Projections for Tourism Growth in Sri Lanka (2025-2030)

 Publication details: Deveconomics - Analytical Report 4/2025, 01st September 2025

Title: Projections for Tourism Growth in Sri Lanka (2025-2030)

Key highlights

 Economic Importance – Tourism is a critical sector for Sri Lanka, contributing significantly to foreign exchange earnings, job creation, and economic development.

 Pre-Crisis Growth – From 2014 to 2018, tourist arrivals grew at a 13.2% cumulative average growth rate, peaking at 2.3 million in 2018.

 Crisis Impact – Due to internal and external shocks, arrivals plummeted dramatically to 0.1 million in 2021.

 Recovery Phase – The sector began recovering in 2022, with 2 million arrivals in 2024, including a near doubling of arrivals between 2022 and 2023 and a 38% increase from 2023–2024.

 Future Outlook – Projections suggest 2.35 million arrivals and USD 3.8 billion earnings in 2025, with the potential to reach 4.1 million arrivals and USD 10.9 billion earnings by 2030 through clear policies and strategic actions.

1.  Introduction

The tourism industry is one of the main sources of foreign exchange earnings and plays a significant role in Sri Lanka’s economic development. It is also a key contributor to employment generation in the country. By the end of 2024, tourist arrivals surpassed 2 million. As of July 2025, the number of tourist arrivals reached approximately 1.4 million, accounting for 70% of the total arrivals recorded in 2024. According to the Annual Statistical Report 2023 by the Sri Lanka Tourism Development Authority, total employment in the tourism sector at the end of 2023 stood at 204,591. Furthermore, as per the Annual Statistical Report 2024, there were 4,346 registered establishments and 54,226 hotel rooms by the end of 2024.

2. Trend in tourist arrivals (2014-2024)

Over the past decade, from 2014 to 2024, three distinct patterns in tourist arrivals to Sri Lanka can be observed:

1.     A period of growth leading up to 2019,

2.     A sharp decline from 2019 to 2021, and

3.     A phase of recovery beginning in 2022.

Following Table 1 presents a comparison of key tourism sector indicators between the years 2018 and 2024.

2.1.  A period of growth leading up to 2019

From 2014 to 20118 period, tourism industry of Sri Lanka showed a 13.2 % cumulative average growth rate with 17.8% in 2015, 14.0% in 2016, 3.2% in 2017 and 10.3% in 2018. Following table 2 compares the key parameters of tourism industry between 2014 and 2018.

2.1.  Degenerating from 2019 to 2021

Sri Lanka's tourism industry experienced a continuous decline from 2019 to 2021, driven by a series of internal and external shocks. The downturn began with the Easter Sunday bombings in Colombo in April 2019, followed by ongoing political instability throughout 2019 and 2020, and was totally collapsed due to the COVID-19 pandemic in 2020 and 2021. As a result, tourist arrivals fell sharply from 2,333,796 in 2018 to just 194,495 in 2021. Correspondingly, foreign exchange earnings from tourism dropped from USD 4.4 billion to USD 0.5 billion. Notably, during this period, tourist arrivals declined at a compound annual rate of -31% between 2018 and 2021.

 

2.2.    A phase of recovery beginning in 2022

Despite facing political instability in 2022, the country’s tourism sector began to revive in line with the gradual global recovery of tourism in the post-pandemic period. Tourist arrivals rose sharply from 194,495 in 2021 to 2,053,465 in 2024, while foreign exchange earnings increased from USD 0.5 billion to USD 3.2 billion over the same period. Notably, between 2023 and 2024, tourist arrivals grew by 38%, underscoring the rapid recovery of the industry. Following chart 1 further elaborate the change of tourist arrivals from 2014 to 2024.

2.      Growth projections

3.1 Growth prediction for 2025

Between 2014 and 2018, Sri Lanka’s tourism industry recorded a cumulative average growth rate of 13.2%. The highest number of tourist arrivals during this period was in 2018, with a monthly average of 194,483 visitors. More recently, from 2023 to 2024, tourist arrivals grew by 38%, bringing the monthly average for 2024 to 171,122. By the end of July 2025, total arrivals had reached 1,368,288, raising the monthly average to 195,470. This figure surpasses the monthly average recorded in 2018, which marked the peak of the decade since 2015. Compared with 2024, the monthly average in 2025 reflects a growth of 14.23%.

Taking into account seasonal patterns, the expansion of the global tourism industry, and favorable market expectations, tourist arrivals in Sri Lanka are projected to grow by 14.5% in 2025, reaching approximately 2.35 million visitors. Assuming a 5% increase in average daily spending per tourist (to USD 190.2) and the continuation of the 2024 average stay of 8.42 nights, foreign exchange earnings from tourism are expected to rise to USD 3.8 billion in 2025.

 

3.2 Growth projections for 2030

As highlighted earlier, between 2014 and 2018, tourist arrivals recorded a cumulative average growth rate of 13.2%, while the average duration of stay reached 10.8 nights in 2018. If deliberate measures are taken to raise the average duration of stay back to the 2018 level, it would significantly enhance foreign exchange earnings. In addition, efforts may be required to increase average spending per tourist per day by expanding and diversifying tourism activities within the country. Assuming an annual 5% increase in daily spending per tourist, key assumptions for the period 2026 to 2030 are presented in the following table.

2.  Conclusion

The tourism sector plays a vital role in Sri Lanka’s economy, particularly in terms of foreign exchange earnings, employment generation, and overall economic development. Between 2014 and 2018, tourist arrivals recorded a cumulative average growth rate of 13.2%. However, due to a series of internal and external shocks, arrivals fell sharply from 2.3 million in 2018 to just 0.1 million in 2021. The sector began to recover in 2022, with annual arrivals rebounding to 2 million by 2024. Notably, arrivals nearly doubled between 2022 and 2023, followed by a further 38% increase from 2023 to 2024.

According to this study, tourist arrivals are likely to reach 2.35 million in 2025, generating an estimated USD 3.8 billion in foreign exchange earnings. Looking ahead, with well-defined policies, strategic actions, and clear targets, Sri Lanka has the potential to attract 4.1 million visitors and generate USD 10.9 billion in foreign exchange earnings by 2030.

                                                                                                                                          (End)