Fairmont Hotels & Resorts Inc., the company which owns the Fairmont Southampton and the Fairmont Hamilton Princess, saw its second-quarter profit increase to $34.1 million or 45 cents a share, from $29 million or 36 cents per share a year earlier.

?Our second quarter earnings before interest, taxes, other expenses and amortisation of $50.5 million were in line with our expectations,? said William R. Fatt, FHR?s Chief Executive Officer.

It is important to note that the comparability of our 2005 results, specifically our hotel ownership operations, are affected by the two hotels we sold in 2004.?

Revenue declined to $205.7 million US, from $219.2 million US in 2004?s second quarter, when the sales of two hotels and undeveloped land brought in $37.4 million.

Revenue per available room (RevPAR) for the comparable portfolio improved 8.3 per cent, driven by growth of 9.4 per cent in the US and international managed segment. The Canadian managed portfolio experienced RevPAR increases of 6.9 percent.

Revenues for Canadian-owned hotels were hurt by an eight per cent rise in the Canadian dollar, versus the US dollar.

?We expect our US and International hotels to continue to benefit from strong industry fundamentals and perform to our original expectations,? said Mr. Fatt adding that the stronger Canadian dollar is however impacting Canadian operations. ?We now anticipate softer US travel to Canada and as a result are revising our previous guidance to reflect these conditions.? During the quarter, Fairmont assumed management of the ?Sutton Place Hotel? in Newport Beach, California and management of The Norfolk Hotel, Mount Kenya Safari Club, The Aberdare Country Club, The Ark and the Mara Safari Club, all located in Kenya.

?We are delighted to add Newport Beach and Kenya this quarter to our growing list of Fairmont destinations,? noted Mr. Fatt. ?The growth of the Fairmont brand continues to remain a key focus for the Company as we aim to increase the distribution of the brand and further raise the exposure of our existing portfolio.?

FHR?s has revised its previous 2005 EBITDA guidance of $185 - $195 million to reflect currently lower expectations with regard to US travel into Canada and greater than forecasted costs associated with stock appreciation rights ($3 million). FHR now estimates that 2005 EBITDA will be approximately $192 million, including the $17 million gain on the land sale which will be recorded in the third quarter.

Estimates for net income and diluted earnings per share have been adjusted to $96 million and $1.24 respectively, to reflect the change in EBITDA expectations, a further tax recovery associated with the tax settlement reached in the second quarter that the Company is expecting to record in 2005 and certain other items.