The nearby (4 kilometres (2.5 mi)) Muslim village of Pottuvil is the center of commerce and transportation while tourist accommodations lie along the beach to the south of Pottuvil Arugam Bay (4 kilometres (2.5 mi)) is also the gateway and the only road access to the Yala East National Park.

[3][4] During the period of fighting between the central government and Tamil separatists tourism was fairly low key and the hotels often bought the catch of the fishermen.

[5] As a result of the peace, tourism expanded and many fishing people who had moved to areas less touched by the conflict returned.

[6] In the aftermath of the Tsunami fishing people were forbidden to return, officially on the grounds of safety but allegedly as a result of pressure from the hotel owners.

[2][9] On 23 October 2024, police increased security in Arugam Bay after being notified of a possible threat to Israeli tourists.

[11] Israel's national security council warned Israelis living in the area to leave immediately and to avoid large gatherings.