Courtesy The Daily Mirror

Colombo, Jan 21 (Daily Mirror) – UNP MP Ravi Karunanayake raised serious concerns in Parliament over what he described as a growing disconnect between Sri Lanka’s record tourist arrivals and the weak flow of foreign exchange into the country’s official financial system.

Speaking in Parliament, Karunanayake noted that Sri Lanka recorded more than 2.36 million tourist arrivals in 2025, yet total tourism earnings rose only marginally to about USD 3.22 billion. He pointed out that average spending per tourist had declined by nearly 12 percent year-on-year, even as arrivals surged, raising questions about the quality and sustainability of tourism growth.

He also said that tourism-related foreign exchange inflows reflected in the reserves of the Central Bank of Sri Lanka (CBSL) had not increased in line with the rise in arrivals, suggesting possible revenue leakages, offshore settlements and weak regulatory enforcement in the sector.

The MP further drew attention to the fact that around 40,000 hotel and accommodation entities operating in Sri Lanka remain unregistered, allowing a large segment of tourism activity to take place outside formal regulatory and banking systems.

Karunanayake sought clarification from the Government on the structural reasons behind the decline in per-capita tourist earnings, including changes in source markets, length of stay and pricing practices. 

He also asked how much tourism-related foreign exchange was actually converted through licensed commercial banks and reflected in CBSL reserves in 2025, and how that figure compares with the total earnings reported by the Sri Lanka Tourism Development Authority.

Furthermore, he questioned whether the Government had assessed foreign exchange leakages arising from offshore settlement of payments by international online booking platforms and overseas credit card usage, where invoicing and settlement often take place outside Sri Lanka, thereby bypassing domestic taxation and the local banking system.

The MP further asked what proportion of tourism activity is estimated to be carried out by unregistered accommodation providers and informal operators, and whether the Government accepts that a significant share of tourism-generated foreign exchange is not strengthening official reserves.

Karunanayake also queried why enforcement of mandatory registration, banking-channel settlement and foreign exchange repatriation requirements has remained weak despite existing legal powers, and when the Government plans to present to Parliament a comprehensive tourism policy linked to earnings, foreign exchange inflows and reserve accumulation rather than just headline arrival numbers.

He warned that unless these structural and regulatory gaps are addressed, Sri Lanka risks losing a substantial portion of the economic benefits of its tourism boom, despite the impressive growth in visitor numbers.