The cost of political upheaval to international tourism in Sri Lanka

Abstract

Although various studies have highlighted the consequences for tourist arrivals of political unrest and security concerns relating to some tourist destinations, they tend not to quantify the actual losses incurred by these destinations. Therefore, the main aim of this paper is to assess the cost of the recent political upheaval in Sri Lanka to its international inbound tourism, in terms of arrivals, foreign exchange earnings, household income, gross tourism expenditure, and employment. The paper also investigates the possible gains by neighbouring countries, such as Maldives and India, associated with the losses in arrivals to Sri Lanka. The results of this study indicate that Sri Lanka may have lost almost ten per cent (average annual) of international tourist arrivals between 1983 and 1989. A similar increase was observed in Maldives (twelve per cent, average annual), and India gained a 4.5 per cent average annual increase. Sri Lanka lost approximately 224,000 tourists from 1983 to 1989 while Maldives and India gained 85,000 and 554,000 tourists, respectively. The study, also found that Sri Lanka's tourism sector lost US$1,090.3 million (Rs.42,981 million) worth of potential foreign exchange as direct expenditure during 1983–1995. The flow‐on effect of the direct expenditure was Rs.72,037 million. The loss of direct and indirect household income (salaries and wages) was estimated at Rs.14,143 million and Rs.28,103 million, respectively, during the same period. The average annual loss of direct and indirect employment in the tourism sectors was 15,300 and 22,950 jobs, respectively.