Sujeeva, J.2025-11-132025-11-132020https://ir.lib.pdn.ac.lk/handle/20.500.14444/6594Introduction : Micro and Small-scale enterprises (MSEs) play a significant role in promoting growth and development of tourism in Sri Lanka. As per the Department of Census and Statistics (DCS) Economic Census 2013/14, the MSEs11 account for over 95 percent of the total enterprises in accommodation and food services sub-sector. Its contribution to employment and value added in the same sector is around 70 and 50 percent respectively. Moreover, tourism sector is the 3rd highest foreign exchange earner and accounts for about 4-5 percent of GDP. Undoubtedly, the MSEs operating in tourism value chain is a major in terms of value added, foreign exchange earnings and job creation. There is a good body of knowledge on the impact of COVID-19 on Sri Lanka at national and sub-sector level based on secondary data.12 However, there is hardly any work at sub-sector level based on firm level data on MSEs and this study is an attempt to fill this literature gap in tourism sector MSEs. Arugam Bay (AB) is well-known as one of world’s best ten surf points in 2010 (Lonely Planet, 2009) located in the east coast of the Sri Lanka and is made up of several right-hand points for surfing that only work from May to November. It attracts guests from various parts of the world and provides livelihood for fishing communities characterized by high unemployment, underemployment, poverty and inequity. The impact of COVID-19 on 10 The advice and guidance provided by Prof. Sunil Chandrasiri throughout the study is gratefully acknowledged. Helpful comments and suggestions by two anonymous referees are also thankfully acknowledged. 11 Micro enterprises with less than 10 employees and Small-scale enterprises with 10-50 employees. Source: The Ministry of Industry and Commerce (MIC), National Policy Framework for Small Medium Enterprise (SME) Development (undated) 12 For a review of existing body of work on COVID-19 see Chandrasiri et al. (2020) and references cited therein. tourism and hospitality is unprecedented. It has led to devastating implications on tourism sector MSEs operating in economically backward areas such as AB. There is a debate on MSE’s ability to face the challenges of COVID-19. Can they survive through the crisis or will they go out of business? What is the role of the government in helping MSEs during the post-COVID-19 economic recovery? The present study is designed to engage in this debate concentrating on two main research issues: (a) what is the immediate economic impact of COVID-19 on tourism sector MSEs? (b) what is the recovery capacity of MSEs in tourism during the post-lockdown period?en-USCovid-19Tourism sectorMSEsResilienceArugam BayArticle