The December tsunami affected about a fifth of the island's 250 star-class hotels but most reopened within months and were slowly getting back on their feet, although occupancy rates remained low.

The industry was hoping the truce between government troops and Tamil Tiger rebels that has been in place since 2002 would provide stability to help the security-sensitive hospitality trade in the year ahead.

But the sudden surge of violence in the northeast linked to the island's long running Tamil separatist conflict has brought new jitters to the industry -- especially after the Norwegian-led truce monitoring mission on Thursday warned war "may not be far away."

"(These) headlines are not making things easy for us," said Abbas Esufally, director of Hemas Holdings, one of Sri Lanka's leading inbound tour operators.

"If it (war) happens, the whole industry will collapse. If war breaks out the industry will plummet all the way down," Esufally said.

He said Sri Lanka had not done enough to shake off its tsunami-hit image, unlike the Maldives and Thailand which were also devastated by the massive Indian Ocean waves. "And (it) is telling, with dismal foreign guests nights and empty hotel rooms in the resorts," he said.

Leading tour operator Jetwing bemoaned that tourism was recovering from the tsunami slower than it had from the bombs and assassinations that plagued the island from 1972 until the 2002 truce.

"Even before the fighting resumed in a smaller scale recently, we were not bouncing back fast enough," said Gehan Cooray, director of the Jetwing Group, which also runs a hotel chain.

"Occupancy levels are 40 to 50 percent below pre-tsunami levels."

Cooray, who also heads the hoteliers' association, said hotels outside Colombo and the hill resorts in nearby historic Kandy, were struggling to fill rooms although tourist board statistics were more optimistic.

Arrivals for the 10 months to October 2005 rose 3.4 percent from a year earlier to 435,072 - largely due to tsunami aid workers being included in official data - the statistics show.

Arrivals for October alone, however, dipped 25 percent to 44,095 from 59,442 a year earlier. The figures coincided with the slowing flow of aid worker arrivals, official say.

Tourism earnings from the January to October period have also fallen to 267 million dollars from 317 million dollars for the same period last year and total 2005 revenues will fall below the 400 million dollars recorded in 2004, industry officials said.

Despite a 7.3 million dollar post-tsunami promotion campaign, the government admits business has failed to gather steam.

After targeting 600,000 arrivals this year, forecasts have been revised down to 500,000 visitors, Tourist Board director general S. Kalaiselvam said.

"There was certainly a setback after the tsunami, but I think the message that we are putting things behind and moving forward will help us next year," said Kalaiselvam.

He did not discuss the impact of the current violence, but Tourist Board chairman Udaya Nanayakkara brushed aside hoteliers' security fears, and said the board was going ahead with planned international promotions.

The board has switched tact since the tsunami, attempting to lure more well-heeled visitors to fill its 12,000 hotel rooms rather than push mass-market package tourism that caters to budget travellers.

And Nanayakkara is upbeat that the island will greet 600,000 visitors next year, earning 600 million dollars.

"We are no longer positioning ourselves as a cheap beach destination," said Nanayakkara. "We are not only looking for more tourists, but those who are spending more."

Although many hotels are having a good December, thanks to locals spending their annual bonuses, the main resorts are yet to see the foreigners who traditionally flock at this time of year to the island known for its golden beaches, lush tea-growing mountains and historic sites dating back 2,500 years. "We've never had it so bad. This is the worst ever peak season, where hotel rooms are being filled up with Sri Lankans returning home and not the traditional tourists," said Gehan Perera, an official of the Sri Lanka Inbound Tour Operators Association.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.