Beijing plays down worries on Olympic hotel bookings

"I think maybe there will be some psychological effect on some foreign tourists who don't understand the situation," Zhang said in late May.

And despite China's public message that it welcomes all to the Olympics, the government has significantly tightened controls on visas in the run-up to the event, procedures it says are normal for an Olympic host city and needed for security.

Sun Weide, a spokesman for the Beijing Olympic organizers, denied that the new visa regime was responsible for low hotel bookings.

"The visa policy is very clear -- it's to guarantee the security of competitors over the Olympics period ... We will take whatever steps are necessary to ensure a peaceful Games," Sun said.

"We welcome foreign friends from all over the world to come to Beijing to compete in and watch the Games, and continue to take measures to provide convenience in applying for visas," he added.

Beijing expects to play host to between 450,000 and 500,000 overseas visitors during the August Olympics, only marginally up from the 420,000 who came in the same period last year, though August, which can be searingly hot, is normally a low tourist season.

(Editing by Jeremy Laurence)