Not all early birds catch the worm, at least where the Beijing hotel industry is concerned. With fewer tourists now expected in Beijing for the Olympic Games in August than had been forecast, hotel guests seeking rooms at the front desk may get a better rate than those who made reservations a year ago. Compared with two months ago, rates at Beijing's mid- and low-end hotels and guest houses are now 2 per cent lower, with 54.5 per cent of rooms in four-star hotels not yet reserved in August, according to the Beijing Tourism Bureau. The average rack rate at four-star hotels has dropped 42 yuan to 2,185 yuan (HK$2,485) per night. Three-star hotels dropped their rates by 33 yuan to 1,523 yuan and two-star hotels cut prices by 85 yuan, the bureau said last week. Only the rack rates at five-star hotels were higher, rising 200 yuan to 3,464 yuan a night on average. The proportion of these luxury rooms with reservations edged up by two percentage points to nearly 80 per cent of capacity. Beijing media reported as early as June last year that many luxury hotels were close to fully booked, with the highest rate 200,000 yuan for 16 nights in August. The deputy director of the Beijing Tourism Administration, Xiong Yumei , said the falling prices were due to 'reservations expanding from downtown hotels to cheaper suburban accommodation'. Observers attribute the decline to the fact Beijing is receiving fewer overseas tourists than mainland authorities and hotel sector investors had optimistically estimated years ago. 'This is a difficult year for the mainland's tourism. The international and domestic situation is complicated,' said Zhang Hui , dean of Beijing International Studies University's tourism administration department. Factors which may hold tourists back include the Tibetan unrest in March, the Sichuan earthquake in May, the protests in western countries during the global Olympic torch relay and calls to boycott the Games. To enhance security, Beijing has tightened visa approvals and banned large social gatherings including fairs and conventions for June, July and August. 'Considering the political and social situation, it is already a good performance that five-star hotel reservations have reached nearly 80 per cent,' Professor Zhang said. The mainland had pinned its hopes on the Olympics to heat up the tourism sector. Early this year, the China National Tourism Administration (CNTA) expected 59 million trips would be made this year by overseas tourists, who it projected would spend at least a night on the mainland, an 8 per cent rise from last year. In the first three months of this year, 32.6 million foreign visitors arrived, an increase of 7 per cent year on year. Chen Jian , executive president of the Beijing Olympics Economic Research Association, said arrivals from April to August may be lower than expected. 'Beijing expected about 500,000 overseas tourists during the Olympics. It is a calculation using 16,800 - the number of athletes and coaches - times a coefficient of 25-30, as according to the experience of other Olympic hosts,' he said. 'Now it seems the estimation may have been a little optimistic.' Beijing has 5,892 hotels and guest houses with 336,000 guest rooms and 660,000 beds. The number of hotels in the city rose from 613 in 2004 to 815 this year. Investors ignored a 2005 government warning that overcapacity might be a problem after the Games and an average occupancy rate for high-end and mid-range hotels that year of just 65 per cent. But Mr Chen said Beijing would not be plagued with an oversupply after the event, thanks to its robust economic growth. 'Beijing's tourism has been growing so rapidly. It received 1 million overseas tourists in 1987, 2 million in 1993, 3 million in 2003 and 4 million last year. The economic development is expected to give the hotel sector solid support,' he said. A survey conducted by China Tourism Research Centre, a CNTA think-tank, showed 63 per cent of Beijing hotel managers expected business revenue to decline in the fourth quarter of this year from the third quarter, said the centre's deputy director Dai Bin at a forum this month. 'However, for 2009 and 2010, 45 per cent of the managers think revenues will go up, 40 per cent think they will be unchanged and only 15 per cent expect a drop,' Mr Dai said.