Sandakan: Business has been slow months for Khui Lin Lee, a tour guide who organises trips to the orang-utan rehabilitation centre near Sandakan.

The three little islands off Sandakan bay - where visitors can organise day trips to see turtles coming ashore to lay eggs - are also deserted.

"Some hotels say foreign visitors only make up five per cent of occupancy.You can only find two or three foreign guests at a single hotel," said Khui.

"In the past, sometimes we didn't have enough guides. Sometimes taxis were not enough to carry tourists," she said.

Sabah has not been spared from the impact of the September 11 attacks on the United States.

Tourists from Italy, Sweden, Britain and the United States used to regularly visit the tropical state, but they are hard to find now.

The same is true for its neighbouring Sarawak state, which just like Sabah offers pristine beaches, rainforests and a diverse native tribal culture.

Tourist officials said the September 11 attacks occurred just as tourism in the area was recovering from the kidnapping by Muslim rebels of 21 people, mostly tourists, in 2000 from diving resorts on the islands of Sipadan.

And now fresh fighting between Philippine forces and Muslim rebels on the south Philippine island of Mindanao, just across the border from Sabah, has given a new headache to tour operators.

Sabah's natural riches have drawn traders and raiders for centuries, and among its past masters were the sultans of Sulu, also from the Philippines. Rebels from Mindanao have often retreated to Sabah when pursued by Manila's forces.

"Before the September 11 attacks, people seemed to forget about Abu Sayyaf. Now people are talking about him again," said Khui.

Tourist officials said up to 35,000 foreign tourist traditionally visited Sabah each month, but numbers have halved since September.

"We are badly affected," said one official from the Sabah state tourism office in capital Kota Kinabalu.

"The September 11 attacks are the main reason why tourists don't come here. Fighting in the Philippines has also rattled the nerves of some tourists," he said.

A number of handicraft shops in the city have gone bust because of falling revenues and hotels have slashed rates by up to 50 per cent.

"There used to be 11 handicraft shops in this shopping centre. Three shops have closed down because business has been very bad these days," said one vendor.

The national Bernama news agency reported recently that 918,523 visitors visited Sabah in 2001, short of the targeted one million.
In Kuching, capital of neighbouring Sarawak, the waterfront on the Sarawak river dividing the city is quite, bereft of the tourists who normally stroll along a paved walkway past flower beds, cafes and food stalls.

October's decision by Singapore Airlines, a major regional carrier, to suspend flights to Kuching and Kota Kinabalu to cut costs was another blow to the local tourist industry.

"It's hard to bring tourists here because there's only one direct flight to Kuching. The only direct flight from a foreign country is from Australia. Business is very slow," one antique dealer said.

Tourists come to Kuching to buy tribal artefacts from Borneo in the dozens of shops selling arts and crafts scattered around the city and on its riverbank.

But Sarawak Tourism Minister Johari Openg remains hopeful tourist numbers will pick up again.

Targeting five million visitors a year, he said recently that tourism was expected to contribute at least 15 per cent to the state's economy in five years' time.