Maybe some foreigners wanted to travel cheap in China and then later complained about hotels in the international media and the government decided to restrict foreigners to the better hotels or if it is a security policy. I have no idea. But you cannot walk up to any hotel and book a room. I did that of course and that’s how I know. Only hotels which are 2 stars and above and licensed by the government can host foreigners. All others will turn you back strictly. And when you check-in, like I did in the Dongshan Hotel in Anshan, they will scan your passport in a special passport scanning machine and it goes straight to the Public Security Bureau.