The group, which also owns the Ladbrokes betting business, said it planned to raise £300 million to £400 million from the sale of hotels in the next 12 months - and hoped to return a substantial part of that to shareholders.

It said 2004 had been an "eventful but also encouraging" year, with Ladbrokes bringing in record profits of £273.4 million despite adverse racing and football results at the end of the year. Hilton reported a satisfactory start to 2005.

The group is already in the process of selling 11 UK hotels and said it was looking at the possibility of further disposals in the next 12 months.

Brian Wallace, the Hilton finance director, could not say where the hotels might be or how many would be involved, but said they would probably be sold and leased back to the company.

"It’s fair to say there’s bound to be some in the UK," he added.

During the year to December 31, profits at the hotels division rose by 17 per cent to £171.3 million as the recovery in the sector continued.

This was mainly driven by an encouraging performance in London and, during the second half, Europe. Revenues per available room were 7 per cent higher when measured at constant exchange rates.

Hilton, which has more than 500 hotels worldwide, said the prospects for the sector were better than they had been for several years.

The company has seen a poor performance by its betting and gaming arm offset its hotel recovery in recent months due to a winning run by punters, although it said today that growth was strong across all Ladbrokes channels.

It said it was continuing to look at the possibility of opening a casino in Blackpool under the proposed new Gambling Law, subject to it being chosen for one of the eight regional sites.

Mr Wallace said: "We think that Blackpool is an extremely good opportunity to be one of the eight."

However, analyst Paul Leyland at stockbroker Seymour Pierce said he did not "ascribe any value" to the plan at this stage.

The rapid growth of internet gambling contributed to Ladbrokes, with operating profits rising by 50 per cent to £21.3 million.

Ladbrokes has been cashing in on the popularity of online poker through its Pokermillion venture with Sky television. It said the number of players increased by 156 per cent to 64,000 during the year.

Shares in Hilton stood 5.5p higher at 317.5p in afternoon trade.

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