The adoption of e-commerce in the tourism sector has become one of the main business improvement areas in the hotel industry that seems unavoidable in competing and even surviving in a highly competitive industry. This study focuses on the impact of e-conimerce usage on business performance of hotels in Sri Lanka. It was found that many firms attempted to adopt e-commerce to upgrade their competitive capabilities but it seems e-commerce related businesses performance has not improved significantly over the years. In order to review this problem in the Sri Lankan tourism sector, the modified E-Value model was used as the conceptual framework. A cross sectional survey was earned out on 44 Sri Lankan hotels which are registered with the Sri Lankan Tourists Board and limited to the managerial position above the three star level category and structured questionnaire was sent through e-mail. Partial Least Square Structural Equation Method (PLS-SEM) analysis results indicated that technology competence, web technology investment, innovative culture, front end functionalities and back end integrations statistically significantly influenced ecommerce usage. Further. Front end functionalities better described the level of backend integration. Also e-commerce usage significantly influenced business performance of the firms. This research is limited to the tourism sector in Sri Lanka and views it only from the management perspectives of e-commerce adoption. Mangers and decision makers in tourism organizations will be henefitted by this study in enhancing their knowledge in the diffusion of c-commerce in the tourism industry. Ix Academics and researchers too will be benefited by further investigation of technological innovations and diffusion streams. The Origin of this research could be traced to Malaysia to investigate the impact of ecommerce usage on business performance and this model was further developed by adding innovative culture. Through the modified E-Value model the research was carried out to investigate the influences on e-cornmerce usage and business performance.