Ladbroke, which controls the Hilton hotel chain outside of the US, will start testing a three-star format in Brazil later this year.
It will spend $30m developing three sites before seeking partnerships in other countries. However, it will not be opening the hotels in the UK as costs are too high.
The details emerged as Ladbroke announced a better than expected 22 per cent rise in first half profits to pounds 123.7m boosted by pounds 6m of additional revenue from the World Cup.
Peter George, chief executive, said he expected a full merger of its Hilton International division with Hilton Hotels of America "sooner or later" if tax considerations could be overcome.