Officials in Sri Lanka say tourist arrivals declined by more than 18 percent in February compared with a year ago. They say the slump began last September, months after government troops and Tamil Tiger rebels resumed fighting after a four-year lull.

President of the Tourist Hoteliers Association of Sri Lanka, Hiran Cooray, says the resumption of the ethnic conflict has been a big blow to an industry that had blossomed following a truce in 2002.

"During the peace process we could not handle the business," he said. "Tourism has dried up from France, because there is a very strong travel advisory from the French government, the Germans, the Dutch are also not doing too well."

Tourism officials fear the situation may worsen after rebels mounted their first air strike at an air force base near the country's international airport in March. The raid prompted Hong Kong's Cathay Pacific Airlines to temporarily suspend daily flights in and out of Sri Lanka.

Tourism officials have begun a massive advertising campaign in key markets such as India to calm fears, and point out that the fighting is in areas far away from the country's beaches and other tourist spots.

The story is dramatically different in Nepal, another South Asian country that has witnessed a protracted civil conflict. Nepal's decade-long insurgency is over, and the Maoist rebels have joined an interim government.

As a result, tourists are flocking back to the country, where some of the world's tallest peaks are a big draw. That is good news for an industry that saw tourist arrivals decline steadily since 1999, when they had peaked at half a million.

The head of Nepal's Tourist Board, Aditya Baral, says there are hopes that tourist arrivals will rise substantially this year.

"We are quite optimistic in terms of tourist arrival, and as per the ground survey we are doing in terms of arrival we are almost about 35 percent increase compared to last year this month," said Baral.

Tourism provides employment for an estimated half a million people in Nepal. And the tourist industries of both Sri Lanka and Nepal are significant foreign exchange earners for the two countries.