Sri Lanka’s tourism at crossroads: Wake-up call on World Tourism Day

Future growth must balance increased arrivals with a focus on high-value tourism and sustainable site management 

The targets may slip, but the opportunity remains. To salvage momentum, authorities must; fast-track visa reforms through Parliament and implement before October, launch at least an interim global campaign leveraging on existing accolades in promotion, coordinate with airlines to expand connectivity, empower the private sector as partners, not bystanders and shift focus from ad-hoc roadshows to a coherent strategy 

By Charumini de Silva

As the world marks World Tourism Day today, on 27 September, Sri Lanka stands at a critical juncture. Tourism has long been hailed as the country’s “low-hanging fruit” for economic revival and the year 2025 began with bold ambitions; 3 million arrivals and $ 5 billion in earnings. Yet as the final quarter approaches, those lofty goals are slipping out of reach.

By mid-September over 1.67 million tourists had visited Sri Lanka, bringing in an estimated $ 2.3 billion in revenue. These figures represent the country’s strongest post-crisis rebound and underscore enduring global demand for the island’s offerings. But they also reveal a widening gap to hit the original target. Sri Lanka would need to attract over 1.3 million more visitors in just three months and double its earnings in the final quarter.

On a day dedicated to reimagining tourism’s role in development, Sri Lanka’s reality is sobering. The problem is not lack of demand. It is as industry stakeholders repeatedly stress, a failure of execution. Announcements abound with free-visa travel, global campaign, nation branding; but the delivery has stalled. For policymakers and the private sector alike, World Tourism Day is less a celebration than a wake-up call.

Progress and pressure 

The official Year in Review January-June 2025 report offers a clear snapshot of progress (https://www.sltda.gov.lk/storage/common_media/).

Sri Lanka welcomed 1.17 million visitors in the first half of the year, reflecting a 15.6% year-on-year (YoY). Arrivals peaked in January at 252,761 but then tapered through the monsoon season bottoming out at 132,919 in May before stabilising in June 2025.

By the end of the first eight months of the year, arrivals had reached 1.56 million and by mid-September 1.67 million. To meet the 3 million goal, Sri Lanka now needs sustained inflows of over 330,000 tourists per month in the last quarter, numbers the country has never achieved before. 

Revenue tells a similar story. In the first half earnings were estimated at $ 1.17 billion, with an average daily spend of $ 172 and a stay of 8.3 nights. By September, revenue had reached $ 2.3 billion, leaving another $ 2.7 billion to be generated in just over three months. For comparison, January, the strongest month this year, brought in around $ 400 million. Doubling that performance consistently is unrealistic without transformative policy action. 

Earlier this month, Tourism Deputy Minister Prof. Ruwan Ranasinghe acknowledged the country will not reach its ambitious target of 3 million arrivals, but will not downsize its target. “Realistically, we will not reach the 3 million target this year, but we will not downgrade our target. With just three months left, I feel we will end up just over 2.5 million,” Prof. Ranasinghe said (https://www.ft.lk/top-story/3-m-arrivals-target-out-of-reach/26-781478).

Contrary to the Deputy Minister’s remarks, Sri Lanka Tourism Development Authority (SLTDA) and Sri Lanka Tourism Promotion Bureau (SLTPB) Chairman Buddhika Hewawasam last week announced that they have revised original tourist arrival forecast for 2025, lowering it from 3 million to a more realistic 2.6 million. Described the target as a “historical high” that would mark strong recovery and growth in the sector. 

Strengths and vulnerabilities in markets

A closer look at the composition of arrivals, underscores both opportunity and risk. 

In August, India, the UK, Germany, China, and Italy played a pivotal role in revitalising Sri Lanka’s tourism sector, contributing significantly to the month’s 20.4% growth in arrivals.

India remains the dominant force in Sri Lanka’s tourism, with 325,595 arrivals during the first eight months, a 25.9% YoY increase underscoring its proximity, cultural ties and affordability. Europe continues to provide high-spending, long-haul visitors, led by the UK, Germany, France, and the Netherlands, all registering growth, alongside steady contributions from Australia and the US. However, arrivals from Russia and China have slipped by 3.3% and 3.7% respectively, reflecting economic challenges, travel restrictions, and shifting preferences.

During the first half (1H) of 2025, India continues to anchor inflows, with 242,000, up 31% YoY. However, Indian tourists average just five nights per stay, generating lower per-visitor revenue than Europeans, who stay 10-15 nights. 

This imbalance reveals two vulnerabilities; over dependence on key markets and limited penetration into underdeveloped, but high-yield regions such as the Americans and Middle East. As global competition intensifies, Sri Lanka’s narrow ways base leaves it exposed. 

Seasonal constraints, structural weaknesses, sustainability 

Seasonality remains a defining challenge. The first quarter consistently outperforms, while arrivals slumps during the monsoon. Wildlife parks, a major draw, mirror this pattern. Yala National Park generated Rs. 1.6 billion in the 1H, but revenue dropped sharply in April. Coastal attractions such as Mirissa and Hikkaduwa also see demand collapse in the off-season.

Infrastructure expansion is uneven. Sri Lanka has 56,700 registered rooms, up 6.2% YoY, but nearly 78% of capacity is concentrated in Colombo, Galle and Kandy. Northern and Uva Provinces remain underdeveloped with fewer than 3,000 rooms each. Without regional diversification, congestion in existing hubs and underutilisation of emerging areas will persist. 

Connectivity compounds these issues. Over a third of arrivals funnel through gulf hubs like Dubai, Doha and Abu Dhabi; while Indian cities account for another quarter. This reliance offers access, but also vulnerability with any disruption in regional carriers or slots could sharply impact inflows.

However, industry experts stress that unchecked over-visitation threatens key attractions. Yala National Park is already overburdened, with some operators removing it from itineraries due to environmental degradation and poor visitor experience. Minneriya’s famed elephant ‘Gathering’ and Sigiriya Rock Fortress, which sees up to 15,000 climbers a month, face similar risks, raising safety and conservation concerns.

Experts warn that without urgent regulation and better visitor management, Sri Lanka risks “killing the goose that lays the golden eggs.” Future growth must therefore balance increased arrivals with a focus on high-value tourism and sustainable site management.

Policy paralysis: Announce first, deliver later 

Despite clear structural challenges, the greater barrier lies in policy execution. 

Tourism Deputy Minister Prof. Ruwan Ranasinghe has acknowledged delays in rolling out both the global destinations campaign and nation branding strategy. Fresh tenders will be called after previous bids were scrapped and with authorities confirming that a comprehensive “nation branding” push is at least a year away (https://www.ft.lk/front-page/Sri-Lanka-stumped-over-tourism-identity/44-781625). An expert committee promised in June for Nation Branding has still not been appointed. 

Meanwhile, the highly publicised free-visa travel for 40 countries has stalled, requiring Parliamentary approval. Authorities insist it will materialise “soon”, but industry leaders warn that it has already negatively impacted the winter bookings. 

This pattern has become familiar with bold announcements and sluggish follow-through. “Doing promotions without proper marketing planning is not helping the country to do an effective global campaign,” industry analysts said.

Wasted opportunities

Industry stakeholders have not minced words. They argue that Sri Lanka is squandering momentum. 

“October to March is the peak winter traffic for Sri Lanka. They wasted the opportunity to launch a campaign for almost a year and are now scrambling at the last moment. We can say with confidence Sri Lanka will not hit the 3 million arrivals or $ 5 billion revenue target,” a senior industry leader said. 

Others point to missed chances to leverage accolades, such as being ranked among the best islands, destinations which could have anchored global campaigns. The absence of private sector collaboration, they warned, reflects a deeper disconnect, as Government institutions remain preoccupied with internal reforms such as amending the Tourism Act, while neglecting the urgent need for a marketing strategy.

As the German-Sri Lanka Tourism Dialogue recently stressed, unlocking growth requires urgent action, consistent policy and real partnership with the private sector. Without this, accolades and potential will continue to be wasted. 

Projections

Based on current trajectories, three scenarios emerge. In the base case, arrivals average 280,000 per month from August to December. Sri Lanka would close the year with around 2.78 million arrivals, below target but still an all-time high. 

In the optimistic case, with arrivals at 330,000 per month, the 3 million mark is within the reach. But this would require immediate visa reforms, aggressive campaigns and flawless seasonal performance, conditions that appear unlikely. 

In the pessimistic outlook, with just 250,000 visitors, arrivals would end around 2.6 million. This aligns with the revised official flow target, quietly acknowledged by the Sri Lanka Tourism Development Authority (SLTDA) in its Growth Scenarios report 

(https://www.sltda.gov.lk/storage/common_media/Growth_Scenarios_2025_final_1.pdf).

Revenue projections are even more constrained. Even with higher winter spend, the $ 5 billion target appears unattainable. Independent projection by CT Smith Securities, forecasts only $ 3.4 billion, alongside 2.4 million arrivals, whilst projecting visitors to climb to 3 million and tourism revenue to $ 4.3 billion in 2026 (https://www.ft.lk/front-page/Sri-Lanka-tourism-may-fall-short-of-2025-arrival-and-earning-targets%C2%A0/44-781767).

The cost of delay

Every delay has a price. Tourism bookings are made months in advance. By failing to launch campaigns in time, for the 2025 winter season, Sri Lanka ceded first-mover advantage to competitors like Maldives, Thailand and Indonesia. 

This is not just about numbers. It is about credibility. Repeated postponements signal inconsistency to investors, airlines and global operators. The narrative risks shifting from “Sri Lanka is back” to “Sri Lanka cannot deliver”—a perception far harder to reverse. 

World Tourism Day is meant to celebrate progress and chart the future. For Sri Lanka, it should be a day of reckoning. 

The targets may slip, but the opportunity remains. To salvage momentum, authorities must; fast-track visa reforms through Parliament and implement before October, launch at least an interim global campaign leveraging on existing accolades in promotion, coordinate with airlines to expand connectivity, empower the private sector as partners, not bystanders and shift focus from ad-hoc roadshows to a coherent strategy. 

The Government’s credibility now rests less on promises than on delivery. 

Ambition is not enough 

Sri Lanka is marching towards its record 2018 arrival levels of 2.33 million visitors, which at the time generated $ 4.3 billion. But Sri Lanka’s tourism story in 2025 is one of ambition constrained by delay. The numbers prove global demand exists and without urgency in execution, the country risks falling short of its own vision.

The World Tourism Day offers a stark reminder that tourism is not an abstract pillar of recovery, but a sector where planning, timing, credibility and sustainable expansion determine outcomes. For Sri Lanka the wake-up call is clear. Execution, not ambition, will decide whether this year is remembered as a turning point or a wasted opportunity.