Sri Lanka tourism revenue drops in March

Foreign exchange earnings from tourism plummeted to $223.7 million in March 2026, marking a 37% decline compared to the previous year, according to Central Bank data citing the tourism promotion authority. This represents the first official revenue report released since the onset of the regional conflict between the U.S., Israel, and Iran on February 28.

Authorities noted that tourism revenue remained lower since last August relative to arrival numbers, following a downward revision of estimated daily tourist spending. This March decline signifies the seventh monthly drop within the last nine months, despite the period typically being part of the peak travel season.

Key performance indicators

• Arrivals: Fell 20% YoY to 184,979 visitors in March.


• Q1 Revenue: Dropped 15% to $954 million for the first three months of 2026.


• 2026 Targets: The government maintains a goal of 3 million arrivals and $4 billion in revenue.


• Daily Spending: Estimated at $148 per tourist, down from the previous $171 estimate.

Historical context and economic impact

The tourism sector, which currently contributes approximately 3% to the national economy, previously reached a peak of 5% in 2018. Since that high point, the industry faced successive challenges, including the 2019 attacks, the pandemic, and a major economic crisis.

In 2025, the island saw record arrivals of 2,362,521 visitors, generating $3.22 billion in revenue—a slight 1.6% increase from 2024. Despite the recent downturn in earnings, the influx of tourism dollars continues to influence national imports and the merchandise trade deficit as workers within the sector circulate their earnings back into the economy.