Increased business from the leisure market has boosted occupancy levels at Jarvis, but room rates are down, it said in its latest trading statement, issued last week.
The company's marketing and sales efforts over the important Christmas period increased turnover, and it reported continued progress in its leisure business. However, the group warned that it would report lower than expected profits when full-year results are announced in June.
In November, Jarvis announced its interim figures and reported that turnover at the end of the period had shown an improving trend. But UK commercial business, it said, had been weak throughout the first 20 weeks to 28 February.
Turnover for that period was "marginally" ahead of the equivalent weeks of last year, which had resulted in higher occupancy but lower room rates.
The statement said: "There are now signs that this important market has recently shown a further deterioration, given the current uncertain economic and global background."