Two men who appeared to be homeless argue loudly near the cable car turnaround on Powell Street, accusing each other of stealing a panhandling spot. A man approaches lost tourists, offering to give them directions - after which he'll demand payment.

Several panhandlers crowd the sidewalk in front of the Walgreens up the street, jostling for space to catch shoppers.

The two scenes play out within blocks of each other on a recent morning during the peak of San Francisco's tourist season and the beginning of the convention season. And it is angering the businesspeople and hotel owners who make their money from the panhandlers' unsuspecting targets.

"We're known for the Golden Gate Bridge, trolley cars and panhandlers," said Anna Marie Presutti, general manager of Hotel Nikko in Union Square. "This year, it's gone to a different level. It's not just a street bum sitting up against a building shaking a cup anymore. It's aggressive and it's intimidating."

Hotel guests unhappy

She said her guests have complained of being followed by panhandlers - and one even likened it to being stalked.

John Handlery, owner of Handlery Hotel in Union Square, said it's the worst he's seen in 30 years. He now tells his guests catching an evening play or dinner just a couple of blocks away to take a cab back.

"I had one guest say, 'Well, you told me four years ago you were, quote, working on it. I'm back, and it's worse.' OK, what's my next line?" he said.

Hotel owners around Union Square, Yerba Buena, Chinatown and Fisherman's Wharf are reporting an uptick in complaints this year from guests about aggressive panhandlers, said Joe D'Alessandro of the San Francisco Travel Association, formerly the Convention and Visitors Bureau. He said his organization has had more complaints from tourists and convention groups. The Union Square Business Improvement District, which assesses fees on property owners in a 27-square-block area to pay for security, street cleaning and other improvements, surveyed its members earlier this year and found aggressive panhandling was the top concern.

"There's a marked increase in people's observations of people panhandling, sitting and lying on the street, acting strangely, public urination and public defecation - the whole litany of behaviors that has become really problematic," said Tim Falvey, a member of the district's board.

A matter of degree

Even the panhandlers themselves are complaining. Wilbert Williams, 59, makes $40 a day asking for money. On a recent day outside the Walgreens on Powell Street, his pitch alternated between "$10 for a steak breakfast?" and "Change for a cup of coffee and a sweet roll, please." He said that he's always polite but that a lot of others aren't.

"There's a whole bunch of aggressive people," he said. "They stand in front of your f-ing face and chase you down. Some people are hard-core drug addicts out there, and they are the ones you have to watch out for. Someone like me just likes to eat and drink alcohol."

He said he's even seen his fellow panhandlers enter restaurants. "People are so scared, they give them money just to get rid of them," he said.

Tim Harris and Lucy Bannister stood in line for the cable car while panhandlers, musicians, dancers and Street Sheet hawkers clamored for money around them. The Londoners visited San Francisco 10 years ago and returned with their sons, Alexander, 9, and Joachim, 11. They said panhandling was bad back then - worse than in other cities they've visited - and it's bad now.

"I do always feel guilty if I walk past and don't give," Bannister said shortly before one of her sons dropped change into a singer's bucket.

Searching for a cause

Nobody seems to know why the areas at the heart of the city that attract the most tourists have seen such a spike in aggressive panhandlers this summer.

While the most recent count of the city's homeless shows that the numbers haven't changed much, some speculate that the bad economy has caused them to become more desperate, that the enforcement of the new sit-lie ban has driven them out of neighborhoods like the Haight or that the demolition of the Transbay Terminal sent homeless campers downtown.

Tourism is also up 20 percent compared to last year, according to D'Alessandro. And that helped City Hall craft a balanced budget - and save a lot of homeless programs. "I just want to make sure that everybody realizes the importance of the hospitality industry right now," D'Alessandro said. "If we risk that, we risk losing money that funds the very social services we need on the streets."

Tackling homelessness hasn't been one of Mayor Ed Lee's top priorities, especially compared to his predecessor, Gavin Newsom, who was elected largely based on his Care Not Cash initiative to slash welfare checks in exchange for housing and services and who focused on the issue intensely in his seven years in office.

The mayor's focus

Lee has focused largely on creating jobs, pension reform and balancing the budget. For the first time in years, the mayor's office had no homeless czar after Lee transferred Dariush Kayhan to the Mayor's Office of Housing in March. Kayhan was moved back to the czar position about the same time Lee announced in August that he was running for a four-year term in November's election.

Christine Falvey, the mayor's spokeswoman, said Kayhan wore both hats during his time in the housing office and disputed the notion that Lee hasn't made homelessness a priority. She said Lee saved many homeless services that were to be cut from the budget and has visited homeless drop-in centers and Project Homeless Connect.

"He has focused on it and will continue to do so," she said.

Jennifer Friedenbach, director of the Coalition on Homelessness, said she hasn't noticed a difference between the Newsom and Lee administrations.

"He may talk about it less, but that was one of the critiques of Newsom - that he was a Corvette, all show and no go," she said.

Kayhan said he is meeting later this month with representatives from the Union Square Business Improvement District, the Police Department and the Health Department to discuss ways to combat aggressive panhandling.

Kayhan said 75 percent of aggressive panhandlers are housed, though about a dozen panhandlers interviewed by The Chronicle all reported they were homeless.

"We've moved people into housing, and they have support services on-site," Kayhan said. "However, they haven't changed their destructive behavior. ... This is the next step we need to take, to do a better job of getting them connected to what they need."

Can't sweep them away

Hotel owners want more of a police presence in Union Square and more enforcement of the laws against sitting or lying on the sidewalk and aggressive panhandling.

Tim Falvey,of the Union Square Business Improvement District's board, is heading up a working group to come up with solutions that may include educating tourists about not giving to panhandlers and finding new ways to connect panhandlers with social services.

"We recognize we can't just keep sweeping them across the street to the next guy's area," he said.

Ricky, who wouldn't give his last name, said he's been homeless since losing his telemarketing job two months ago. He approached a number of tourists in Union Square on what he said was his 55th birthday, begging for cash. He aims for $15 a day to afford a bedin a hostel, but he's not aggressive like the others, he vowed.

"They rip people off, steal, lie, do their dope," he said. "They don't take baths. They pee on the streets. They give people bad directions so they'll go to the Tenderloin to get ripped off.

"Being homeless is hell," he said. "Especially on your birthday."