Sri Lanka must shift from volume to value to unlock full tourism potential: SLTDA Chairman

• Highlights value gap and over-tourism pressures

Sri Lanka Tourism Development Authority (SLTDA) Chairman Buddhika Hewawasam urged the industry to pivot toward higher-value tourism, warning that the country’s current yield per tourist remains far below its potential despite rising arrivals and strong seasonal performance.

Speaking at the Tourist Hotels Association of Sri Lanka (THASL) Annual General Meeting on Monday, Hewawasam said that while the country is on track to surpass key tourism milestones, the average revenue per tourist is still significantly lower compared to competing destinations across Asia.

He noted that most travellers visiting Sri Lanka spend around $ 300 per day, whereas competing destinations such as Malaysia, Indonesia, and island destinations across Southeast Asia report much higher yields.

“Our challenge is not arrivals, its value. Countries around us are earning far more per visitor. We cannot sustain growth if we continue to attract high volume but low value,” he said.

He also highlighted that Sri Lanka still struggles with seasonality, experiencing five strong months and seven weaker months.

 “We need year-round appeal. Without that, we cannot meet revenue targets even if arrivals rise,” he added.

Hewawasam also revealed that Sri Lanka was to lose significant visitor numbers, with airlines cancelling around 45 flights weekly, a trend expected to continue if bottlenecks remain unresolved.

However, he said quick interventions by the private sector and relevant authorities have prevented the loss of 32,000 to 50,000 tourists in recent months amidst strained infrastructure during peak months.

Noting that Sri Lanka already crossed 2 million tourists for 2025, Hewawasam cautioned that volumes alone will not fix structural issues.

He stressed that Sri Lanka needs a minimum of 180,000–200,000 arrivals per month consistently to sustain industry-wide profitability, but more importantly, the country must focus on attracting travellers with higher spending power.

Accommodation bottleneck and domestic aviation constraints

Hewawasam acknowledged a severe accommodation imbalance, noting that Colombo offers more than 11,000 rooms, but many key tourism regions lack capacity.

“There is a chicken and egg situation; hotels are reluctant to invest because air connectivity is low and airlines do not increase frequencies because room capacity is limited,” he said.

He said SLTDA has released 3,000 acres for tourism investment, receiving over 130 proposals, with approvals for several expected by year-end. “This is aimed at unlocking accommodation supply in key regions,” he added.

The Chairman stressed that Sri Lanka must build more entertainment, nightlife, events and year-round activities to compete for long-stay and high-spend travellers.

“Tourists want experiences; entertainment, concerts, curated events and nightlife. We cannot rely only on beaches and heritage. The modern traveller spends on experiences, not just rooms,” he said.

The Chairman said the destination urgently needs a unified nation-branding strategy to secure sustained growth. 

He asserted that Sri Lanka does not simply need more advertising, but a comprehensive, globally aligned brand-positioning campaign.

“We do a lot of marketing, what we lack is brand positioning,” he said, predicting that without a strong country brand, Sri Lanka will struggle to compete in a region where destinations such as Japan, Indonesia, and Malaysia are aggressively repositioning themselves.

“A dedicated marketing and nation-branding unit is being established with support from the World Bank, with a Cabinet paper already submitted. Once approved, it is expected to bypass bureaucratic delays and implement long-awaited global campaigns,” he stressed.

He said Tourism Development Levy (TDL) revenue remains essential to funding major branding and development initiatives.

Hewawasam said Sri Lanka is simultaneously battling over-tourism during peak periods, particularly in December.

“Data shows Colombo alone has around 16,000 rooms, but large areas with high tourism potential still lack sufficient accommodation. In many districts, hotel density is less than one property per square kilometre, with some zones offering only 800 rooms in total,” he pointed out.

He said this imbalance and overcrowding in established hubs and lack of development in emerging ones, stems largely from poor accessibility. 

On the aviation front, Hewawasam noted that Sri Lanka needs more domestic routes, more frequencies, and lower seat costs to support regional dispersal of tourists.

He also called for stronger coordination between SLTDA, THASL, and provincial stakeholders to expand visitor experiences nationwide.

“We cannot grow tourism in isolation. The associations, hotel sector, airlines, and regulators must work together. This is the only way to transform Sri Lanka into a high-value destination,” Hewawasam said.