That's not how it works, xinetd listens on the port for the service, then starts the service for an incoming request using an ephemeral port. I recommend Stevens Volume 1 for more detail on that.
I'm not sure you can run portmapper from inetd, I've never tried, but setting that aside, you're probably already running the portmapper daemon, you need to shut that down to free up port 111.
If portmapper isn't running use lsof -i to see what is running on that port.
Once you've freed up the port xinetd should be able to bind to that port.
If the error message is coming from portmapper, then you are right about the port conflict and portmapper cannot run on an ephemeral port, and so can't be run from xinetd.