Hilton Group's results for 2002 show pre-tax profits are down 3.1 per cent from £280.2m to £271.4m.

Hotel operating profits fell 16.9 per cent to £212.1m in difficult trading conditions, especially in European gateway cities, despite an increase in turnover from £4,161m to £5,479m.

However, group chief executive David Michels said 'the inherent strength of the brand remained intact,' and reported management contracts have been signed for new properties in Moscow, Venice and a third hotel in Paris, and some of the company's older sites - such as Sydney, Athens and Vienna - will be totally refurbished.

Over the last year the company opened new hotels in Cologne; Narita Airport, Japan and Sao Paolo, Brazil.

In betting and gaming, operating profit was up 31.5 per cent at £149.3m on turnover up 50 per cent at £3.8bn, benefiting from the zero customer tax regime, growing profits from eGaming and the World Cup. The company's shop business in the UK, Ireland and Belgium is undergoing a continuing programme of acquisitions, relocations and refurbishments.

It was reported last year that LivingWell, the company's health club business, will open a further four clubs in Australia - for a total of eight. Last year also saw the launch of LivingWell Express - its new hotel health club concept, designed for the travelling business customer.

Hilton also signed a licensing and development agreement with Coral Hotels to rebrand their Caribbean hotels, Coral by Hilton and have also gone into partnership with Festival Cruises to provide 'Hilton Suites' on certain ships.

Commenting on the results, chair, Sir Ian Robinson, said: 'In the medium term our hotel performance will improve and Ladbrokes will continue to grow, both businesses being sector leaders'. Details: www.hiltongroup.com