Hotels and resorts across Sri Lanka are facing a sharp drop in domestic bookings during the Avurudu season, as fuel shortages, price hikes, and the economic fallout from the Middle East conflict continue to squeeze household budgets.
Chandima Lokuhetti, general manager of Bandarawela Orient Hotel, told the Sunday Times that inquiries from local clients had not converted into bookings despite promotional efforts and credit card discounts. Hotels in Anuradhapura, Dambulla, and Kandy reported similar patterns, with some placing staff on unpaid leave to cope with reduced occupancy.
“We are unable to survive because the operations are no longer profitable,” one Dambulla hotel employee said.
The slump in domestic travel compounds an already difficult period for the industry. International tourist arrivals fell 19.7 percent in March to 183,979 — down from 229,298 a year earlier — driven by airspace closures in West Asia and a 70 percent increase in airline ticket prices linked to the jet fuel shortage.
UK arrivals dropped to 18,092 from 22,447, German visitors fell to 13,429 from 17,918, and Russian tourists declined sharply to 15,685 from 29,177.
SLTDA Chairperson Buddhika Hewawasm confirmed that daily foreign arrivals had dropped by approximately 2,500 since the regional conflict intensified. The authority is launching promotional campaigns targeting Bangladesh, India, China, South Korea, and several other Asian-Pacific markets to offset losses.
The Grand Hotel Nuwara Eliya reported a comparatively better scenario, with resident manager Nazeem Mohammed noting that repeat clientele helped maintain occupancy. But across the wider hospitality sector, the picture remains bleak as the cost of Avurudu celebrations continues to climb.
