Tourism Earnings Plummet 37% in March Amid Global Tensions 📈

Sri Lanka’s tourism sector faced significant headwinds in March 2026, marking a sharp decline in revenue as regional instability weighed on travel sentiment. • Overall Performance: Earnings for March dropped 37% YoY to US$ 223.7 Mn. This follows the escalation of the US-Israel-Iran conflict in late February. • Quarterly View: Total 1Q 2026 revenue fell 15% YoY, amounting to US$ 954 Mn. • Arrivals & Spending: Visitor numbers for March decreased 20% YoY to 184,979. Crucially, average daily spending per tourist has been revised downward to US$ 148 (from US$ 171). • Economic Context: While tourism contributed 1.6% growth in 2025, it currently accounts for ~3% of GDP, remaining below the 2018 peak of nearly 5%. • Recovery Strategy: The Cabinet has approved draft regulations for a 6-month free visa program for 39 countries to stimulate demand. Analysts note that faster implementation and higher per-visitor spend are vital to hit the annual US$ 4 Bn revenue target.