As mentioned earlier and as reported widely in the press, foreign tourism seems quite obviously down on the eve of the Olympics. When I've asked restaurant owners and hoteliers what's happening, they've usually blamed visa restrictions.
A U.S.-based reader who has just returned from a trip through China adds these extra explanations, which ring true to me and fill out the picture:
We talked about tourism with several guides [who were] pretty open when it came to government criticism and China's myriad problems.
Anyway, they said that the tour traffic is just way down, and business travel is down, too. Most felt like visa restrictions played somewhat of a role. But they felt like there were two other factors that played at least as big of a role:
1. People planning tours to China are just avoiding the summer of 2008 because of the Olympics madness. Since China is a big trip that most people plan at least a year in advance, travelers just shifted to this spring, or next year, to avoid the crazy traffic and insane hotel prices (3* in Beijing for ~$400 per night).
2. The people who are attending the games will fall into two categories: extremely wealthy people who will be feted by their wealthy and/or powerful contacts (Olympic brass, corporate hosts, governments, etc.), and relatively poor young fans who are backpacking, staying in hostels, etc.
The guides felt like the meat and potatoes of their industry is curious upper-middle-class westerners. And basically, those folks will stay away in droves or be priced out this summer. As a result, local guides in Beijing basically have two months off for July and August. They all felt that all around China this summer, Western traffic was way down. But intra-China tourism was going strong, reflecting newfound disposable income.
The last sentence, which rings entirely true, is perhaps the most important point for people outside China. I don't have numbers here, but just from observation across the country it's clear that there's a huge surge underway in travel through China by Chinese people. More another time.