Tourism operators in the historic city of Fenghuang, Hunan province, claim the introduction of an entry fee caused a sharp drop in visitors over the three-day May Day holiday.
"Business for this May 1 holiday was only a third of the previous year's," said hotel and bar operator Jiang Xiaonan. "During previous public holidays all the rooms in Fenghuang were booked out but this year the rate fell, with many hoteliers even offering big discounts."
Another hotel operator said business had been much worse than for the grave sweeping festival in early spring, the last public holiday before the 148 yuan (HK$185) fee was introduced.
"My hotel was full at that time, but for the May 1 holiday I had less visitors," she said. "It is the worst it's been in recent years."
But the local government insists the fee has had no effect, with the ancient city seeing increases in both visitor numbers and revenue. It says there were 102,000 visitors over the three days, up from 99,000 last year, and revenue of 71 million yuan (HK$88.7 million).
Tourism authorities in most other parts of the mainland also reported increased numbers.
Suzhou in Jiangsu was the only city to report a drop in visitors for the holiday - down about 2 per cent.
Its tourism authority blamed the drop on the high fees charged by scenic spots in the city, saying tourists preferred to spend their time in places that did not charge entry fees.
The central government is trying to encourage more domestic tourism, which it hopes can become an engine of economic growth.
The National Development and Reform Commission last month slashed entry fees to more than 1,200 scenic spots by an average of 20 per cent.
It followed debate over the rising entry fees charged by tourist spots. Many tourism industry players fear the rises will dampen domestic tourism, while others claim the price cuts only apply to relatively unpopular scenic spots.
Since the National Day holiday last October, the traffic administration has waived road tolls on public holidays, which tour industry operators see as a boost to short-haul tourism in neighbouring areas.
Beijing's tourism revenue for the May 1 holiday surged 10.6 per cent to 1.98 billion yuan, with 4.97 million visitors, the city's Tourism Commission said.
A survey by the China Tourism Academy and travel agency Ctrip.com found that Shanghai was the most popular city destination.
Although tourists were banned from parts of Sichuan hit by a recent earthquake, the province remained popular with tourists - with visitor numbers up 11.5 per cent to 17.95 million.
With many tourists choosing not to travel in groups this May Day holiday, tour agency operators were not happy with their business.
"It has been a bad year so far and things have got worse," said Wang Hongying, a veteran tour guide in Beijing.
Wang said his bad luck started late last year when new Communist Party chief Xi Jinping launched a crackdown on waste and extravagance by government and party officials, aimed at appeasing mounting public anger over corruption and inequity.
In his "eight rules", Xi ordered government officials at all levels to forgo expensive banquets and lavish official trips.
"The government-funded tour groups have been worst affected," Wang said. "Government departments have cut everything, ranging from the number of tour group members to travel spending and travel time."
Tour agents in Guangxi , Guangdong and Zhejiang said they were facing the same problem.
Guo Yuechen, president of Easy Tour in Beijing, said Xi's crackdown had led to a 30 per cent decline in business.
A tour guide in Guangxi said some small agencies whose main customers had been government departments had shut down.
China Tourism Academy president Dai Bin said: "The market for upmarket tourism services, which used to be mainly purchased by governments, has shrunk badly since the eight rules were issued."
An academy survey in March found that only 3 per cent of those polled would choose to join tour agency trips, compared with 4.7 per cent in 2011.