Until recently, tourism had been a bright spot in the city?s increasingly gloomy economic picture, fueled largely by foreign tourists taking advantage of a weak dollar.

But many hotel operators have begun reporting that bookings for the next few months, traditionally the strongest part of the year, are falling below last year?s levels. Cancellations are also on the rise, and corporate travel executives are negotiating for steeper discounts on room contracts for 2009.

?We?re already seeing cancellations,? said Vijay Dandapani, chief operating officer for Apple Core Hotels, which has five budget hotels in Manhattan with a total of almost 800 rooms. ?There?s hesitancy in bookings. We hold our breath and fill up rooms at the last minute. Occupancy has been weaker in October, traditionally one of the strongest months.?

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