Fixed odds terminals are growing in popularity

Hilton reported pre-tax profits of �156.7m ($281.2m) for the six months to 30 June, up from �74.5m a year ago.

The rise was mainly due to strong growth in Ladbrokes' shops and internet betting, although Hilton's hotels also showed modest signs of recovery.

The hotels sector has been hit in recent years by the Sars outbreak, terrorism fears and the war in Iraq.

Uncertain outlook

Although Hilton's outlook for its hotels remained cautious the firm said there were signs of an upturn.

The launch last year of localised hotel websites in the UK, Germany, Japan and Scandinavia had seen internet bookings more than double in the first half of 2004, the company said.

It will probably take two more years to recover from the peak of 2000, but people have begun to travel again David Michels, Hilton Group chief executive See Hilton's current share price

And overall room occupancy at Hilton's hotels was up 5.6% in the first half of the year.

UK and Ireland was one of the strongest regions for the group, with London particularly buoyant, enjoying a 9.4% rise in room occupancy.

But David Michels, group chief executive, said booking patterns remained late "making forecasting difficult, particularly in some parts of Europe".

France was among areas where trading had been challenging.

"We are probably in the first year of recovery," Mr Michels told BBC Radio 4's Today programme .

"It will probably take two more years to recover from the peak of 2000, but people, for business and pleasure, have begun to travel again."

Hilton operates about 400 hotels in 80 countries worldwide outside the US and nearly 1,900 Ladbrokes betting shops in the UK.

New games

Hilton said it has continued to increase the size, number and opening hours of its Ladbrokes betting shops in the UK and was introducing new products such as virtual greyhound racing and live betting on football.

Ladbrokes' gross win was up 23% to �338m as betting terminals and internet gambling continued to grow in popularity.

Fixed odds terminals, incorporating computer casino betting, accounted for 59% of the growth in the gross win, with the number of machines in stores doubling in a year to 4,363.

Ladbrokes said it had benefited from a good run of results at events including the Cheltenham Festival, the Grand National and Euro 2004.

Online business continues to "grow rapidly", with strong performance in poker and internet casino games.