Tourism earnings sticky despite rising arrivals

In what appears to be a paradox in tourism statistics, earnings from the trade have shown little movement despite monthly growth in arrivals. 

Earnings for October were recorded at US$ 186.1 million, a marginal change from the US$ 185.6 million recorded in the same period last year. This stagnation comes despite arrivals rising sharply to 165,193 in October from 135,907 a year ago.

The disconnect between arrivals and earnings, which first became apparent in September, has drawn criticism from industry stakeholders. Recently, the Sri Lanka Tourism Alliance argued that flawed accounting methods are distorting the sector’s true performance. The Alliance points to the continued reliance by state officials on a 2018 survey by the Sri Lanka Tourism Development Authority, which uses a sample of 5,000 departing tourists to estimate monthly earnings based on self-reported spending.

While Sri Lanka initially targeted US$ 5.0 billion in tourism earnings for 2025, current figures suggest this goal remains out of reach. In the first ten months of the year, the country earned only US$ 2.66 billion, a modest 4.9 percent increase from the previous year, even as cumulative arrivals rose 16.7 percent to 1.89 million.

Despite these statistical discrepancies, the government remains keen on supporting the industry. Plans are underway to develop over 900 under-utilised tourist bungalows and resorts into income-generating units via private sector partnerships. 

Additionally, Rs. 2.5 billion has been allocated from the Tourism Development Fund to revitalise Beira Lake in Colombo, while another Rs. 1 billion is earmarked for the development of domestic airports in Sigiriya and Trincomalee, as well as the expansion of the Jaffna International Airport.