[NotDeadYet]

The part of Borneo you're describing is actually Sabah, a state of Malaysia, not Indonesia.

I stayed at the Rasa Ria as a treat for a couple of nights after climbing Mt Kinabalu. It's nice as a big resort type hotel goes, there's about 5 or 6 all grouped together in the same area. But it's a bit far out of town, very touristy and insulated. If you want proper old world posh then stay at the Jesselton in the centre of KK, real colonial hotel (the only building left standing in KK after the war), boy in pith helmet to open the door for you, Lord Mountbatten used to drink in cocktail bar (and the bartender looks like he was around at the same time). If nothing else, spend the night drinking Singapore Slings there. If staying at KK then I'd rather stay in town, there are loads of cheap hotels in the city centre.

My favourite place to eat in KK was a little cafe round the corner from the Jesselton called Ang's. Plastic tables, chairs and plates but the food is fantastic.

I don't recall the Shangri-La having much of a beach, just a little strip IIRC. There are some nice beaches to the south of KK with some cheap hotels. KK itself doesn't have beaches you'd particularly want to hang around, you need to get out of town.

Alternatively, you can rent cabins on the islands just offshore in the Tunku Abdul Rahman National Park. I stayed on Manukan Island, very nice place. Not a lot on it but far nicer than staying on the mainland. Borneo Divers have a centre on Mamutik Island but the diving isn't particularly impressive, the water is very milky and there isn't much life.

If you want really good diving then go further out to Labuan or across the other side of Sabah to Sipadan (though you have to stay on a nearby island now rather than on Sipadan).

In general, I wouldn't spend more than a couple of days in KK unless I had to. It's just a typical small Asian city, not an awful lot to do and not exactly pretty either. Kinabalu and Poring Parks aren't too far and great for a few days, I've heard the northern tip is really nice and there is loads to do on the east coast of Sabah.

Cheers,

Stuart