The number of visitors from Britain and Germany -- both key markets -- fell five percent each in June to 5,304 and 1,317 respectively over the same period a year earlier.
The number of leisure travellers from neighbouring India declined 28.8 percent in June to 5,664, as against the same period last year.
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"It's the conflict that is keeping tourists away.
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There are frequent bomb attacks and it is natural they would be cautious to travel here," an official from the tourism authority said.
Many countries in the west have cautioned their nationals against travelling to Sri Lanka, where fighting between government troops and Tamil Tiger rebels has escalated since the start of the year.
The rebels, who are fighting for a separate homeland for minority Tamils, have been blamed for a st