The ancient alleys of Sanaa are still bustling. Shoppers mingle, traders peddle their wares and children play in the street, all to a cacophonous backdrop of roaring motorbikes and honking cars.

But there is one thing that is almost entirely missing from the oldest and most picturesque part of the Yemeni capital: tourists.

“We have had no clients for a year and a half,” said Madeleine Schaffner from France, who, together with her Yemeni husband, has been running a tour operator for the past 12 years.

This week’s kidnapping of two U.S. tourists by armed tribesmen near the capital was another nail in the coffin for the badly needed tourist industry of this impoverished country, said tour guide Mohammad al-Hubaishi.

“That’s it — 99 percent of tourism has stopped as a result of the kidnappings,” he said.

“The government needs to take harsher measures. If they were in place, then nobody would do it.”

Hubaishi, who has worked in tourism for the last 20 years, was himself kidnapped in Shabwa in 2006, when he was held hostage along with French tourists for 16 days — long by Yemeni standards, where most abductions last just a few days.

Yemen, bordering the world’s top oil exporter Saudi Arabia, surged to the forefront of Western security concerns after the Yemeni arm of al Qaeda claimed responsibility for an attempt to bomb a U.S.-bound plane in December.

Yemen is also witnessing rising violence between government forces and southern separatists; and a truce reached in February with northern Shi’ite rebels who have been fighting the government on and off since 2004 is looking fragile.

Kidnappings of foreigners and Yemenis are common in Yemen, where hostages are often used by disgruntled tribesmen to press demands on authorities.

Most kidnappings are resolved within days with no harm to the hostages, but some have had violent endings. In an unexplained incident, a group of nine foreigners were kidnapped in the northern region of Saada last June, of which three women — two Germans and a South Korean — were later found dead.

YEMEN LOVERS STAY AWAY

Yemen’s struggling economy is badly in need of revenues from tourism, which contribute 3 percent of GDP. The country offers visitors rich historical sites, rugged mountains and pristine beaches. But a number of violent incidents have scared many off.

In 2008, an al Qaeda suicide bomber killed four south Korean tourists and their Yemeni guides while visiting Shibam, a UNESCO World Heritage site dubbed the “Manhattan of the Desert” for its 16th-century tower houses rising up to 16 storeys high.

In January 2008, gunmen killed two Belgian women; and in July 2007, a car bomb killed seven Spaniards in Maarib, a region to the east of the capital.

Some of the European embassies in Sanaa tried to keep travel advice on Yemen positive for as long as possible, a Western diplomat said, but the deteriorating security situation had eventually made this impossible.

There are still plenty of foreigners in Sanaa, but most are residents who work in Yemen. The visitors who come often have professional or family reasons for their trip.

“I am never scared, I don’t know why, but I am never scared,” said Segolene Belier, who was on her fourth visit to Yemen and planning to set up a private aid organisation.

“I live in Paris, I tell myself that I can be blown up there also,” she said, sipping tea in a cafe on the edge of Sanaa’s old city.

Tighter visa restrictions for visitors to Yemen, imposed after it was revealed that the Nigerian behind the December attempt to blow up a plane bound for Detroit had visited Yemen not long before, significantly cut the number of tourists.

Britons were among those who could previously get visas on arrival, but must now apply at Yemeni embassies at home.

“At the beginning it was affecting us. All the agencies and the institutions — they were not ready for this procedure. Now it is getting easier,” said Soraya Abu Monassar, general manager of the Burj Al Salam, a popular hotel housed in one of the old city’s iconic tall buildings.

She said most of the clients of her hotel, which boasts spectacular views of Sanaa and the surrounding mountains, were professionals working for government and non-government organisations.

For Yemen, where more than 40 percent of the 23 million population live on under $2 a day and more than half the young men are out of work, the loss of revenue to an industry estimated to be worth $900 million last year is another huge blow.

“This is a very, very big problem for Yemen. A lot of people work in tourism, it’s one of the only jobs here,” Schaffner said. Asked what she can do to save her business, she shrugged and said: “We wait. We wait.”