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If you have one of those "arrive at midnight, depart at 6:00am" layovers, do yourself a favor and just stay at the airport hotel. If you have a day in town, consider the Jesselton Hotel. It is in town, walking distance to malls, dive shops, the night hawker stalls, etc. It's a old, very small hotel that takes pride in their place.
We are back. We did stay at shangri la tanjung aru resort and spa. It was about 10 minutes from the airport. It was not cheap but it was a five star and worth the price. We had upgraded to the Kinabalu Club so we got a full breakfast in the morning, 2 hours of cocktails in the evening, snacks, juice, sodas through the day that was included. Separate check in and check out area so you can avoid the large front desk area. I would certainly stay there again and I would do the upgrade.
1. There is no airport hotel. There are hotels nearby, depending on which terminal you landed at.
2. Jesselton is not a cheap hotel but a pricey boutique hotel in the middle of the CBD center of the city.
to clarify for the pedantic, it is correct that there is no hotel within the terminal. You have to go just outside the airport gate to get to one. And I stick by my recemmendation on the Jessleton after having stayed in tgat, the Shangri-la, Hyatt, Promenade, and two backpacker style places in town.