Sri Lanka’s tourism revenue plunged 37 percent year-on-year in March 2026 to US$223.7 million, the Central Bank said Saturday, citing Sri Lanka Tourism Development Authority data in the first official earnings release since the US-Israeli bombing campaign against Iran began on February 28.
The revenue drop is significantly steeper than the 19.7 percent decline in visitor arrivals recorded for the same month, indicating that not only are fewer tourists arriving but average spending per visitor is also falling as high-value Western travellers routed through Gulf hubs stay away.
First-quarter revenue fell 15 percent to US$954 million compared to Q1 2025, marking a sharp reversal from last year’s growth trajectory. Sri Lanka earned US$3.22 billion from tourism in 2025, a modest 1.6 percent increase over the prior year, supported by a record 2.36 million arrivals.
The government’s ambitious target of 3 million arrivals and US$4 billion in revenue for 2026 now looks increasingly out of reach. The Middle East conflict has disrupted flight connections through Gulf hubs that serve as the primary transit route for European visitors, while rising airfares and security concerns have further deterred travel.
The monthly revenue has now fallen in seven of the last nine months. The SLTDA revised down its per-day tourist spending estimate to US$148 from US$171 last August after a fresh survey.
Tourism, which accounted for nearly 5 percent of GDP at its 2018 peak, has been battered by successive crises — the 2019 Easter Sunday attacks, the COVID-19 pandemic, the 2022 economic crisis, and now the Middle East escalation — preventing the sector from returning to full strength.
