Tourism Spending in Sri Lanka: Are We Getting it Right?
Prior to the COVID-19 pandemic, tourism was identified as the third largest and fastest growing source of foreign currency, after private remittances and textile and garment exports, accounting for almost USD $4.4 billion or 4.5% of GDP.
2018 marked a turning point for Sri Lanka’s tourism industry. What followed, however, was a series of setbacks from the Easter attacks in 2019, to the COVID-19 pandemic, and then the economic crisis that left the sector struggling for survival. By 2023, signs of recovery began to appear, offering hope after years of uncertainty.
Flawed Tourism Earning Calculations
Tourism earnings, meanwhile, remain clouded by flawed calculations. Current figures are still anchored to a 2018 Sri Lanka Tourism Development Authority (SLTDA) survey of around 5,000 departing tourists. Using reported averages for daily spend and length of stay, these estimates are then scaled up against total arrivals recorded at the airport. While sampling adjustments may account for country of origin, the approach overlooks crucial distinctions between traveller types and spending profiles. The result is an incomplete picture that risks overstating actual revenues.
The oft-quoted USD $170-180 per person, per day estimate came from this quick airport survey. It’s not hard data, it’s a guesstimate. Tourists misremember details, informal spending is invisible, and we risk double-counting. Therefore, our calculated tourism revenues today can be misleading as they are inaccurate and inflated. Yet, multiple organisations in strategy, marketing, and investment rely on these numbers.
Other countries don’t settle for guesswork. Singapore for example uses STR-style hotel data and a Tourism Satellite Account (TSA) that integrates accommodation, flights, retail, attractions, and payments.
In Singapore, hotels and investors don’t wait for once-a-year surveys. They benchmark operational reality through STR-style feeds (occupancy, ADR, RevPAR, segmentation), while the Tourism Satellite Account (TSA) converts visitor activity into national accounts with rigorous classifications. The Singapore Tourism Board then triangulates hotel data with payments, retail categories, attractions, events, and airlift to publish timely, segmented insights.
These frameworks do not rely on questionnaire data. They stitch multiple data streams together under an assessment framework.
Building a Real Tourism Accounting Framework for Sri Lanka
Sri Lanka needs something similar. We should move toward a modern accounting framework that:
- Collects monthly data from hotels, flights, banks, attractions, and telcos.
- Consolidates it into TSA-compliant national accounts.
- Produces credible, auditable insights investors and policymakers can trust.
This is not complicated if we bring in independent expertise. Firms like KPMG or Ernst & Young can help design the framework, connect the data streams, and certify the results. With the right setup, we could publish trusted tourism revenues in six months, not just inflated averages from airport questionnaires.
We can’t manage what we can’t measure. The airport questionnaire’s were a starting point. It must not be our strategy. Let’s build a defensible, STR-informed accounting framework that tells us what our tourism economy is truly worth, because Sri Lanka’s tourism industry deserves more than a guess.
