### SME Survival Strategies for Sri Lanka’s Tourism Sector 📈

A landmark study is underway to determine why innovation alone is failing to secure the long-term survival of Sri Lanka’s tourism small and medium enterprises (SMEs). With the industry targeting 3 million arrivals by the end of 2026, the focus has shifted from mere recovery to sustainable continuity. • Sector Significance Tourism SMEs—including guesthouses, boutique hotels, and tour operators—account for nearly 40-50% of national tourism revenue. These businesses are primarily owner-managed and highly vulnerable to external economic and climate disruptions. • Key Research Pillars Preliminary data suggests survival depends on "Sustainable Dynamic Capabilities" rather than just new ideas. Key focus areas include: Proactive Adaptation: Shifting from reactive changes to timely, relevant innovations. Resilience Speed: The ability to recover rapidly after periods of economic or global decline. Strategic Balance: Aligning daily operational needs with long-term business continuity. • Current Market Context Based on provisional 2025/2026 data, while arrivals are rising, average daily spend remains lower than 2018 levels (approx. US$ 148 vs US$ 170-180). This makes the survival of resource-constrained SMEs critical for maintaining the local economic footprint and preventing "tourism leakage." • Call to Action Owners and managers are invited to contribute to this evidence-based study to help shape future policymaking and practical resilience strategies. _Data source: Research on Sustainable Dynamic Capabilities (Feb 2026)_