updated 3:45 p.m. ET June 25, 2008

The Beijing Olympics are looking like a bust for the city's hotels.

The 17-day games were supposed to generate a buzz throughout the summer, leading to a tourism windfall with fully booked hotels, flush customers and a jubilant atmosphere.

Instead Beijing's summer tourism season is slow, with hotels and travel agencies saying many potential travelers are being put off by tightening visa rules, polluted Beijing air and officials who seem more concerned with keeping out foreigners than welcoming them.

China has spent a reported $40 billion on new infrastructure and stunning venues, hoping to impress visitors with a modern city, attractive to foreign tourists. But this may not play out, which could shake an industry that has more than doubled its five- and four-star hotels offerings to 160 since Beijing was awarded the Olympics seven years ago.

“We are not full at the moment, and we have rooms to fill,” said Anthony Ha, general manager of the newly opened Marriott Courtyard Beijing Northeast. “There's not much time left, and we have a way to go.”

Ha declined to reveal the hotel's occupancy rate. But he expressed concern over a report last month from the Beijing Tourism Bureau that showed five-star hotels were 77 percent booked for the Aug. 8-24 Olympics, and four stars were at 44 percent.

“That's worrisome,” Ha said. “All of the hoteliers, anyway in Beijing, we're hoping to hit 90 percent daily. It's a huge thing.”

He said 90 percent would be normal for events like the Olympic Games.

“This is once-in-a-lifetime thing,” Ha said.

According to the Beijing Tourism Bureau, the number of foreign visitors to Beijing in May dropped by 12.5 percent from a year ago. Among the biggest drops were Japanese visitors, down 45 percent. American arrivals shrunk by 17.15 percent.

The earthquake on May 12 that killed almost 70,000 in Sichuan province may account for some of the decrease. So may a slumping world economy, and off-putting images of deadly rioting on March 14 in Tibet, followed by chaotic pro-Tibet protests on international legs of the torch relay.

But the tourist no-shows also coincide with new stringent visa regulations, making it tough for tourists and business executives to come in. Students have also been targeted, the government fearing they might side with political activists if protests erupt during the games.

Along with hotels, homeowners who hoped to land a windfall by leasing their homes or apartments are being disappointed. Song Zhi, manager of a Web site aimed at overseas Olympic tourists, said he had 200 units but only 20 were reserved. The average price is about 1,000 yuan ($145).

“We don't have what we've expected,” Song said. “There're not even many people making inquires about pricing. We had expected a peak in June, but that peak has yet to come.”

Guo Lingmei, general manager of marketing for BTG Travel in Beijing, said high hotel prices and difficulties obtaining tickets were discouraging tourists. Beijing organizers have said 6.8 million tickets were available for the games, but most were swooped up domestically.

Guo expects June, July and August to be slow.

"There won't be many tourists in these months,'' she said.

Some established five-star hotels are in good shape - at least during the Olympics - having secured reservations from Olympic sponsors or national Olympic committee delegations.

“We don't have any problems at all,” said Marco Sander, director of marketing and sales at the 526-room Kempinski Hotel. He said his high-powered guests were a sure bet.

“They need to come and they have no choice to turn back now,” Sander said. “They have put so much money down they cannot draw back.”

Sander said he was doubtful that Beijing would charm foreigners. Barcelona made its mark in 1992 with a stunning port and spirited nightlife, and Sydney did much the same in 2000. Sander's hotel, like many, has undergone renovation in the run-up to the games.

“We will see a big vacuum after the Olympic Games,” he said. “If Beijing is not able to transmit a very positive picture about the city and facilities — if we can't convince people to come to Beijing we have a big problem.”