"When the first Ferrari employees wanted to check in, they were told that their rooms were occupied," read the Welt report.
"After heated discussions, the Italians prevailed."
A hotel spokeswoman confirmed: "It is true that the Chinese families were here, but they are already gone as we are fully booked because of the formula one race."
Welt added that the hotel arranged alternate accommodation near the Kuala Lumpur airport for the passengers' families.
F1 chief executive Bernie Ecclestone commented: "I feel very sorry for the families of the passengers, but ultimately the decision lies with the hotels.
"Imagine what would happen if hotel bookings suddenly become invalid?" he added.
Welt newspaper said that hotel rooms for F1's vast travelling circus are booked "months, sometimes even years in advance".