Sri Lanka’s tourism poised for remarkable growth as visa free travel enhances industry potential

February, 20, 2024

Tourism in Sri Lanka is on a high growth trajectory following a boost in Sri Lanka’s potential as a must-visit destination. Visa free travel for tourists from China, India, Indonesia, Russia, Thailand, Malaysia and Japan has provided the right nudge for tourists to put Sri Lanka on the top of their travel bucket list.

Nationals from these countries planning to visit Sri Lanka need to apply for Electronic Travel Authorization (ETA) before arriving, subject to granting of visa free of charge. The scheme is valid until March 2024 while the visa is valid for 30 days, permitting double entry from the date of initial arrival to Sri Lanka.[1] However, industry sources believe that the boost in tourist arrivals may encourage the visa free travel scheme to be extended further.

Having welcomed  208,253 visitors in January this year alone,  the highest in 4 years, the figures confirm a YoY increase of 103.1%. Tourists from India, Russia, the UK, Germany and China  top the list with 28,493 arrivals in the first four days of February 2024, confirming a figure of 7,000 travellers a day. The tourist arrivals are led by Russia with a 15% market share while India holds second position with 4,123 travellers. UK was seen as the third best market, with 2,592 (9%) arrivals with Germany (1,977) and China (1950) following.[2]

A record number of tourists are visiting Sri Lanka – it was over 200,000 tourists during In January 2024 and during the first 12 days of February, the figure was almost 92,000[3].   Likely to receive 2 million visitors in 2024, the tourism sector could generate a revenue of USD 6 billion within the year.[4] As visiting Sri Lanka becomes a veritable option for tourists, offering visa free travel will boost arrivals and consequently, the digital economy. Today’s travelers are well versed with digital payment options and would expect to be able to pay without cash anywhere, with the ease of use, safety and access of digital payments like they do around the world.

Tourism is a key sector of economic activity for Sri Lanka, contributing significantly to our country’s income. It also requires the wider merchant ecosystem – from mom-&-pop stores to micro-businesses to large merchants – to broad base the acceptance of digital payments, whether online or offline. Tourists visiting Sri Lanka can then rely on a convenient, smooth and safe payment experience during their stay here.

The recent Global Travel Intentions Study by Visa, confirm that today’s travelers look for experiential travel and not merely visiting tourist hotspots – which makes ubiquitous, seamless and secure payment access critical. Developing Sri Lanka’s payment infrastructure and ensuring a variety of options to travelers wherever they go – from cards, contactless payments and QR code payments to online and ecommerce payments would enhance tourism.

It is critical to assure travelers of convenience and access even when they travel off the beaten path. Imagine, if backpackers and explorers can have the same seamless digital payment experience at a small grocery shop in a remote town of Sri Lanka, they would leave with not just vivid memories but a great positive experience.

There is still some way to go for Sri Lanka to be adept and advanced in digital payments. The insights from an IFC study on digital payments in the Sri Lankan retail sector showed that although usage of smartphones was high in our country, digital literacy was still low in areas outside the Western Province. [5]

The government has set its sights on the opportunity for Sri Lanka to attract 5 million tourists by 2029, believed to bring in USD 21.6 billion by 2030. This will depend on tourism spends to increase to USD 4,000 per visitor and high-spending tourists visiting or revisiting Sri Lanka.[6]

Given the safety and seamless experience of using cashless payments, visitors also get the flexibility of paying in local currency and availing great offers on hotels, travel, retail, experiences etc. when they pay using cards. The ability to have great experiences, enjoy nature and the spirit of our island nation, combined with the convenience of paying digitally will go a long way in making for well-rounded enriching holiday experiences for tourists coming to Sri Lanka.