InterContinental says second-quarter profits will be "substantially lower" than last year after a grim start to 2003.
The hotels group - formed following last week's demerger of Six Continents - has been hit by the impact of the Gulf war, and more recently, the Severe Acute Respiratory Syndrome virus.
The figures for the three months to March 31st show InterContinental's Europe, Middle East and Asia business had been most affected by the tough climate.
With US guests staying away, the division's InterContinental hotels suffered a 9.6 per cent year-on-year drop in revenues per available room during March.
The performance of the group's Britain-based Holiday Inn operation was better, falling 0.1 per cent in the regions, although the lack of US tourists meant the decline for the brand's London hotels was 9.2 per cent in March.
The performance in the Americas region has proved more resilient, with the InterContinental brand achieving revenues growth of 3.7 per cent last month.
On top of the trading difficulties, InterContinental told the City that the cost of demerging Six Continents and fighting a takeover approach from leisure entrepreneur Hugh Osmond would be in the region of £129 million sterling.
The changes saw Six Continents' pubs and restaurants business spun off to create a separate business called Mitchells & Butlers.