Sri Lanka’s foreign exchange earnings from tourism declined sharply in March 2026, falling by 37 percent year-on-year to US$223.7 million, according to the Central Bank, which cited data from the Sri Lanka Tourism Promotion Bureau.
This marks the first official tourism revenue update released after the escalation of the U.S. and Israel strikes on Iran on February 28.
Officials noted that tourism income has remained under pressure since August last year, following a downward revision in estimated daily tourist spending by the authorities.
The March figure also represents the seventh decline in the past nine months, with revenue falling in July and August before showing only a marginal recovery in the subsequent two months.
Tourism, which contributes around 3 percent to Sri Lanka’s economy, was affected by a 20 percent drop in arrivals to 184,979 in March, despite the period typically being part of the peak season.
Sri Lanka has set an ambitious target of 3 million tourist arrivals and US$4 billion in revenue for 2026, although current trends suggest continued challenges in achieving these goals.
In the first quarter of 2026, tourism earnings also declined by 15 percent to US$954 million compared to the same period last year.
By contrast, the sector generated US$3.22 billion in 2025, reflecting a modest 1.6 percent increase from US$3.17 billion in 2024.
Tourist arrivals grew by 15.1 percent in 2025, reaching a record 2,362,521 visitors, up from 2,053,465 in the previous year.
Historically, tourism contributed nearly 5 percent to Sri Lanka’s economy in 2018, but the sector has since been affected by the 2019 Easter Sunday attacks, the COVID-19 pandemic, and the subsequent economic crisis.
The revenue estimates are based on surveys conducted by the Sri Lanka Tourism Development Authority, which recently revised the average daily spending per tourist down to US$148 from US$171.
Officials also noted that fluctuations in tourism earnings have a direct impact on imports and the trade deficit, as foreign exchange inflows support both national reserves and spending within the broader economy.
