TORONTO (Bloomberg) ? Fairmont Hotels & Resorts Inc., which runs luxury hotels including The Savoy in London, posted a 48 percent drop in quarterly profit and lowered its 2005 earnings forecast because of a decline in tourists to resorts in Bermuda and Mexico. The stock had its biggest fall in almost two-and-a-half years.

Net income in the third quarter fell to $69 million, or 92 cents a share, from $131.8 million, or $1.66. Revenue rose 16 percent to $240.1 million, the Toronto-based company said yesterday in a statement.

Higher airfares and the threat of hurricanes are keeping vacationers away from Fairmont?s 410-room property in Bermuda, while the company?s two resorts in Acapulco, Mexico, are suffering from reports of street violence in the city, the company said. Revenue at the Bermuda location fell ten percent.

?Operating performance is good but not on par with what we?re seeing from other high-end and luxury operators at this point,? said CIBC World Markets analyst David Katz, who rates Fairmont ?sector perform? and doesn?t own it. ?We would expect to see a little bit better revenue growth at this point, and frankly it comes down to cost controls.?

For 2005, Fairmont forecast a midpoint for earnings before interest, taxes and amortisation of $170 million, down from a $175 million midpoint forecast in July, the company said. Diluted earnings per share excluding unusual items for 2005 is estimated at 71.5 cents a share, the midpoint of a range provided yesterday, down from the previous 75-cent forecast.

Shares of Fairmont fell C$1.91, or 4.9 percent, to C$37 on the Toronto Stock Exchange, the biggest drop since May 2003.

Fairmont had higher sales from its US hotels, while revenue dropped at international locations, primarily the company?s Fairmont Hamilton Princess in Hamilton, Bermuda. Revenue per available room, a measure of average occupancy and room rate, rose 12.3 percent, aided by a 19.3 percent gain at US properties.

Revenue per available room at hotels owned by the company and operating for at least a year rose 7.1 percent in Canada and 20.7 percent in the US. Adjusting for the effect of the Canadian dollar?s rise against the US currency, revenue per available room at Canadian owned hotels declined 1.5 percent, the company said.

?We expect that our US hotels will continue to benefit from strong industry fundamentals and perform to our original expectations,? chief executive William Fatt said in a statement. ?Although we experienced some weakness in our international portfolio in the third quarter, we anticipate that these hotels will experience modest year-over-year growth in the fourth quarter.?

In July 2004, the company sold the Fairmont Kea Lani Maui hotel in Hawaii to Host Marriott Corp. for $355 million and the Fairmont Glitter Bay in Barbados for $31 million, adding a total of $144.2 million to earnings.