Has Iceland's Tourism Bubble Finally Burst?

Hallgrimskirkja church in Iceland
Hallgrimskirkja, Iceland // Photo by 1Tomm/iStock/Getty Images Plus/Getty Images

by Hugh Morris, The Telegraph, February 13, 2019

Iceland’s tourism boom that saw the island nation’s visitor numbers quadruple in just seven years could be over.

In 2010, fewer than 500,000 people made the trip to Iceland’s otherworldly shores. But after unprecedented publicity following the eruption of Eyjafjallajokull and its subsequent ash cloud, hundreds of thousands flocked to our estranged European neighbour in search of remarkable natural landscapes and untouched, volcanic vistas. Last year, 2.3million people visited.


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The extraordinary surge in travellers - nearly all entering through Reykjavik’s international airport before flooding the south coast - led to concerns that the Icelandic capital was being over-run and “Disneyfied”, with rents rising and locals being pushed out of the centre.

However, according to new figures released by the Icelandic tourist board, January registered a 5.8 per cent fall in arrivals compared to the same month last year. The decrease represents the first since April last year and one of very few over the last seven years.

The trend is easier to see in UK visitors, for which there was a fall for every month of last year compared to 2017, as high as a 17.9 per cent slip in April.

“It’s been an interesting winter,” said Clive Stacey, managing director of independent travel specialist Discover the World. “The amount of airlift provided between the UK and Iceland was at an all-time high, but it unfortunately coincided with a significant decline in UK visitors to Iceland.  We have been noticing this trend since the start of last year.”

“More recently numbers of visitors from other parts of the world have also recently started to decline.”

Iceland’s conundrum in recent years was how to accommodate thousands of tourists previously not catered for while protecting the delicate ecosystem that attracted them. But with the contraction of its low-cost airline WOW air following financial troubles, there is concern that its tourism bubble could now burst.

Kristjan Sigurjonsson, editor of Icelandic new website Turisti, says the failure of other airlines to pick up the slack has led to a slowdown. “Some of the biggest European carriers - Ryanair, KLM, Air France - are completely absent from the Icelandic market and no Asian or Middle Eastern carriers have launched flights to Iceland,” he said.

“This lack of interest by the foreign airlines make tourism on an island in the middle of the Atlantic very vulnerable.”

He said that it is likely the number of visitors to the country will fall again this year - despite a slip in the value of the Icelandic krona, which has previously kept prices famously high.

“But we have to keep in mind that tourism in Iceland has grown tremendously fast and even though we show a decrease in January, the number of foreign visitors was greater than January 2015 and 2016 combined,” he said.

Indeed, 2018 saw a 5.5 per cent increase overall of foreign arrivals - nothing on the 40 per cent hike of 2016 but still growth. “There is still a very large number of tourists coming to Iceland,” said Stacey, “but visits are becoming shorter and most travellers only get to explore Reykjavik and areas along the south coast.”

“This means that many of the most celebrated parts of the rest of the country are uncrowded and still offer the visitor a wonderfully uninhibited holiday.”

Unfortunately, efforts to spread visitors throughout the country have not proved successful. Last year, domestic carrier Air Iceland dropped its route between Keflavik, the south Iceland airport through which 99 per cent of visitors arrive, and Akureyri in the north, a decision the north’s tourist board called “disappointing”.

British visitors | Has the UK lost interest in Iceland?

The decline of WOW is not the only reason for Iceland’s slowdown. The nation’s meteoric rise to fame caught its tourist planners off-guard.

The huge influx in arrivals has caused a number of issues over the last few years. Attractions around the Golden Circle and south coast have become increasingly busy, with coach-loads of tourists flocking to see the Gulfoss waterfall, Thingvellir national park and the Geysir geothermal park.

Though the government is at the tail-end of a nine-year tourism strategy that concludes in 2020, Iceland’s tourism authority has had to act to educate visitors of both the risks to their safety and the importance of maintaining natural sites. In 2016 it launched a course on how to stay safe in the country, with a spokesperson at the time saying: “The majority of tourists want to experience nature, and we know that Icelandic nature must be treated with respect and care.”

Last year, the Park Rangers Society of Iceland released a statement calling for year-round protection at sites of natural wonder and “to put nature in first place” amid personnel shortages.

“The stream of tourists has increased many times over in just a few years, and is now considerable all year round, but land management has unfortunately not been able to keep up,” the statement reads. “The need for land management services throughout the year has never been greater.”

So are there positives in a visitor slump? “It is just going to give us a more sustainable growth,” Inga Hlín Pálsdóttir, director of tourist board Promote Iceland, told Telegraph Travel last year amid the first signs of a slow down.

“We have been seeing through the roof numbers, so for us, this is part of being able to be more sustainable.

“It doesn’t mean that people have stopped coming to Iceland. There is still so much to be discovered.”


This article was written by Hugh Morris from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected]

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