ZANZIBAR, Tanzania Zanzibar's spectacular beaches, world-class scuba diving and the narrow, winding streets of its ancient stone town have driven a huge expansion of its tourism industry in the past decade.

But just three days of violence last weekend have already dented revenues and raised fears that the years of hard work will be wasted unless a political crisis on the Indian Ocean "Spice Islands" is resolved.

Dozens of people were feared dead after Tanzanian police clashed with opposition activists who want greater independence from the mainland for the semiautonomous Zanzibar islands.

The impact on the tourism industry was immediate.

Tour operators here say they have been swamped with cancellations this week, charter flights carrying European tourists to the islands are being scrapped and cruise ships are suspending plans to call at the islands.

Some hotels are said to be considering closing down for a couple of months as bookings plummet.

With the U.S. and some European governments warning their citizens not to travel to Zanzibar, operators say they have no choice but to recommend that customers make alternative plans.

"It ties our hands as operators because we cannot, and should not, bring people to the islands if the travel advisories say not to," said Graham Wood, operations manager at ocean tours in the historic Zanzibar town.

Ironically, the main Zanzibar island of Unguja has already returned to normal and tourists here believe it to be one of the safest holiday destinations in Africa.

"There are more police than last time but, apart from that, it seems as calm as ever," said Ruth James, on her third Tanzanian safari and beach holiday from New York.

But the worst of last weekend's violence came on the smaller island of Pemba, the stronghold of the opposition Civic United Front (CUF), and tension is still high there.

Pemba boasts idyllic beaches, lush forests and pristine coral reefs and its tourism industry has huge potential.

Philip Mason operates two yachts on the northern end of the island, bringing in tourists for diving holidays. He believes Pemba is one of the world's last unspoiled islands but says the recent violence has already killed his business for this year.

"I might as well pull up anchor and leave. There is something about African politics that just scares European tourists," he said, adding it would take months before his customers would again consider travelling to Pemba even if there are no further clashes.

"It is like a reputation: It takes a lifetime to earn it but you can lose it in a second."

The number of tourists visiting Zanzibar has jumped from 42,000 in 1990 to over 97,000 last year.

(Reuter)