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Most countries in the world have gained economic advantages through tourism. They have implemented plans systematically for both domestic and international tourism sectors. In the recent world developed and developing countries have been taking more economic contribution from domestic tourism rather than from international tourism. Tourism industry in Sri Lanka is giving special attention to international tourism, but less attention to domestic tourism. The main objective of the study is to identify the recent salient features of the domestic tourism sector, analyzing the income expenditure patterns and the examining the possibility of introducing the tour package to the study area. The sample covers primary data from 200 domestic tourists and 100 related enterprises. The data analysis using simple regression analysis and it shows domestic tourists expenditure pattern has been change with formalizing the sector. In addition regional development, employment creation and income generation in the area was tremendously increased. Key words: Tourism; income; expenditure; regional development DOI: 10.4038/suslj.v8i1.1849 Sabaramuwa University Journal Vol. 8(1); December 2008, pp 33-48

Formalizing Domestic Tourism Sector in Sri Lanka: A Case Study on Southeast Dry Zone