By: Staff Writer
September 01, Colombo (LNW): Sri Lanka’s tourism sector is confronting an uncomfortable contradiction: visitor numbers remain comparatively strong, yet the foreign exchange generated by those visitors is weakening.
For an economy dependent on foreign currency inflows, that disparity could prove more important than the headline arrival figures celebrated by policymakers.
Hotel Association of Sri Lanka President Asoka Hettigoda has now called for a fundamental rethink of tourism strategy. Instead of measuring success primarily through arrivals, he argues that Sri Lanka must target travellers who spend more, remain longer and engage more extensively with destinations and local communities.
The evidence supports his warning.
In 2025, Sri Lanka welcomed a record 2.36 million tourists, 15.1% more than in 2024. However, tourism earnings rose only 1.6%, reaching $3.22 billion from $3.17 billion.
The 2018 comparison is particularly damaging. Sri Lanka attracted more than 2.33 million tourists that year but earned approximately $4.38 billion.
The implication is unmistakable: visitor volume has recovered, but visitor value has not.
The problem has become more serious in 2026. Tourism earnings fell 11.8% during the first six months to $1.51 billion. June alone recorded earnings of $151.1 million, down 10.8% year-on-year.
Arrival growth has meanwhile stalled. Between January 1 and August 16, the country received 1,456,735 tourists, compared with 1,491,046 during the same period in 2025.
August has provided little relief. Only 113,307 tourists arrived during its first 16 days, 7.68% below the 122,758 recorded during the comparable period last year.
July arrivals also slipped slightly, from 200,244 to 196,845.
India continues to dominate the source-market landscape. By August 16, 363,585 Indian visitors had arrived, while India had accounted for around 27% of Sri Lanka’s total arrivals in 2025. Britain and the Netherlands followed as important markets.
Hitherto the concentration of arrivals from major markets creates another policy question: are marketing strategies targeting the right consumers within those markets?
Sri Lanka needs tourists who purchase more than accommodation and basic transport. The objective should be to encourage spending on wellness, adventure, heritage, luxury, food, entertainment, shopping, wildlife and experiences that connect visitors with local economies.
The timing is particularly important because accommodation capacity is expanding rapidly. The country now has more than 55,000 rooms, with registered capacity exceeding 58,000 after approximately 4,600 rooms were added in 2025.
More rooms without proportionately higher visitor expenditure could intensify competition and undermine profitability throughout the sector.
The Government has already acknowledged the deteriorating outlook by cutting its 2026 targets to 2.5 million arrivals and $3.5 billion in earnings, from earlier targets of three million and $4 billion.
But even the revised earnings target is challenging. With only $1.51 billion earned in the first half, Sri Lanka must generate approximately $1.99 billion during the remaining six months to reach $3.5 billion.
That requires a substantial acceleration.
The longer-term ambition is even more demanding: five million tourists and $10 billion in revenue by 2030.
Sri Lanka therefore faces a choice between pursuing more tourists or more valuable tourists.
For a country seeking sustainable foreign exchange earnings and employment, the second strategy may ultimately matter far more than another arrival record.
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