COLOMBO (AFP) - The cancellations started before the dust had settled on the hotels and churches hit by suicide bombers in Sri Lanka as tourists and operators pressed the panic button.

Mr Sanath Ukwatte, chairman of the colonial-era Mount Lavinia hotel in Colombo, said he lost about 30 per cent of his bookings within days of the April 21 Easter Sunday attacks that killed 253 people.

Many holidaymakers got the first plane out of Colombo after the blasts - at least 40 foreigners were among the dead - raising fears for a tourism industry that had managed to move on from the shadows of a decades-long civil war.

The United States, Britain, Australia, India and Israel have all warned their nationals against visiting, while the Netherlands is organising a special flight to evacuate hundreds of Dutch tourists.

Last Friday (April 26), European travel giant TUI announced that it had stopped taking bookings for the South Asian country.

And the crisis could get worse before it gets better for the island nation, whose palm-fringed beaches and mountain tea plantations were recently named the best place to visit in 2019 by the Lonely Planet guide.

Sri Lanka's Finance Minister Mangala Samaraweera had hoped tourism would earn a record US$5 billion (S$6.8 billion) this year, up from US$4.4 billion in 2018. He thinks the attacks could now see the country lose up to one third of that.

Tourism accounts for about 5 per cent of the economy, with Britain, India and China the main markets. Official figures show tourist arrivals in the first quarter of this year jumped 4.6 per cent to 740,600 from 2018.

But with armed guards now a fixture in some Colombo hotels and cancellations flooding in after the carnage unleashed by coordinated suicide attacks, Minister Samaraweera must work out a rescue plan for establishments now facing ruin.

"We expect a 30 per cent drop in arrivals and that means a loss of about US$1.5 billion in foreign exchange," he said last Friday.

Mr Ruchir Desai, a senior investment analyst with Asia Frontier Capital in Hong Kong, said the next year will be a tough one for Sri Lanka.

"Given the scale of the attack I still think you would see a negative impact on the industry," Mr Desai told AFP. "It should recover, obviously it depends on the steps the government takes to improve stability."

Mr Ukwatte, who is also president of the Hotels Association of Sri Lanka, hopes Sri Lanka can bounce back.

Sri Lanka's tourism is heading into its low season, and Mr Ukwatte believes if confidence can be restored by October or November, "then we will be able to revive the industry with European winter travellers".

Minister Samaraweera highlighted how other countries hit by attacks inspired by the Islamic State in Iraq and Syria (ISIS) terror group rebuilt their image and convinced tourists to come back.

"Typically, countries that suffer isolated ISIS-style attacks see tourism recovering within one to two years, as long as root causes are addressed and security measures taken are well communicated," the minister said.

He pointed to tourist industries in Belgium, France, Spain and Tunisia as countries which had all managed to bounce back after suffering indiscriminate terror attacks.

Much will depend on how the government gets its message across, observers said.

Canadian adventure tourism promoter Wade Campbell criticised the government's communications after the attacks, particularly a top defence ministry official - who has since resigned - who said Sri Lankan hotels should have arranged their own security to avoid being hit.

Danger is "a perception thing", said Mr Campbell, who is now looking at redirecting bookings to rival destinations such as Nepal.

Italians Donatella Papi and her husband Maurizio Fantappie were on a 25-day holiday in eastern Sri Lanka when the bombers struck.

"My husband wanted to leave after the bombings, he suggested going to Thailand. But I wasn't too scared then, I thought it would settle down," said Ms Papi.

"I think Sri Lanka tourism will fall - we are very sad about it. This year is the anniversary of the end of the war - it was supposed to be a celebration," she said.

"We have no regrets about staying on but we are very sad and worried - for our safety and for Sri Lanka."