The hotel industry continues to recover

Hilton said pre-tax profits rose to �311.3m ($595m) last year, up from �171.2m in 2003.

The Ladbrokes betting shop chain saw profits rise 28% while hotel profits climbed 17% as the sector continued to recover, Hilton said.

It also said it planned to raise up to �400m through hotel sales, with most of the cash set to go to shareholders.

Chairman Ian Robertson said Hilton enjoyed "one of its best performances in recent years" during 2004.

The firm added that it had seen a "satisfactory" start to 2005, with hotel trading improving in most parts of the world.

Rising popularity

Hilton owns nearly 1,900 Ladbrokes betting shops which have seen profits rise strongly following the introduction of fixed-odds betting terminals.

The firm said it had installed these machines faster than any other company and by the end of 2004 nearly 6,000 terminals had been installed.

See Hilton's share price

Hilton's gaming business has also been boosted by rapid growth in internet betting, with online profits up 50% to �21.3m after particularly strong growth from the poker site.

"There's more television in more places with more sport more often, and if there is that then people are more likely to bet," chief executive David Michels told BBC Radio 4's Today programme.

And he said the rise in popularity of online poker was being shown in some surprising places.

"I was listening to The Archers and couldn't believe there was a five minute poker game on it. If that doesn't show how popular it is then I don't know what does."

Prospects improve

After a tough period for the hotel sector worldwide, Hilton said "encouraging signs" emerged in 2004 that both the business and leisure sides of the industry were improving.

"The potential impact of war, terrorism and other natural disasters remain, but appear to have lessened, and the prospects for the sector are better than they have been for several years," Hilton said.

Mr Michels said that "the public have readjusted since 2001 and the few terrible instances we've had since then seem to affect their travelling less".

"People do become accustomed to it, or more importantly, a little less scared," he added.

The company is currently in the process of selling 11 UK hotels and said it is also looking at the possibility of further sales.

Hilton said these disposals could raise between �300m and �400m and it intends that a "substantial part" of this money should be returned to shareholders.

Shares in Hilton closed 2 pence higher at 314 pence.