Sri Lanka’s tourism industry is posting arrival numbers that many destinations would envy, yet it is increasingly troubled by a disconcerting trend: the country is welcoming record numbers of visitors, but tourism earnings are struggling to keep pace.

In May, Sri Lanka recorded its highest-ever monthly increase in tourist arrivals, welcoming 145,745 visitors, a 10% rise from a year earlier. However, tourism revenue fell 5.1% year-on-year to US$155.7 million, according to official data. For the first five months of 2026, earnings declined 12% to US$1.36 billion, despite continued growth in arrivals.

“These figures highlight a growing challenge for a country that depends heavily on tourism as a source of foreign exchange: attracting more tourists is no longer enough. The bigger question is how much they spend once they arrive,” a leading hotelier told The Island Financial Review.

“After being battered by the 2019 Easter Sunday attacks, the COVID-19 pandemic, and the 2022 economic crisis, Sri Lanka recorded a historic 2.36 million visitors in 2025. Authorities are now targeting 3 million arrivals in 2026. But beneath those anticipated numbers lies a more complicated story,” he said.

Elaborating further, he noted: “Tourism revenue reached roughly US$3.2 billion in 2025; only marginally higher than the previous year, despite a 15% jump in arrivals. More tellingly, earnings remain significantly below the levels achieved in 2018, when visitor numbers were comparable. So, the decline in average tourist spending has become impossible to ignore.”

According to official surveys, average daily tourist expenditure has been revised downward to approximately US$148 per day, compared with previous estimates exceeding US$170.

Referring to this trend, he added: “Destinations such as the Maldives attract substantially higher per-visitor spending through luxury tourism, premium experiences, and high-end accommodation. The debate should increasingly revolve around whether Sri Lanka is pursuing the right tourism model.”

For years, the country focused on boosting arrival numbers through aggressive marketing campaigns, Instagram influencer partnerships, and social media promotions. As a result, Sri Lanka may now be attracting too many budget-conscious travellers while failing to draw those seeking immersive, higher-value experiences rooted in the nation’s natural and cultural assets. “Are we grappling with the tension between ‘high-volume tourism’ and ‘high-value tourism’?” he asked. “Sri Lanka must encourage longer stays, diversify experiences beyond beaches and cultural sites, and develop premium offerings in wellness, eco-tourism, adventure, luxury rail, culinary, and wildlife sectors if it hopes to increase per-visitor spending.”

An inbound travel operator concurred, stating that the future should depend less on bringing in more people and more on attracting the right mix of travellers.

Against this backdrop, Sri Lanka appears to be intensifying efforts in key source markets. One of the most notable initiatives took place recently in Moscow, where Deputy Tourism Minister Prof. Ruwan Ranasinghe led a delegation to the sixth “Let’s Travel International Tourism Forum.” Discussions with Russian officials focused on direct flights, simplified visa procedures, destination promotion, and stronger bilateral tourism cooperation.

Russian travellers have become increasingly important to Sri Lanka’s tourism sector. Russia consistently ranks among the island’s top source markets, alongside India and the United Kingdom. In early 2026 alone, tens of thousands of Russian visitors arrived in Sri Lanka, underscoring the market’s growing significance. The Moscow forum also signalled a broader strategy: expanding beyond traditional hubs and reaching travellers across multiple Russian regions.

“The island’s beaches, wildlife reserves, ancient cities, tea-country landscapes, and wellness traditions already provide a strong foundation, and Sri Lanka has largely solved the problem of attracting visitors. Its next challenge is more difficult: transforming a popular destination into a high-value one. That will require investment in infrastructure, premium tourism products, transport connectivity, destination management, and visitor experiences that encourage travellers to spend more and stay longer,” the inbound operator said.

Tourism Minister Vijitha Herath recently told parliament that the current revenue figures reflect more accurate measurement methodologies rather than a collapse in spending. Referring to this, the hotelier said,” While that may be a technically valid assertion, it does little to mask a far more pressing reality: Sri Lanka is no longer attracting the high-spending travellers it once did. The data, when viewed alongside declining average daily expenditure and stagnant overall earnings, points to a structural shift in the country’s visitor profile, one that favours volume over value. Until Sri Lanka recalibrates its tourism strategy to prioritise quality over quantity, it risks becoming a destination that everyone visits but few truly invest in.”

By Sanath Nanayakkare