Sri Lanka “A land like no other” known as an attractive destination for travel and tourism industry has become a major contributor to the national economy. The tourism industry has emerged as the 4th highest foreign exchange earner in Sri Lanka. The industry has driven forward from packaged beach holiday attracting a low-cost, low-value market segment ,to the niche market focusing on value addition and offering specialized products such as Ecotourism, MICE (Meetings, Incentive Travel, Conventions and Exhibitions), Adventure tourism and Ayurveda/Spa tourism. Substantial investment has also been made in recent years on boutique resort hotels catering to more up-market clientele.

In spite of the tsunami devastation and the negative travel advisories by some western countries, gross earnings from tourism increased at a high rate of 24.7% to US$ 410.3 million in 2006, compared with the US$ 329 million in 2005. Tourist arrivals increased by 1.9 % to 559, 603 in 2006 over the 549,308 arrivals in 2005.

The industry provides direct & indirect employment opportunities to more than 120,000 persons. Through its linkages with other sectors of the economy, the tourism industry provides additional momentum for the development of catering services, arts & crafts, archeological & cultural sites, travel & recreation.