow from operations increased to $14.7 million for the first quarter of 1999 from $4.1 million in the first quarter of 1998. The Company is targeting to invest 70 percent or more of its cash flow from operations in new projects which will provide new sources of management fee revenues. The majority of the Company's investments during the first quarter of 1999 related to its new projects in Scottsdale and Punta Mita.

As part of a program to capitalize upon its brand name, service and marketing expertise, Four Seasons has been pursuing opportunities in luxury vacation ownership. The Four Seasons resorts in Punta Mita and Scottsdale are scheduled to open in 1999; both will include Four Seasons' vacation ownership developments. These new Four Seasons Resort Clubs will complement Four Seasons first vacation ownership development, the Four Seasons Resort Club Aviara in Southern California. Other new Four Seasons resorts and certain city-centre hotels are also expected to include a vacation ownership component.

Four Seasons Hotels and Resorts is the world's largest operator of luxury hotels. The Company currently manages 43 hotels in 18 countries and has an additional 18 properties under construction or in advanced stages of development. Ten of these projects are in countries where Four Seasons does not currently manage a hotel.

Four Seasons is expanding its international presence, with several new projects as a number of important city-centre hotels are scheduled to open during 1999, including new Four Seasons hotels in Las Vegas (which opened in March), Cairo, Canary Wharf (London) and Paris. New Four Seasons resorts will open in Punta Mita (Mexico) and Scottsdale. During the year 2000, new Four Seasons hotels and resorts are scheduled to open in Caracas, Doha (Qatar), Dublin, San Francisco, Shanghai and Sharm el Sheikh (Egypt).

The Company also expects to participate in the growth of The Regent brand name through its alliance with Carlson Hospitality Group of Minneapolis ("Carlson"). Carlson is franchising The Regent brand and has recently announced nine new Regent projects, including new hotels and resorts in Las Vegas, Vancouver, Mumbai and Mexico. There are nine existing Regent hotels which the Company continues to manage.

CONCLUSION

"The first quarter results were in line with our business plan which calls for 75 percent or more of our fee growth from recently opened hotels and new projects which are under construction," commented Douglas Ludwig, Executive Vice President and Chief Financial Officer. "During the first quarter, the Four Seasons Hotel in Las Vegas was opened and we are very pleased with the reception the hotel has received. This hotel and the others scheduled to open over the remainder of 1999, together with fees from our expanding vacation ownership business should contribute to our meeting our growth objectives for 1999."

All dollar amounts referred to above are Canadian dollars unless otherwise noted.

Certain statements contained in this press release that do not relate to historical information are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. These factors are described in the Company's security filings. Such factors include, but are not limited to economic, competitive and lodging industry conditions. The Company disclaims any responsibility to update any such forward-looking statements.