Counting What Actually Stays: Tourism’s Leakage Problem Finally Gets Measured

The Sri Lanka Tourism Development Authority’s decision to conduct a leakage surveymay be one of the most quietly significant policy moves in recent years — precisely because it asks a question Sri Lanka has avoided for decades: how much tourism money actually stays in the country?

Tourism has long been presented as Sri Lanka’s economic saviour. Visitor arrivals dominate headlines. Earnings are quoted in gross figures. But gross numbers hide uncomfortable truths. Leakage — through imports, foreign ownership, repatriated profits, and offshore booking platforms — has turned tourism into a mirage economy in many developing countries. Sri Lanka is no exception.

The fact that a formal leakage survey is only now being undertaken speaks volumes. For years, policy relied on assumptions rather than measurement. Growth was celebrated without asking who benefited. Jobs were counted without examining quality. Revenue was announced without tracing retention.

This survey changes the conversation — if its findings are taken seriously.

Leakage is not inherently evil. All economies import. All industries repatriate some profits. The problem arises when leakage becomes structural — when domestic value capture is so thin that headline growth masks hollow foundations.

Early indicators suggest that Sri Lanka’s tourism leakage may be substantial, particularly in high-end segments reliant on imported inputs and foreign marketing channels. If confirmed, this will challenge the narrative that tourism alone can stabilise the economy.

The policy implications are significant. Reducing leakage is not about restricting foreign participation. It is about strengthening domestic supply chains, encouraging local sourcing, supporting SME integration, and aligning incentives with retention rather than volume.

It also forces a reckoning with the type of tourism being pursued. Mass arrivals chasing low margins behave very differently from smaller volumes anchored in high domestic value addition.

The danger, as always, lies in what happens next. Will the findings be published in full? Will they inform policy? Or will they be quietly archived once they complicate the recovery story?

Data is only disruptive if it is used.

For once, Sri Lanka is asking the right question. Whether it is prepared for the answer remains to be seen.