Hotels, homestays and restaurants in Hikkaduwa are reporting a near-80% collapse in tourist arrivals, with the Hikkaduwa Tourist Hotel Owners Association blaming the prolonged US-Iran conflict, elevated airfares and broader global uncertainty, The Island reported.
Dickson Dewasiri, a member of the association and operator of Devasiri Seafood and two hotels in the area, told the paper that more than 70% of tourists who normally visit Sri Lanka pass through Hikkaduwa. “However, today we hardly see any tourists, and this is a very sad situation,” he said.
More than 15,000 hotels, homestays, restaurants and tourist-related service providers operate in and around Hikkaduwa, Dewasiri said. With business dropping sharply across most properties, many have shut down operations, scaled back staff or introduced unpaid service breaks. He estimated that more than 100,000 direct and indirect tourism-related jobs in the area are now at stake.
The association said skilled hospitality staff are leaving the sector for other industries to survive, and warned of a longer-term shortage of experienced personnel even after demand returns. Rising operating costs, higher electricity tariffs and tax burdens are compounding the pressure on bank-financed properties.
Hikkaduwa’s ground-level distress sits underneath the macro picture: Sri Lanka’s May arrivals so far stand at 46,606, well below the 132,919 recorded in May 2025, after April closed at 117,893. Tourism revenue in March plunged 37% on the same combination of conflict-driven airfare spikes and rerouted carriers.
Dewasiri called for targeted relief on bank loan repayments rather than a blanket moratorium, and urged the government to promote tourism in regions not perceived as affected by Middle East tensions.
Source: The Island.
