The Sri Lankan Minister of Foreign Affairs and Tourism, Vijitha Herath, has called upon the country’s expatriate community to invest in the tourism sector, emphasizing the newfound economic and political stability within the nation. This invitation was extended during the groundbreaking ceremony of the AUREUM luxury hotel complex, a project backed by Luxembourg investment that had faced delays due to the COVID-19 pandemic.

In a statement at the event, Minister Herath highlighted the revival of businesses impacted by the pandemic, attributing this resurgence to the current stability in Sri Lanka. “Last year, we led the tourism industry to a major milestone, resulting in increased European investments in Sri Lanka,” he noted. “The reopening of this tourism industry project after years of closure marks a positive development for the country. Therefore, I earnestly invite all Sri Lankans living abroad to attract new investors to the nation.”

Tourism has historically been a critical component of Sri Lanka’s economy, serving as the third-largest source of foreign exchange prior to recent crises. However, the industry endured significant setbacks due to the COVID-19 pandemic, which nearly halted international arrivals in 2020 and 2021. The subsequent economic crisis in 2022, characterized by a sovereign default, exacerbated challenges with fuel shortages, power outages, inflation soaring to nearly 70 percent, and widespread protests, all of which discouraged visitors and prompted travel advisories.

Tourist arrivals nosedived from a pre-pandemic high of 2.33 million in 2018, generating $4.4 billion, to just over 700,000 in 2022, resulting in a reduced revenue of $1.1 billion. This decline was further compounded by earlier incidents such as the 2019 Easter Sunday attacks. Recovery began to gain momentum in 2023, aided by relaxed import restrictions for the sector, visa-free policies targeting key markets like India, Russia, and China, aggressive global promotion efforts, and IMF-supported stabilization measures that helped curb inflation and rebuild reserves.

By 2025, tourist arrivals soared to a record high of 2.36 million, with earnings exceeding $3.2 billion, despite disruptions caused by Cyclone Ditwah. While investment in the country’s leisure industry has seen a modest rebound, it remains cautious. Foreign direct investment in hotels and infrastructure was limited in 2022 due to construction challenges and investor withdrawals.

Under the leadership of President Anura Kumara Dissanayake since late 2024, the Sri Lankan government has prioritized tourism as a means of increasing foreign exchange inflows and creating jobs. The administration aims to attract 3 million arrivals in 2026 through infrastructure improvements, sustainable development initiatives, and incentives, thereby positioning the tourism sector as a cornerstone of post-crisis economic resilience, despite ongoing challenges such as infrastructure gaps and global competition.