Sri Lanka is currently reporting record highs in tourist arrivals, with 896,884 arrivals recorded between the beginning of the year until April, only exceeding the numbers recorded in the same time period in 2018 – Sri Lanka’s so-called best year in tourist arrivals – by a marginal 9.6%.
Following the record-breaking peaks documented in 2018, tourism arrivals to Sri Lanka took a nosedive, falling by 18% due to the Easter Sunday attacks that took place in April 2019, targeting specific tourism establishments in Colombo.
In the following year – 2020 – Sri Lanka, along with the rest of world, entered into a period of confinement due to the global pandemic, driving tourism arrivals further down by 73.5%, making it one of the biggest recorded dips in tourist arrivals the island nation had experienced.
The next year, in 2021, arrivals forebodingly fell further by another 61.7%. However, although the nation was driven to the worst economic crisis recorded in its independent history in 2022, Sri Lanka saw a 270.2% increase in arrivals driven by global post-pandemic recovery and travel rebounding.
Since then, the Sri Lanka Tourism Development Authority (SLTDA) has kept setting ambitious targets for arrivals, attributing its hope for sector stability and recovery to tourist arrival numbers. Sri Lanka however did not meet its 2023 tourism target of 2.3 million arrivals, instead recording 1,487,30 arrivals, although it was a 106% increase in arrivals from the previous year.
In 2024, Sri Lanka once again missed its targets for the year by roughly 250,000 arrivals, recording 2.05 million arrivals – missing its 2.3 million target.
Accommodation growth
Sri Lanka’s accommodation capacity has since experienced growth, according to data published by the SLTDA, indicating a significant structural shift. The data shows that while classified hotels showed expected growth levels of 12.7%, along with a 20.8% increase in hotel room capacity, guesthouses and homestays showed a 66.7% and 115.8% increase, respectively.
The lopsided increase of guest houses at 72.7% in comparison to the 28% increase in boutique hotels suggests that there is increasingly an economies of scale in favour of budget operators. With homestays outpacing the growth of establishments, seeing a 111.1% increase, the sector as a whole recorded a total of 55,455 rooms in 2024 – a 39.5% growth from its last recorded numbers in 2019.
Further, it is notable that the sector’s 78.7% growth in the total number of establishments was primarily driven by informal entrants, based on the data published by the SLTDA.
Growth not reflected in occupancy
To gauge the impact of the increase in arrivals on the local tourism sector, rivalling those of Sri Lanka’s best in 2018, The Sunday Morning Business reached out to The Hotels Association of Sri Lanka (THASL) President M. Shanthikumar.
Speaking on room occupancy, he said that the SLTDA numbers were yet to be reflected in the sector.
“We agree with the numbers released by the SLTDA with regard to an increase in the number of tourists, but unfortunately, this growth is not reflected in the occupancy of rooms, as there are many unregistered hotels and apartments that offer accommodation but are not registered with the SLTDA,” Shanthikumar said, suggesting that the impact of increased arrivals was likely to be obscured or even lost on Sri Lanka’s local tourism industry.
Sri Lanka Association of Inbound Tour Operators (SLAITO) President Nalin Jayasundera echoed the sentiment with regard to measuring the impact of increased arrivals on hotel occupancy, noting: “People are increasingly staying in bread and breakfast (B&B) spaces that aren’t likely to be registered with the SLTDA.”
“In the south, in areas such as Mirissa and Bentota, it is likely that this lack of registration is higher,” he said, further reinforcing statistical data on the rise of informal, smaller-scale entrants into the hospitality sector.
Adding to his statement on the impact of arrivals on the industry, Shanthikumar argued: “Chasing numbers won’t guarantee increased spending.” He suggested that the authorities look into ways to guarantee that tourists are incentivised to spend longer periods of time travelling through the country and that higher-spending tourists are targeted.
Expanding on the sentiment of tour operators, Jayasundera added that there was an increase in the number of persons visiting major tourist hubs across Sri Lanka.
“Certain areas have seen an increase in the number of tourists. When it comes to a place like Colombo, the inventory has increased, meaning that the number of rooms has increased over the years and the rise in the number of tourists cannot be reflected adequately in the room occupancy numbers,” he noted.
Since 2019, Sri Lanka has seen a 58.7% increase in the number of rooms, which grew from a total of 7,000 rooms to 11,110.
“Consider the opening of new hotels across Colombo, such as those of Cinnamon, Sheraton, Sofia, and Amari. In the previous year, there might have been roughly 5,000 rooms occupied of the 10,000 in Colombo, with 50% occupancy. With the opening of these new hotels, if the room count climbs to 180,000 rooms and occupancy is 160,000, it is likely that there is no increase that can be reflected,” Jayasundera said.
Other issues
The SLAITO President further explained that rather than room accommodation issues, Sri Lanka currently faced a risk of over-tourism in tourist hotbeds such as Yala and Sigiriya.
“Among the areas that usually show signs of over-tourism, or rather an issue in relation to managing the inflow of tourists, are Yala and Sigiriya. There is a real lack of quality transport and regulated, licensed tour guide service providers,” he observed.
Jayasundera said that tour guides were yet to report any signs of accommodation issues, noting: “They have not informed us of any issues with regard to accommodation capacity. We organise transport, accommodation, guides, and tour packages. We promote the destinations and we do the work of facilitating tourism, so we would know if there is such an issue.”
Seasonally, however, Sri Lanka does experience a surge in numbers down south – a hub for surfers and beachgoers, particularly for tourists from Western nations looking for reprieve from the winters of the northern hemisphere.
“There are issues with regard to occupancy during the period extending from the Christmas season into Easter – from December to April – whereas occupancy in the Eastern Province in the same time period is likely to be low,” Jayasundera said.
“Russians and tourists from the Eastern European bloc usually occupy the south in high numbers during these months, and there are times when it becomes difficult to provide accommodation for them, in addition to a lack of tour guides fluent in Russian, French, and other Eastern European bloc languages.”
Although The Sunday Morning Business reached out to SLTDA Chairman Buddhika Hewawasam to understand the authority’s safeguards to mitigate possible risks of lowered accommodation capacity in tourist hubs, he was unreachable.
In order to gauge the Ministry of Tourism’s plans for facilitating accommodation for Sri Lanka’s target of three million tourists, The Sunday Morning Business attempted to contact Foreign Ministry Deputy Director R.A. Deshani, who was also unreachable.