HILTON GROUP predicted yesterday that its hotels division would bounce back next year to pre-September 11 levels after reporting a 19.6 per cent surge in hotel profits in the first half.
The company said that revenue per available room (Revpar), the benchmark performance indicator for hotel groups, rose 9.2 per cent on a global basis, boosted by a 5.6 per cent increase in occupancy.
The recovery for hotels was led by the Central London market, where Revpar rose 17.2 per cent.
The company said that trade was particularly strong at two of its flagship hotels — the Park Lane Hilton, where Revpar rose 35 per cent, and the London Metropole, 21 per cent up — after a record number of overseas visitors flocked to the UK in the past five months.
David Michels, group chief executive, said that he was “cautiously optimistic” about the future of the hotel market, adding that he anticipated it would return to the peaks achieved in 2000 at some point during 2005.
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The company said that it had already opened 14 new hotels this year, including the Waldorf Hilton in Central London. Contracts were also exchanged on new hotels including sites in Manchester, London’s Canary Wharf and Dublin airport.
Despite the buoyant performance in Central London, Hilton said that in provincial locations in the UK, Revpar rose by 3.4 per cent, reflecting a 1.7 per cent rise in occupancy.
Outside the UK, hotel trade was up in Germany, Holland, the Caribbean, Finland, the Middle East, South America, parts of Asia and Egypt. The worst performing countries were Japan and France, where trade fell, while Australia, Belgium, Sweden, Norway and Turkey remained flat.
The strong performance from the hotels division, which delivered profits of £67.1 million at the half-year stage, was accompanied by a record result from Hilton’s betting division, with profits at Ladbrokes surging 51 per cent to £153.7 million.
Profits in the UK retail betting division rose 44 per cent to £119.6 million, boosted by a 14 per cent rise in over-the-counter business.
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The group said that it had witnessed a rise in customers using fixed odds betting terminals in its betting shops. The company said that the number of such terminals, which allow customers to play games such as a roulette on a screen-based game, had doubled from 2,230 in the first half of 2003 to 4,363 in the first half of 2004. Profits at the internet Egaming business soared 95 per cent to £12.1 million.
Hilton said that the bumper performance from the betting division was boosted by a number of factors including high takings from the Euro 2004 football tournament, which was won by Greece, an outsider at the start of the competition.
The company said that as a result it did not expect the first half performance could be repeated in the second half of the year.
Underlying group profits rose 72 per cent to £189.7 million, pushing up earnings per share by 84 per cent to 10.1p.The interim dividend rose 6 per cent to 3.6p.
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Occupancy levels at Hilton’s Central London hotels:
2001: 78.6 per cent
2002: 73.1 per cent
2003: 71.3 per cent
2004: 77.3 per cent