This topic has been discussed many times in the past and there have been many people who have declared that photocopies are good enough. Well!!!! not always so...
I do not like to associate myself in the hotel business but for the purpose of this post I must.
Our Hotel was visited by the police a few days back and after intruding on our registered guests, discovered that one foreigner had refused to leave their passport with the recepton. We had taken a photocopy trying to appease the guest, but it was to no avail. The hotel fined enough that the whole months profits are gone, and perhaps the next.
Please, please, please......do not get upset or combatitive with the poor receptionist wanting your passport. They are only doing their job, and your refusal could cost a person their livelyhood.
Perhaps stay in 4 and 5 star hotels.... they seem to be exempt from this kind of thing.