Don’t call it a comeback: Iceland preps for the return of tourism

REYKJAVIK, Iceland—The travel industry was upended last spring by the Novel Coronavirus. Travelers near and far fretted over suddenly canceled trips to Greece, beach stays in the Bahamas, and skiing in the Alps. But lost in all the travel ramparts was one of the fastest-growing travel spots—a destination most people wouldn’t expect—Iceland. 

However, once the pandemic finally dissipates, Iceland’s government is betting that Iceland will be one of the top tourist destinations. 

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A confluence of factors—and a bit of good luck—led to a decade-long tourism boom in Iceland. The 2008 financial crisis precipitated a steep drop in the value of the Icelandic Krona, which in turn made it much more affordable to visit the country. In another ironic twist of fate, a natural disaster: the eruption of Eyjafjallajokull volcano shut down large amounts of European airspace and brought attention to Iceland. 

Iceland capitalized on their newfound fame: the government rolled out the “Inspired by Iceland” marketing campaign shortly after the eruption, and travelers came from far and wide to experience Iceland. 

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The number of visitors went from 459,000 in 2010 to a record-breaking 2.3 million in 2018, over six times Iceland’s population. And the tourism explosion was felt economically by Iceland as well: tourism accounted for 8.6 percent of gross domestic product and 39 percent of the country’s total export revenue. Thirty thousand people, or roughly 16 percent of Iceland’s workforce, were employed by the tourism industry in 2018. 

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What a difference two years can make. 

In 2020, the stark differences in tourism numbers show the profound impact of the coronavirus: In an average October, the Radisson BLU Saga Hotel would be full of tourists to see the Northern Lights, trade fairs, and tours of Iceland’s waterfalls and geothermal spas. 

This year, “It’s completely quiet.” said Ingibjorg Olafsdottir, the hotel’s general manager. “It’s surreal.” Since March, the staff has shrunk from 140 to 16. With over 200 rooms and an average occupancy rate of over 75 percent, The Radisson was at 11 percent occupancy just last month. 

To its credit, the government is remaining optimistic that tourism will soon bounce back. Iceland is investing $12 million in tourism infrastructure and improving roads and harbors across the country. They have also invested more than $9 million in a program that gives free travel vouchers to Icelandic citizens and residents. Strong marketing for domestic tourism will soon be followed by an international campaign once travel restrictions are lifted. 

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This year alone, the Icelandic government invested close to 1.7 billion Icelandic Króna (roughly $12.3 million) in public and private infrastructure. The improvements are twofold according to Skarphedinn Berg Steinarsson, director-general of the Icelandic Tourist Board: “…Allowing them to receive bigger numbers—creating parking spaces, walking paths, etc.—but also preserving the nature to make sure that the sites will not be worn down when we get the visitors back.”

Roughly 1 billion Króna has been earmarked for infrastructure at national parks, protected areas, and large public tourist sites. The other 700 million Króna is going to the country’s Tourist Site Protection Fund. At least in this author’s case, Iceland’s marketing push has been effective. Once travel bands are lifted, Iceland is near the top of my travel list. 

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Source: The New York Times

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