"We had 650,000 tourists last year, but this year we crossed the 500,000 mark in the first eight months alone," tourism chief Nalaka Godahewa said. "We have set a target of attracting 2.5 million tourists by 2016."
Sri Lanka Tourism, the main regulatory authority for the tourism sector, said it will streamline approvals and seek greater investments in hotels to double room capacity to 45,000 by 2016.
Godahewa said he expected arrivals to rise more rapidly with the increase in hotel rooms. Sri Lanka hopes to increase its tourism earnings to $2.75 billion by 2016, he added.
The government is also expecting a boom in domestic aviation to meet the increasing tourism demand.
The island banned domestic flying during the height of fighting between troops and Tamil Tiger rebels.
The guerrillas had used light aircraft to bomb military as well as civilian targets before they were crushed in an onslaught by security forces in May 2009.
The fighting seriously hurt the leisure sector with many hotels closing down.
However, hotel rates have more than doubled since the end of the separatist conflict and tourism is seen as a key sector contributing to an average eight percent annual economic growth since the end of the fighting.
Sri Lanka wants to push its beaches, tea-growing mountains, heritage sites and wildlife parks to woo high-spending foreign holiday-makers.