Tourism must focus on value, not volume

Our tourism industry needs to reconsider how it measures success. For too long, the sector’s performance has been judged primarily by the number of international arrivals, with ambitious annual targets becoming the centrepiece of tourism policy. Yet, the latest figures offer a timely reminder that arrivals alone do not tell the full story,  and setting such arbitrary numbers just sets the stage for failure while the true story may be different.

According to Central Bank data, tourism earnings during the first nine months of 2026 declined by 9.2%, falling to $ 2.25 billion  from $ 2.47 billion during the corresponding period last year. International tourist arrivals also registered a marginal decline of 1.8%, with around 1.7 million visitors arriving during the period.

At this rate, the industry is unlikely to achieve its ambitious target of 2.6 million tourist arrivals for the year. But perhaps that should not be the principal concern. The more important question is why the country is earning less from the visitors it attracts.

A significant proportion of those entering Sri Lanka on foreign passports are former Sri Lankan nationals, who have migrated overseas and are returning to visit family and friends. While their contribution to the economy is undoubtedly valuable, their travel patterns and spending behaviour may differ considerably from those of conventional leisure tourists. Consequently, treating every arrival as an equivalent tourism success risks creating a misleading picture of the industry’s actual performance.

We must also recognise that its tourism product has a finite carrying capacity. More visitors do not necessarily translate into greater prosperity. Beyond a certain threshold, increased arrivals can place pressure on infrastructure, natural resources, cultural sites and the very experiences that make the country attractive. Sustainability must therefore be central to tourism planning.

The real challenge is to increase the economic value generated by each visitor. Greater diversification is essential. While promoting Sri Lanka in traditional Western markets remains important, India and other Asian markets deserve considerably greater attention. These markets offer geographical proximity, growing middle-class purchasing power and opportunities for repeat travel. More importantly, a stronger regional visitor base could provide a buffer when geopolitical developments disrupt travel from other parts of the world.

Connectivity must become a national priority. Better air links, increased flight frequencies and stronger regional connections can expand access to Sri Lanka, while encouraging higher-spending travellers to consider the country. Tourism promotion cannot succeed independently of an efficient aviation strategy.

The industry should also place greater emphasis on Meetings, Incentives, Conferences and Exhibitions (MICE) tourism, alongside high-end leisure travel. Business events, international conferences and corporate gatherings can generate substantial economic activity, 

while supporting hotels, restaurants, transport operators and other service providers. Similarly, attracting premium travellers, who stay longer and spend more can deliver greater returns without placing excessive pressure on destinations.

There is also a need for pragmatism when considering the country’s tourism offering. Sri Lanka should be willing to examine opportunities to attract high-spending visitors from South Asia, including through a more open discussion on regulated entertainment and gaming facilities. Rather than allowing historical sensitivities to prevent a policy debate, the Government should objectively assess the potential economic benefits, regulatory safeguards and reputational implications of such developments.

The next phase of tourism development must be guided by strategy rather than statistics. Sri Lanka does not necessarily need more tourists. It needs better-connected markets, higher-value visitors, diversified source countries and a tourism product capable of generating greater economic returns.