Luxury hotels in Sri Lanka registered strong growth in FY2026 driven by leisure and meetings, incentives, conference and events (MICE) segments.While the West Asia conflict has resulted in a drop in arrivals in March and April, operators remain optimistic of a positive trajectory in the coming months. ITC Hotels said its first international hotel — ITC Ratnadipa in Colombo — turned EBITDA (earnings before interest tax depreciation and amortisation) positive in its first full year of operation. . The hotel also sustained market leadership in RevPar (revenue per available room), the company said in its fourth quarter result announcement.Indian Hotels Company Ltd, which has three properties in Sri Lanka, saw 21 per cent year-on-year growth in business in fourth quarter FY26. “Sri Lanka market is showing positive growth for us,” an IHCL executive said.Sri Lanka received 2.36 million overseas visitors in CY 2025, a growth of 15 per cent over the previous year. With over five lakh visitors, India was the largest source market accounting for over 22 per cent tourist arrivals in 2025. West Asia conflictFootfalls from Europe declined last month due to the West Asia conflict. Food and energy prices too have been impacted due to supply chain disruptions. However, Indian arrivals in Sri Lanka are growing and this is giving hope to the local tourism industry.Krishan Balendra, Chairman of John Keells Holdings Plc that owns Cinamon Hotels, said there is significant room to grow Indian arrivals to Sri Lanka.In 2024, John Keells Holdings unveiled its most ambitious leisure project in Colombo — the City of Dreams that includes a 687 key Cinamon Life hotel, banquet facilities, mall and a casino. Balendra said City of Dreams has seen a pick up in business. “ There is a good interest for conferences and corporate events particularly from India. Prior to the West Asia conflict we used to see very good momentum and we are confident that momentum will continue to improve,” he added.Published on May 17, 2026