Is This the Comeback of Sri Lanka's Tourism? $1.5 Billion Revenue Suggests So

Sri Lanka's tourism industry is witnessing a resurgence. The Central Bank of Sri Lanka reported that earnings from tourism soared to over $1.5 billion in the first half of 2024, marking a 78% increase year-on-year.

Tourist arrivals hit 1.01 million, up 62% from the same period in 2023. By June 2024, tourism earnings had climbed to $151.1 million, a 23% increase year-on-year, despite a slight month-on-month decline.

The $1.5 billion revenue surge in the first six months is important, especially considering it took Sri Lanka 10 months last year to reach $1.59 billion in tourism earnings from 1.1 million arrivals. The tourism sector’s earnings exceeded $2 billion in 2023.

Tourism arrivals peaked in 2018 in Sri Lanka, when 2.5 million tourists spent $4.4 billion in the country.

Sri Lanka's Tourism Resurgence

This growth is particularly noteworthy considering the economic turmoil Sri Lanka faced just two years ago. In 2022, the country declared a state of emergency amid severe shortages of food, fuel, and medicines, leading to widespread anti-government protests.

Since the devastating Easter Sunday attacks in 2019, Sri Lanka’s tourism industry has faced numerous challenges. However, the sector's resilience and the government’s proactive measures have begun to pay off.

As per the latest tourism data in the first week of July, Sri Lanka Tourism welcomed a total of 43,083 tourists.

This year, Sri Lanka rolled out its global tourism marketing campaign urging tourists “You’ll Come Back for More,” marking the first such campaign since 2007.

Sri Lanka also aims to welcome 2.5 million tourists and attract revenue worth $4 billion by the end of this year.

India: The Top Source Market

India remains Sri Lanka's top source market, contributing around 19% of total tourist arrivals. From January to July 7, 198,161 Indian tourists visited Sri Lanka.

To attract more Indian travelers, Sri Lanka is conducting roadshows in smaller Indian cities like Indore, Vadodara, and Surat.

As part of a broader strategy to rejuvenate its tourism sector and reach a target of 5 million arrivals by 2026, Sri Lanka announced it would issue free tourist visas until March for visitors from India, China, Russia, Japan, Thailand, Indonesia, and Malaysia. This visa-free entry permits visitors from these countries to stay in Sri Lanka for up to 30 days.

In May, the government extended this visa-free entry until May 31. While no further extension has been officially announced, Skift discovered that the visa exemption still applies to tourists from these seven countries, now with a $10 service fee.

SriLankan Airlines' Role

SriLankan Airlines is also playing a key role in this recovery. CEO Richard Nuttall noted the airline's plans to expand its fleet to 25 aircraft by the end of the year, increasing flight frequencies on existing routes and introducing new destinations. Currently, the airline operates direct and codeshare flights to 114 destinations across 62 countries.

The airline has also reported positive performance on its Indian routes, with high yields and a 74% average load factor. The airline has direct services to 9 Indian cities.

Nuttall said the priority is to increase flight frequencies on existing routes once the airline’s strengthens its fleet later this year. Speaking to Business Standard last month, Nuttall said transit traffic from Europe via India to Colombo has tripled since the Covid-19 pandemic.

He said the airline would look to first increase its frequencies to destinations like Delhi and Mumbai and also plans to start flights from one or two new destinations in India by next year.

Currently, SriLankan Airlines has 18 codeshare partnerships with other airlines, including Air India. The airline said it has also been in discussion with Middle Eastern and South Asian carriers for new codeshare partnerships.