Hoteliers warn of revenue impact from drop in European arrivals

• Tourist arrivals adversely affected; cascading effect on travel
• Arrivals decline by 19.7% YoY in March
• High impact due to higher spending power of European tourists

The revenue impact from the recent decline in European tourist arrivals is likely to be far more severe than what headline arrival figures suggest, hoteliers warn.

Speaking to The Sunday Morning Business, Sri Lanka Association of Inbound Tour Operators (SLAITO) President Nalin Jayasundera stated that disruptions caused by the ongoing Middle East crisis had adversely affected tourist arrivals to Sri Lanka. 

Pointing to official statistics, he stated that tourist arrivals had declined by 19.7% Year-on-Year (YoY) in March this year compared to March 2025, with the downturn expected to continue into April.

“The current financial quarter will be impacted. If the prevailing ceasefire continues, we might see a faster recovery,” he said.

Jayasundera explained that the most affected source markets included Europe, the Middle East, and the Commonwealth of Independent States (CIS) region. He noted that the disruption caused by the Middle East crisis had had a cascading effect on travel, as many airlines relied on Middle Eastern hubs for transit to Sri Lanka.

While the March figures indicate a 19.7% YoY decline in arrivals, he cautioned that the actual revenue impact would be significantly higher. This is because European tourists typically have higher spending power and longer stays, meaning the decline will disproportionately affect tourism earnings and total room nights.

Jayasundera added that the economic fallout from the crisis would be felt across the entire tourism sector, from large-scale operators to small and medium-sized establishments.

According to data from the Sri Lanka Tourism Development Authority (SLTDA), tourist arrivals in March fell to 183,979, reflecting a 19.7% YoY decline compared to March 2025 and a 21.2% decrease compared to March 2018.

This downturn follows a strong start to the year. January recorded 277,327 arrivals, marking a 9.7% increase compared to January 2025 and a 16% rise from 2018 levels. Similarly, February saw 279,328 arrivals, representing a 16.2% increase YoY and an increase of 18.5% compared to 2018.

Source: The morning