The company said it was buying the 1,241-room Big Island resort, which it manages for a foreign investor, to "solidify our major presence in Hawai'i."

"The Hilton Waikoloa Village is the definition of an irreplaceable asset and is an important strategic property for our company," said Matthew J. Hart, Hilton's executive vice president, in a statement.

Hilton first acquired a minority interest in the resort in 1993 as part of a partnership with Taiwan-based Pan-Global Partners that bought the property for $55 million, an 85 percent discount from the hotel's $360 million original development cost.

The hotel, originally the Hyatt Regency Waikoloa, was developed in 1988 by flamboyant real estate developer Chris Hemmeter, who built the resort on 62 acres along the Kohala Coast with Japanese financing.

Hilton is paying $75 million in cash and 5.2 million Hilton shares. Hilton said the purchase would close in the second quarter and would have a positive effect on earnings.

Hilton also said today that its first-quarter profit fell a less-than-expected 38 percent and the company raised its forecast for the year as leisure travel picked up.

Net income fell to $34 million, or 9 cents a share, from $55 million, or 15 cents in the year-earlier period. Revenue fell 14 percent to $921 million, Beverly Hills, Calif.-based Hilton said in a Business Wire press release.

Hilton follows Marriott International Inc. in reporting better-than-expected results as consumers spend more on travel. Corporate travel, often the most profitable for hotel companies, still hasn't recovered from last year, preventing hotel companies from raising room rates, analysts and investors said.

"Leisure travel in general is fine, though the hotels are finding they have to cut rates to get the business," Keith Mills, a UBS Warburg analyst, said before the results were released. "Corporate transient travel has not come back yet."

Hilton was expected to earn 5 cents, based on the average estimate of analysts polled by Thomson Financial/First Call. Hilton shares rose 34 cents to $15.72 in early trading.

Hilton, whose trophy assets include the Waldorf-Astoria in New York and Honolulu's Hilton Hawaiian Village, said its 2002 profit would be in the "low to mid 60-cent range," including 12 cents a share for the adoption of goodwill accounting rules. The company is now expected to earn 58 cents, according to First Call.

The company said its average occupancy fell 4.6 points to 66 percent from a year earlier while average daily rate fell 7.6 percent to $130.67. That made revenue per available room, a measure of room rate and occupancy, $99.96, 14 percent lower than a year ago. Revenue per room will rise 2 percent to 3 percent for the full year, Hilton said.

Hilton shares have risen 41 percent this year. Chief Executive Stephen Bollenbach predicted in late September that travel would rebound and pledged to "manage for recovery" by laying off fewer workers than other hotel companies and continuing with development projects.

Hilton today raised its estimate of capital expenditure for 2002 to $290 million, from $250 million.

"What softness remains, especially in the independent business traveler segment, is more related to the economy than to the events of Sept. 11," Bollenbach said in the statement.

The company owns, manages or franchises about 2,000 hotels under the Hilton, Embassy Suites, Hampton Inns and other names.