September 15, Colombo (LNW): Sri Lanka’s tourism sector is showing troubling signs, with revenue figures falling sharply in August despite a marked increase in tourist arrivals.
According to recently released figures, the country earned US$ 258.9 million in August 2025—a decline of 8.2 per cent compared to the same month last year.
This drop in earnings comes even as visitor numbers grew significantly. A total of 198,235 tourists arrived in August, up more than 20 per cent from August 2024, when 164,609 visitors were recorded. India continued to lead as the top source market. Yet the rise in footfall has not translated into higher income, revealing a notable decline in average per-tourist spending.
August’s earnings also showed a month-on-month decrease of 18.7 per cent from July’s US$ 318.5 million, raising further questions about the quality and yield of current tourism traffic. This downturn, some analysts warn, could reflect issues ranging from inadequate marketing to poor visitor engagement, sub-par pricing strategies, or an over-reliance on budget-conscious tourists.
Between January and August, Sri Lanka welcomed a total of 1,566,523 visitors, representing a 15 per cent increase from the same period in 2024. Cumulative earnings for the eight-month period reached US$ 2.29 billion—up by 5.7 per cent year-on-year.
Whilst this points to continued recovery following the pandemic and subsequent economic challenges, the slowing revenue growth suggests deeper structural concerns within the sector.
Comparisons to the tourism high point of 2018—when Sri Lanka drew 2.33 million visitors and earned US$ 4.38 billion—reveal just how far the industry remains from full recovery. With only four months left in the year, the government’s ambitious US$ 5 billion earnings target is beginning to appear increasingly unrealistic. Meeting that goal would now require an average of nearly US$ 677.5 million per month—a figure the current trend does not support.
Industry experts have voiced growing frustration over the delay in launching Sri Lanka’s long-promised destination marketing campaign. The proposed rebranding effort, meant to reposition the country on the global tourism map, has faced repeated bureaucratic holdups and now looks unlikely to materialise before the end of next year.
Stakeholders argue that without a strategic push to attract high-value travellers, promote diversified experiences, and reposition the island as a premium destination, the country risks falling into a volume-over-value trap. While footfall may continue to grow, earnings may not follow—putting the sustainability of the industry in jeopardy.
