Kingdom Hotel Investments (KHI)Kingdom Hotel Investments (KHI), the leading emerging markets hotel investment company, today reports results for the six months ended 30 June 2008.

FINANCIAL SUMMARY

KHIKHI reports a strong financial performance for the period ended 30 June 2008, from both existing hotels and acquisitions underpinned by continued diversification into high growth markets, particularly Asia, and further investment.

KHIKHI

KHIKHI

** KHIKHI Adjusted EBITDA account for the full impact of our share in the EBITDA of unconsolidated equity investments and the share of KHIKHI minority partners in the EBITDA of our subsidiaries.

Strong revenue and KHIKHI EBITDA* growth in subsidiaries driven by the 5 Asian subsidiary properties acquired in 2007, as well as strong like-for-like growth across KHIKHI's 12 comparable hotels. Asia represented 43% of reported hotel revenues (versus 21% in 2007).

In addition to KHIKHI EBITDA* growth, KHIKHI Adjusted EBITDA** expanded as real estate sales were accelerated in our associated Egypt Four Seasons properties as well as very strong hotel performance at associated properties.

Reported net profit growth was impacted by non-recurring write-offs related to changes in certain capacity expansion projects; a gain on sale of KHIKHI's investment in the Dubai Pearl development; and favourable restatements to 2007 P&L.

Conservative balance sheet with net debt to equity ratio of 13% as at 30 June 2008.

STRATEGIC HIGHLIGHTS

Benefits of the diversification strategy are apparent with particularly robust revenue growth from hotels in Middle East North African region.

Continued portfolio rationalization with the sale of KHIKHI's minority investment in the Dubai Pearl development and increase in its holding in M?venpick El Quseir in July 2008 (subsequent event).

- Active capital reallocation in line with changing market conditions and opportunities.

-In Phang Nga, Thailand, KHIKHI decided not to proceed with this development in light of changes to regulations and capital allocation objectives.

- In Da Nang, Vietnam, KHIKHI decided not to proceed with the residential component of the project due to a significant change in local macro-economic conditions and development risks.

- In Langkawi, Malaysia, capacity expansion at the Four Seasons hotel has been cancelled due to cost escalation and overall market conditions. KHIKHI continues with the ancillary real estate development at this property.

OPERATIONAL HIGHLIGHTS

Focused on delivering a robust, top-line System hotel performance and developments are progressing well with strong pre-sales performance.

Robust System RevPAR growth of 23% (16% before foreign exchange effects) was driven principally by rate gains across the portfolio and very strong performance in Middle Eastern North Africa properties and our George V associated investment.

Ancillary real estate sales progressing. All inventory at the Four Seasons Sharm El Sheikh and most of the inventory at the Four Seasons Cairo has been sold with the remaining apartments in Egypt expected to be sold by year-end. In terms of development projects, two-thirds of the Four Seasons Mauritius' residential villas have been sold. Following the marketing launch of the Raffles Residences in Manila, 50% of inventory was pre-sold in July and August (subsequent event). Four Seasons Marrakech villas are fully pre-sold.

Advances in development pipeline. Four Seasons Beirut, Mauritius and Marrakech, Raffles Seychelles as well as the M?venpick Accra are all under construction. Our Manila development is at the tender and negotiation phase. Opening of the Four Seasons Beirut is now expected in H1 2009 (previously H2 2008) and our Manila project in H1 2011 (previously H2 2010).

Renovation programmes are near completion. Renovation of the InterContinental Lusaka and room capacity expansion of the M?venpick Bur Dubai are complete. Conversion works at M?venpick Bur Dubai Residences are also complete and its operating licence is expected in the second half of 2008. Renovations of our two Kenya hotels also expected to be finalized in the second half of 2008.

OUTLOOK

Based on current trading trends, KHIKHI continues to expect System RevPAR growth in the mid-teens for 2008.

During the balance of the year KHIKHI expects to complete its planned renovation programmes, open the Four Seasons Mauritius resort and complete residential sales in October, as well as advance construction on development projects.

Other ancillary real estate sales are expected to progress with continued pre-sales activities in Manila and the launch of the Raffles Seychelles residential marketing programme.

KHIKHI continues to manage its portfolio actively to ensure ongoing flexibility and resilience despite the implications for growth of potentially more challenging global economic conditions, combined with inflationary pressures on energy costs and wages. The company will continue to leverage its balance sheet to fully fund selected developments and provide flexibility to pursue acquisitions as attractive opportunities arise. The group is committed to create shareholder value through disposals in line with its business model.

KHIKHI is in advanced stages of negotiation with various lenders to add between US$300-350 million of new debt commitments by year end, representing corporate, development and refinancing facilities in a combination of non-recourse, limited recourse and corporate recourse facilities.

In July 2008, KHIKHI's Four Seasons associated hotels in Egypt resolved to distribute dividends, of which KHIKHI's share is US$28 million.

Commenting on the results Sarmad Zok, Chief Executive Officer, said:

"KHIKHI has delivered a strong financial performance in the first half as we continue to actively manage the Group's portfolio in selective high growth markets. Our diverse product portfolio across assets and regions has enabled us to deliver strong revenue and profit growth despite the challenges affecting the worldwide economy. I am particularly pleased by the considerable progress and contribution from our real estate sales. KHIKHI will continue to leverage its asset base in line with market opportunities to maximize shareholder value."

"I would like to take this opportunity to express my deep personal sorrow at the recent loss of Mr. Jassim Al-Bahar and, on behalf of the Board, to express our gratitude for the significant contribution he has made to KHIKHI."

-Ends-

About Kingdom Hotel Investments (KHIKHI)
KHIKHI, headquartered in Dubai (UAE), is the leading international hotel and resort acquisition and development company focused on high growth emerging markets such as the Middle East, Asia and Africa.

The company has ownership interests in 33 properties in 21 countries including 23 operating hotels and resorts and 10 hotels and resorts currently under construction or in the initial stages of development. KHIKHI is listed on the Dubai International Financial Exchange and London Stock Exchange.

ENQUIRIES
Brunswick Group
Laura Cummings / Sophie Brand
+44 207 404 5959

A conference call for analysts will take place today at 11.00am (BST). The dial-in arrangements for the call are as follows:

Telephone: +44 (0) 1452 568 061

Participant Code: 61357003

A recording of the conference call will be available until 3 September 2008 on: Telephone: +44 (0) 1452 55 00 00 Access Code: 61357003#

Management's discussion and analysis of financial condition and results of operations are available online at www.kingdomhotels.com

© Press Release 2008