Millennium & Copthorne Hotels saw first quarter pre-tax profit fall 34.7 per cent on the previous year as the company closed accommodation for refurbishments.
Pre-tax profit for the first three months of the year dropped to £16.9m from the prior year's £25.9m, reflecting a 3.6% decline in revenue to £169m and the cost of renovations.
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The group said harsh weather conditions also deterred travellers in Europe and the US while a slowing economy put a strain on travel budgets.
Revenue per available room (RevPAR) was up 1.6% and the average room rate rose by 1.7% while occupancy fell slightly by 0.1 percentage point.
Net cash increased from £52.2m at the end of December to £56.5m and the end of March.
"Although Group RevPAR increased by 1.6% over the three months ended March 31st 2013, revenue declined due to a number of factors, which are unlikely to abate in the foreseeable future," Chairman Kwek Leng Beng said.
"Asia, which accounted for over 40% of group revenues last year and has led our revenue and profit growth in recent years, is facing a number of political, economic and other challenges that are likely to impact performance.
"Europe also continues to face challenges as a result of austerity programmes and the ongoing fallout from the financial crisis."
However, he said the company's strong financial position will provide a safeguard against economic headwinds and allow for flexibility to act on acquisitions and investments.
Shares dropped 3.24% to 537p at 08:56 Thursday.
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