Beijing hotels have been forced to slash their rates after struggling to fill their rooms for the Olympics.

Hotels across the capital, which had been counting on an Olympic boom and had ramped up prices by triple or even more for the duration of the August 8-24 Games are having to slash their rates. The city’s five-star hotels are reporting no difficulties since their rooms were booked out months, if not longer, in advance by Olympic officials, delegations and sponsors. However, four-star hotels say they are not even half-booked, compared with normal occupancy of 80 percent in August.

The imposition of yet more restrictions on visas, this time tighter approvals for businessmen, has put further pressure on the struggling businesses.

Beijing tourism officials say average prices for three-star hotels are down to $60US a night from $100US in previous months, although managers are hoping for a sudden windfall once the Olympics begin. Four-star hotel room rates have slumped to about $117US a night from $220US.

Municipal authorities say they expect 400,000 to 450,000 foreign visitors in August, compared with 420,000 a year earlier – hardly a sign of a surge in numbers.

Stricter enforcement of entry rules – an Olympic ticket does not guarantee a visa – and the impact of higher oil prices on plane tickets have also had an impact.

Just today, officials revealed that Beijing, as well as Shanghai and three other cities that will host Olympic events have stopped issuing invitation letters for business people until late September. Chen Yu, of the Beijing Municipal Bureau of Commerce, said: “We don’t take in applications related to any other general business matters, such as attending conferences, visiting factories and business negotiations.” Visa will still be issued for employment purposes and to execute business contracts.

China had tightened visa rules to keep out foreign activists and foreigners not properly employed in Beijing, but businessmen had not been caught in the net. The visa restrictions are part of a huge security operation to ensure a trouble-free games – in line with Beijing’s desire to project an image of a modern nation racing towards widespread prosperity.

Liu Qiong, an executive at the Xiao Xiang Hotel, a three-star hotel near the Temple of Heaven in southern Beijing, said it cut prices by 20 percent a few days ago. The drop in guests was caused by the visa restrictions and because many exhibitions had been moved to other cities to escape suffocating security arrangements in Beijing.

She said: “As a result of that, our occupancy isn’t as good as we expected. And I don’t think things will get any better even with the rate cut.”

Travel agents in Hong Kong, a major gateway into China, said in April that the government visa office had declared multiple-entry business visas would not be available from mid-April to mid-October. In the past such visas were easily obtainable and businessmen would travel regularly into the mainland to check up offices or factories.

Xiong Yumei, director of the Beijing tourism department said half of rooms in four-star hotels had still to receive bookings during the Games. She said: “I do not expect a great up and down of booking and room rates in the next month.”

Beijing has 339,000 rooms, or 665,000 beds, for travellers and of these 816 are hotels with stars offering 129,000 rooms. The daily demand during the Games is likely to be 333,000 beds at most, city officials say.

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