“Free visa policy will help SL achieve 2.2 Mn arrivals, US$ 3.8 Bn earnings in 2024”

The ‘free visa on arrival’ for guests from seven countries will firstly help increase arrivals and secondly contribute to higher tourism revenue, says CT CLSA SECURITIES, Tourism Industry update yesterday.

Tourist arrivals – Contribution from free visa granted countries to date

This week the government has granted immediate visa-free entry to travelers from seven significant tourist-generating markets: India, China, Russia, Malaysia, Japan, Indonesia, and Thailand as a pilot visa-free entry project until March 31, 2024.

These seven mentioned countries accounted for around 40% of total tourist arrivals in the first nine months of 2023. Their contribution in 2018 (the last normal year for Sri Lanka tourism) was 36%.

“Initially, we expected these markets would play a crucial role in helping Sri Lanka achieve the expected arrival targets. However, with this recent development, we now anticipate a much faster recovery in tourist arrivals from contributions from several countries in the short term.”

Tourism has historically played a vital role in Sri Lanka’s foreign exchange earnings and is an essential driver of the economy and following a very challenging four-year period, the tourism industry is now on a path to recovery.

In terms of the current progress of the industry, Sri Lanka tourist arrivals for the first 22 days of October 2023 were recorded at 77,763 bringing the 2023 YTD tourist arrivals to 1,094,019. In September 2023, tourism generated earnings of US$152mn, resulting in a total of US$1,457mn in tourism earnings for the first nine months of 2023.

“Earlier we revised down our tourist arrivals target by -11% to 1.4 million arrivals with US$1.9 billion for 2023 end due to lower daily tourist arrivals. The average arrivals per day had decreased by -5% to 3,535 in the first 22 days of October 2023 (vs. 3,731 average daily arrivals in September 2023).

“However, there has been a significant increase in daily tourist arrivals on October 20, 21, and 22, 2023 totaling 13,446 arrivals, with a daily average of 4,482 arrivals (vs. 3,385 arrivals in the first 19 days of October 2023).

“Therefore, coupled with the free Visa policy we expect higher daily arrivals during the last 2 months of 2023 due to the winter season. Our unrevised target for 2024 is 2.2 million tourist arrivals with US$3.8 billion earnings.”

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