Sri Lanka January tourism revenue declined year-on-year despite stronger tourist arrivals, highlighting structural changes in visitor spending patterns as the sector continues its gradual recovery, according to newly released central bank and tourism authority data.
Sri Lanka January tourism revenue dips even as visitor numbers rise
Sri Lanka January tourism revenue fell by 5.6 percent year-on-year to 378.5 million US dollars in January 2026, despite a notable increase in foreign visitor arrivals, data released by the Central Bank of Sri Lanka showed, citing figures from the Sri Lanka Tourism Development Authority.
The decline underscores a widening gap between tourist volumes and actual foreign exchange earnings, largely driven by revised estimates of daily visitor spending. Officials have previously noted that tourism revenue has remained lower than arrival trends since August last year, following a downward revision in per-day expenditure figures used to calculate earnings.
According to the data, January marked the fifth monthly decline in tourism revenue over the past seven months. Earnings had already fallen in July and August before recording marginal increases in the following two months. However, the renewed dip at the start of 2026 suggests that revenue recovery remains uneven, even as arrival numbers continue to improve.
In January, Sri Lanka recorded a 9.7 percent increase in tourist arrivals, with 277,327 foreign visitors entering the country. Despite this growth, earnings from tourism—which contributes close to 3 percent of the island nation’s economy—failed to keep pace, reinforcing concerns about reduced per-capita spending and shorter average stays.
Industry analysts attribute the revenue slowdown primarily to revised survey data on tourist expenditure. The Sri Lanka Tourism Development Authority has reduced estimated daily spending per tourist to 148 US dollars since August last year, down from 171 dollars, following a fresh survey. This adjustment has had a direct impact on headline revenue figures, even when arrival numbers trend upward.
Sri Lanka has set an ambitious target of attracting 3 million tourist arrivals in 2026, banking on improved connectivity, destination marketing, and greater stability following the economic crisis. However, the January performance suggests that higher volumes alone may not translate into stronger foreign exchange inflows unless spending patterns improve.
For the full year 2025, Sri Lanka earned approximately 3.22 billion dollars in tourism revenue, representing a modest 1.6 percent increase from 3.17 billion dollars in the previous year. While this growth marked a continuation of the sector’s recovery, it remained well below pre-crisis peaks, both in real terms and as a share of the broader economy.
Tourist arrivals rose more strongly in 2025, increasing by 15.1 percent compared to the previous year. The number of foreign visitors climbed to 2,362,521 from 2,053,465, reflecting renewed interest in Sri Lanka as a travel destination amid easing global travel disruptions and improved domestic stability.
At its peak in 2018, tourism accounted for nearly 5 percent of Sri Lanka’s economy. Since then, the sector has endured a series of severe shocks, beginning with the Easter Sunday terrorist attacks in 2019, followed by the COVID-19 pandemic in 2020, and later an unprecedented economic crisis that disrupted travel demand, airline connectivity, and service capacity.
While arrivals have recovered faster than earnings, policymakers remain focused on strengthening value rather than volume. Tourism earnings are a key source of foreign exchange and play an important role in supporting imports and narrowing the merchandise trade deficit. As tourism income flows into the economy, spending by workers and businesses in the sector helps stimulate domestic demand and related industries.
The January figures indicate that while the recovery trajectory remains intact, it is increasingly shaped by structural adjustments rather than cyclical rebound alone. Improving visitor spend, length of stay, and diversification into higher-value tourism segments are likely to be central to restoring tourism’s contribution closer to historical levels.
As Sri Lanka moves deeper into 2026, the performance of Sri Lanka January tourism revenue may serve as an early signal of broader trends for the year ahead, particularly as authorities balance ambitious arrival targets with the need for sustainable and higher-yield growth.