Bermuda-based Orient-Express Hotels Ltd. has signed a deal with a US real estate developer to develop hotels and residences in Miami and Central and South America.

The group, which is made up of owners or part-owners and managers of 51 luxury hotels, restaurants, tourist trains and river cruise businesses in 25 countries, has signed a letter of intent to set up a 50/50 strategic partnership with The Related Group to develop the properties in South Beach Miami; Cartagena, Colombia; and Panama City, Panama.

Meanwhile, Orient-Express saw its share price drop at least 7.5 percent in US trading, down $3.12 to $38.63 after having its ratings cut to "underperform" at Merrill Lynch & Co. because of a slowdown in demand for US lodging.

The proposed strategic partnership plans to develop and operate multi-use projects that will include hotel, branded residential and commercial parts.

The letter of intent between Orient-Express and The Related Group contains a 90-day exclusivity period and is non-binding until detailed negotiations are completed.

Initial projects, all planned to open in three years, include: a hotel with 28 luxury residences in the fashionable "SOFI" (south of fifth) area of South Beach Miami; an oceanfront hotel in Cartagena, close to the old walled city which is a UNESCO World Heritage site; and a hotel on Avenida Balboa, Panama City, part of a major city-led waterfront development project.

Paul White, president and CEO of Orient-Express, said, "We are very proud to have entered into this proposed strategic partnership with a company of the calibre of Related.