United Arab Emirates: Wednesday, May 05 - 2004

Fairmont Hotels & Resorts branches out in Dubai, joining the Palm

Fairmont Hotels & Resorts Inc. ('FHR') (TSX/NYSE: FHR) announced that it has entered into a strategic alliance with Kuwait–based International Financial Advisors ('IFA') through IFA Hotels & Resorts to open a 300-room luxury resort with 460 vacation ownership residences in Dubai.

Jassim Al-Bahar, Chairman and Managing Director, IFA Hotels and Resorts; Warren Markwart, VP Development, Fairmont Hotels and Resorts and Sarmad Zok, Chief Executive Officer, Kingdom Hotel Investment Group introducing the Palm Property at the ATM the press conference today.

The resort will be on The Palm, Jumeirah, an extensive development project on the Arabian Gulf that is currently being completed. FHR and the Kingdom Hotel Investment Group ('KHI') will each invest approximately $15 million for a 10% equity interest each in this project. 'The Fairmont Palm Hotel & Resort' is scheduled to open in late 2006. FHR, IFA and KHI are also exploring other resort projects in the Middle East, East Africa and South Africa.

'The Palm is one of the most exciting initiatives underway in the region', comments William R. Fatt, Chief Executive Officer, FHR. 'Building on the success of The Fairmont Dubai, the project will further strengthen our brand recognition in this very important market and establish a high profile resort presence in the Middle East.'

The Palm project, under development by Nakheel, includes The Palm, Jumeirah and The Palm, Jebel Ali, which will feature hotels, marinas, residential, leisure and entertainment facilities. Together, these man-made islands will increase Dubai's shoreline by 120 km and are expected to enhance the city's position as a premier global tourist destination. Each island is built in the shape of a palm tree and consists of a Trunk, a Crown with 17 fronds and a surrounding Crescent island. The Palm, Jumeirah measures 5 km by 5 km, with the Crescent island providing another 11 km of available land, and will feature 15-20 hotels and 6-7 marinas.

The entire Fairmont component will be located on the prime southwest side of the Trunk portion, in close proximity to the island's core features. The Fairmont Palm Hotel & Resort will feature extensive meeting space, outdoor leisure facilities including a beach club and beach restaurant, a pool complex and children's activity centre; as well as a variety of internationally themed dining facilities featuring sea, garden or pool views and a 1400 sq. m Willow Stream spa. Willow Stream, Fairmont's unique spa collection introduced in 2001, has quickly earned acclaim for its outstanding design, service and treatments, embodying the distinctive energy of its communities.

In addition to the resort and the 460 vacation ownership residences that will be known as 'The Fairmont Palm Vacation Club', a retail complex, five beach clubs and freehold residences are also under consideration. Lush gardens and over 460 m of beachfront will give the entire Fairmont development the air of a seaside oasis.

The Fairmont Palm Hotel & Resort will be connected to the Golden Mile, a 60,000 square metre international shopping and residential destination. The 1.5 kilometre waterside corniche will cover the complete southern side of the Palm, Jumeirah's trunk and features 780 luxury apartments, restaurants and upscale boutique shops.