LONDON—Since former CFO Paul White took over in August 2007, he has defined new objectives and growth strategies for Orient-Express Hotels (OEH), pursuing growth opportunities that have not been explored before, including growing its non-room revenues and leveraging its “brands” like 21. The company also will be more aggressive in acquiring hotels either alone or with a partner, and in seeking out management contracts and developing for-sale residential offerings.

OEH is determined to pursue these growth opportunities alone, despite the interest the company has received from private equity firms and hotel operators across the globe. “We believe that we’ve got a good strategy and that we can create good shareholder value through it,” White says. “The fact that people are interested in us can only be a compliment to what we are doing.”

Today, OEH has an ownership stake in 41 hotels (3,915 rooms), ranging across five continents from Copacabana Palace in Rio de Janeiro to the Observatory in Sydney. Building its portfolio through hotel and land acquisitions is a key element of OEH’s growth plan, and the company has US$500 million available immediately to invest.

From 2002 to 2006, the company closed US$260 million in acquisitions, each one at a price no greater than 10-times EBITDA. “We have been forward thinking in our acquisition strategy, especially when people talk about the emerging markets like Brazil,” White says.

In 2007, OEH acquired the 200-room Hotel das Cataratas in the Paraná region of Brazil and a 185,000-sq. m (2 million-sq. ft.) parcel of land in Buzios, which is 180 km (112 mi.) northeast of Rio de Janeiro. The land will be used for the development of an all-suite boutique resort of 40 rooms, along with 17 villas.

The company also has been actively collecting hotel assets in Asia. In 2006, for example, it acquired six hotels in Southeast Asia, the former Pansea properties. “In general, Asia is a place where we want to have a stronger presence,” White says. “The whole region is opening up for tourism.”

Eastern Europe, Mexico and Central America also are on OEH’s radar, along with the Galapagos Islands and Buenos Aires, Argentina.

Although OEH previously preferred to make acquisitions on its own, the company is now open to joint venture partnerships and is actively pursuing management contracts. “If the acquisition is right, I am not obsessed with being 100% owner—a management contract works just as well for us because ownership should not be confused with control,” White says.

OEH plans to develop a 150-room hotel connected to 21 in New York City.

Like real estate acquisitions, development is another growth area for OEH—both hotels and for-sale residential around its hotels.

For example, in Riviera Maya, Mexico, OEH is developing Maroma Haciendas, a collection of 25 villas that will add US$20 million to US$25 million in EBITDA. The company’s efforts will be focused on less-developed areas in Latin America and Asia.

OEH also has plans to enter New York City with the development of a US$220-million, 150-room luxury hotel that will connect to a new branch of the New York Public Library and the 21 Club, an iconic restaurant that opened during the Prohibition Era and eventually became a celebrated speakeasy.

“There are some wonderful hotels in New York City, but I don’t think there is a hotel that really stands out from the crowd,” White says. “We feel that we can do something that can really knock the socks off the city.”

OEH plans to break ground next year on the project in New York City. Scheduled to open in 2011, the hotel is expected to bring in US$400 in RevPAR and an internal rate of return of 20%, according to a November investor presentation. Potential destinations for similar 21 hotels include Chicago, Washington, Las Vegas, San Francisco, Miami and Boston.

“In our sector, most companies need a flagship brand, and it’s my sense that Orient-Express is trying to create a flagship brand with 21,” says David Katz, an analyst with Oppenheimer & Co., New York City.

As things stand today, OEH doesn’t have a flagship brand, nor does it have an umbrella brand. Its properties are known only by their unique names, making each hotel a distinct brand.

“Branding is the greatest opportunity and the greatest threat for Orient-Express,” says Ramsey Mankarious, CEO of Cedar Capital Partners Ltd., a London-based company that acquires luxury hotels.

White agrees that OEH has the opportunity to build on its existing brands, but the difficulty is identifying those that are best suited for expansion. “Having many hotels with the same brand is an option that is open to us, but you have to be very careful that you do it in the right places,” White says.

OEH hotel locations and their historical significance typically allows them to command significant rate and RevPAR premiums over other luxury brands. During the first nine months of 2007, OEH achieved revenues of US$451.1 million and EBITDA of US$123.2 million. At the end of the third quarter, worldwide same-store RevPAR was up 15% in U.S. dollars and bookings were 7% ahead of same period in 2006.

Beyond bookings, OEH plans to emphasize its food and beverage operations and is consulting with a food and beverage expert to improve its existing restaurants and bars. Its first project in this area was the renovation of an old-fashioned bar in the Mount Nelson into the Planet Champagne Bar. The renovation at Mount Nelson was so successful—revenues are now 12 times what they used to be—that OEH is now doing the same thing at the Copacabana Palace.

Today, 60% of the company’s total revenue is derived from rooms; the remainder comes from additional services like food and beverage. “RevPAR is important, but for a company like Orient-Express, total revenue is more important,” White says. “If there is a slight softening and room revenue goes down, there is no reason why our total revenue can’t go up.”