Tourism earnings slump 37% in March as arrivals drop

Monday, 20 April 2026 05:03 - - {{hitsCtrl.values.hits}}

Earnings in 1Q down by 15% YoY to $ 954 m
Industry analysts opine faster implementation of free-visa initiative, meaningful rebound in per-visitor spending essential to boost tourism receipts

Sri Lanka’s tourism earnings fell sharply in March 2026, declining 37% year-on-year (YoY) to $ 223.7 million, according to the Central Bank of Sri Lanka (CBSL).

The March figure marks the first official tourism revenue release since the escalation of the US-Israel war on Iran, which began on 28 February and has weighed on global travel sentiment.

March marks the seventh decline in tourism revenue in the past nine months, highlighting sustained pressure on the sector. Earnings had previously dipped in July and August 2025 before recording only marginal recoveries in subsequent months.

The cumulative revenue for the first quarter also weakened, falling 15% YoY to $ 954 million.

The downturn reflects both weaker arrivals and lower per capita spending.

Tourist arrivals in March dropped 20% YoY to 184,979, despite it being part of the peak season.

Meanwhile, authorities have revised down average daily spending per tourist to $ 148 from $ 171 since August last year, following a new survey by the Sri Lanka Tourism Development Authority (SLTDA).

For 2026, Sri Lanka has set ambitious targets of attracting 3 million tourists and generating $ 4 billion in revenue.

In 2025, tourism earnings rose modestly by 1.6% to $ 3.22 billion, while arrivals increased 15.1% to a record 2.36 million visitors, indicating a recovery trend that now faces renewed headwinds.

Tourism, which currently contributes around 3% to the economy, remains well below its 2018 peak of nearly 5%.

Earlier this month, Sri Lanka moved a step closer to rolling out its long-delayed free tourist visa policy, with the Cabinet of Ministers approving the submission of draft regulations to Parliament, signalling renewed efforts to stimulate the country’s tourism sector.

The decision enables the Government to proceed with implementing a six-month free visa program targeting passport holders from 39 selected countries, under provisions of the Immigration and Emigration Act (https://www.ft.lk/front-page/Free-visa-scheme-advances-as-Cabinet-clears-path-for-rollout/44-790333).

However, industry analysts insist that without faster implementation of the initiative and a meaningful rebound in per-visitor spending, arrival numbers alone may not be sufficient to significantly strengthen Sri Lanka’s tourism receipts.