Sri Lanka is a deceptively small country. Like neighboring country India, it is packed densely with cities, each which offers something different. The food is similar to South Indian food, consisting of a lot of spicy curries, roti (breads), and rice. However, Sri Lanka still manages to feel culturally unique. It is home to a number of UNESCO world heritage sites, and boasts some really nice beaches. This is a great country for backpackers, as its size makes it easy to get around.
Budget (2014): If you stay at inexpensive guesthouses ($7-10 per night), eat at cheap restaurants, and take public transport, $20 per day should be more than enough. Food and accommodation is more expensive than in India. I'd say they're about the same as Southeast Asian prices. However, public transportation is very cheap here. Most train/bus rides won't cost you more than $5. There are a number of expensive UNESCO sites (Anuradhapura ruins, Sigirya rock, etc). If you plan on visiting one or more of these places, be sure to add a few extra dollars to your daily budget.
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Budget (2014): If you stay at inexpensive guesthouses ($7-10 per night), eat at cheap restaurants, and take public transport, $20 per day should be more than enough. Food and accommodation is more expensive than in India. I'd say they're about the same as Southeast Asian prices. However, public transportation is very cheap here. Most train/bus rides won't cost you more than $5. There are a number of expensive UNESCO sites (Anuradhapura ruins, Sigirya rock, etc). If you plan on visiting one or more of these places, be sure to add a few extra dollars to your daily budget.
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Colombo
This is the largest city in Sri Lanka, and its commercial capital. While it is slightly more tolerable than most big Indian cities, Colombo is nevertheless an over-sized, crowded, noisy Asian city. I wouldn't recommend spending more than a day or two here.
Galle
This is the fourth largest city in Sri Lanka. It is located in the south. Although the city itself is not particularly interesting, Galle is the gateway to some popular tourist destinations, such as Unawatuna.
Kandy
It is a fairly attractive city known primarily for its temples. There are quite a few tourists here, along with every type of shop you can imagine. The lake is nice to walk around.
Matara
This is one of the most insanely friendly cities I've been to in Sri Lanka. I was greeted and waved at by almost everyone. This was even one of the few places where tuk-tuk drivers didn't suck!
Negombo
Because of it is closer to Colombo airport than Colombo, many people head here as the first or last place of their trip. I would definitely recommend Negombo. It is way more relaxing and tourist-friendly than noisy Colombo.
Nuwara Eliya
Located in the hill country of Sri Lanka, Nuwara Eliya has a distinctly different feel from the rest of the country. First of all, the weather can be rather brisk. Also, there is beautiful nature all around, and plenty of tea plantations.
Sigiriya
This city is known mostly for its (expensive) sites. While I didn't visit any of them, I found the city to be very relaxing and friendly. It caters quite a bit to tourists, so there are (chained) elephants giving people rides. Prices are rather expensive for Sri Lanka.
Unawatuna
Ah, here is another tourist-oriented beach resort, that I can't help but enjoy. Everything heavily caters to tourists. Be forewarned, things tend to be very pricey in Unawatuna.