Rioting has left three dead and more than 200 Muslim-owned establishments in ruins in Kandy, a picturesque hill district famed for its tea plantations and Buddhist icons.
The government imposed a state of emergency -- the first in its post-war history -- and deployed hundreds of soldiers to Kandy as authorities struggled to restore order.
Holidaymakers have been urged to avoid the hill resort, which is also home to Sri Lanka's holiest Buddhist shrine, the Temple of the Tooth Relic.
Prime Minister Ranil Wickremesinghe said images of Muslim businesses being torched and police firing teargas had dented Sri Lanka's hard-fought efforts to rebrand after decades of civil war.
"The work of a handful of saboteurs has caused a heavy blow to the country both economically and socially," he said in a statement.
Curfews in Kandy -- which attracts millions of tourists and pilgrims every year -- had "greatly inconvenienced" visitors to the central hill district, he added.
The Kandy riots, and isolated incidents of arson and vandalism in other parts of Sri Lanka, coincide with the island hosting a tri-nation cricket series against India and Bangladesh.
The tournament began Tuesday in Colombo, 115 kilometres (72 miles) from Kandy, but authorities were taking no chances with 1,000 police deployed to protect the visiting teams and spectators.
A group of Sinhalese and Muslim activists demonstrated against the riots outside the main railway station in Colombo, but the protest action was peaceful.
Tourism has emerged as a key earner for the island in the aftermath of the war, which cost more than 100,000 civilian lives before its bloody close after nearly four decades of fighting.
Visitor arrivals have increased steadily since then, with Sri Lanka attracting more than 2.1 million tourists and $3.2 billion in foreign exchange last year alone.
Just half a million tourists ventured to Sri Lanka in 2009 when the war ended -- roughly the same number who visited in the first two months of this year, show the latest figures from the island's tourism board.
The chief custodian of the Temple of the Tooth Relic in Kandy said visitor numbers had increased Thursday as a daytime curfew imposed to maintain order was lifted.
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
![The woman was recorded, among others, while bathing [BI]](data:image/svg+xml;charset=utf8,%3Csvg%20xmlns%3D'http%3A%2F%2Fwww.w3.org%2F2000%2Fsvg'%20width%3D'300'%20height%3D'172'%20data-ring-placeholder%3D'1'%3E%3C%2Fsvg%3E "The woman was recorded, among others, while bathing [BI]")
