State Tourism, Culture and Environment Assistant Minister Assafal Alian said such activities had badly affected Malaysian tour companies genuinely competing for business in the state.

“We are aware that such actions are causing losses to Sabah,” he said to Abidin Madingkir (Upko-Paginatan) during question time at the state assembly today.

Abidin had asked if the ministry was aware that foreign tour agents were “rampantly operating” in Sabah, including opening offices, restaurants and selling local products, even bringing in their own workers such as tourist guides.

Assafal said the issuance of licences for travel companies was under the federal government’s purview, adding that 820 licences had been issued to companies in Sabah.

He said 20 of these companies were wholly owned by foreigners, with Koreans being the highest at 15, followed by China (two) and Japan, Britain and Australia at one each.

He said all foreign travel companies operating in Sabah required a local tour leader, who would act as the company representative and be responsible for handing over the tourists or groups to a local licensed tourist guide.

“The state Cabinet will discuss the matter soon,” he added.

Meanwhile, James Ratib (Upko-Sugut) urged tourism authorities to conduct checks at Kg Air, which was once labelled as the city’s red light district, due to the large presence of Chinese nationals there.

“Many Chinese tourists like to go to Kg Air until late night… what are they doing there?” he asked, adding that he had noticed this during a previous visit with his constituents in the area.

Assafal said they would look into the matter but urged him to work with the authorities on this as well.