HOTELS group Millennium & Copthorne has reported a sharply decline in profits after the September 11 attacks on the US wrecked demand and shut a key New York hotel.

Annual pre-tax profits more than halved from £129.1m to £54.2m, although the company is more optimistic about trade this year.

But it will have to do without its Millenium Hilton for the "foreseeable future" because the hotel is close to Ground Zero.

The group has three other New York hotels and chairman Kwek Leng Beng said there were encouraging trends from those outlets and 16 others in the US.

Millennium & Copthorne owns 86 properties worldwide and said difficult market conditions prior to September 11 sharply deteriorated after the World Trade Centre attacks.

Turnover for the year to December 31 fell to £594.6m from £690.9m in 2000.

In the US, occupancy levels slipped to 58.8 per cent from 67.8 per cent a year earlier, with the figure for New York down ten per cent to 73.3 per cent.

The group, which has five of its 17 UK hotels in London, said properties in the capital were particularly hard hit, with occupancy levels down to 80.4 per cent from 85.7 per cent a year earlier.

However, Millennium & Copthorne singled out its hotels in Newcastle and Glasgow for praise as regional locations had generally performed better.

But Copthorne hotels at Gatwick and Effingham Park saw a fall in revenues because of their dependence on airline passengers and crew.

In Asia, where the company operates in seven countries, the group blamed challenging trading conditions in the second half for pushing occupancy rates down to 62.5 per cent from 68.9 per cent last time.