By: Staff Writer
December 16, Colombo (LNW): Sri Lanka’s inbound tourism sector is recording steady gains in arrivals, but provisional November–December 2025 data suggests the industry remains caught in a structural earnings dilemma. Despite a visible post-crisis recovery in visitor numbers, foreign exchange inflows are struggling to regain the momentum seen before 2020.
SLTDA provisional estimates show that total arrivals for the final two months of 2025 exceeded 465,000, marking a modest improvement over the same period in 2024. Europe, Russia and India remain the dominant source markets, while long-stay travellers continue to account for a growing share of arrivals.
Yet tourism earnings for the period are estimated at US$ 760–800 million, only marginally higher than last year and well below pre-crisis seasonal benchmarks. Central Bank trend data indicates that this gap is largely driven by declining per-visitor spending rather than demand weakness.
The average tourist now spends approximately US$ 148 per day, reflecting a shift toward backpackers, regional travellers and remote workers who prioritise affordability and lifestyle experiences. While this demographic supports occupancy and length of stay, it compresses margins for operators and limits tax and foreign exchange yields for the economy.
Geographically, spending patterns are shifting decisively. Colombo’s dominance as the primary tourism transaction hub has eroded, while leisure destinations particularly in the south are capturing a rising share of visitor expenditure. Ella has emerged as the second-largest tourism spending hub, while Ahangama and Weligama have recorded some of the fastest growth rates nationally.
This decentralisation has accelerated in the aftermath of the 2025 cyclone and floods, which disrupted parts of the southern coastline. Rather than deterring travellers long-term, the disaster prompted a reorientation toward sustainable and community-led tourism. Small operators leveraged social media, flexible pricing and experience-based packages to restore demand within weeks.
Economists argue that this trend presents both opportunity and risk. On one hand, the spread of tourism income beyond Colombo supports small businesses, rural employment and external stability. On the other, the continued erosion of spending power raises questions about the sector’s ability to finance infrastructure, debt servicing and climate adaptation.
To address this imbalance, industry stakeholders advocate a recalibration of promotion strategies. Instead of focusing primarily on arrival targets, Sri Lanka must reposition itself as a value-dense destination, promoting premium wellness tourism, curated nature trails and heritage-based experiences with higher pricing power.
With GDP growth forecast to ease in 2026, tourism remains a key buffer for the balance of payments. Whether it can deliver meaningful economic returns will depend not on how many visitors arrive but on how much value each visitor brings.
