News of a vaccine has inspired hopes that tourism will have a better summer than first projected, RÚV reports. “We’re still a long way away from bookings streaming in”, says Jóhannes Þór Skúlason, CEO of The Icelandic Travel Industry Association, but according to him, people have started searching the internet for travel options once more. “The traveller has started dreaming of travel, but it can take a while.” While the industry has reported fewer bankruptcies than predicted, and there is news of companies starting to rehire people they laid off, recovery for the industry is still a long way off.
Morgunblaðið reported this morning that 66 staff members with the Hertz car rental agency laid off this spring would be rehired. Jóhannes does not have more examples of large rehirings in the tourism sector and says it’s more common that companies are rehiring important staff one by one. “It’s mostly the government’s support actions that are enabling companies to rehire the staff that they want to hold on to. People with knowledge and experience that is the key to rebuilding the companies.”
Jóhannes says there are plenty of unknown factors concerning next summer, one of which is if Schengen will reopen its borders before the summer. “I’ve been looking at the projections, our own, the ones in Icelandair’s renaissance plan, and the ones made by the Central Bank of Iceland, which supposes that 750,000-950,000 tourists might come to Iceland in 2021.” He adds that their own projections assume just under a million tourists will visit Iceland in 2021 and that positive vaccine news has increased the chances of fulfilling that projection. “It all depends on if tourism can get started at the beginning of summer or later in the summer,” he adds.
While domestic herd immunity as well as in the countries around us should ease travel restrictions, Jóhannes mentions that it’s not just a question of being allowed to travel again, it’s also a question of affording to. The economic effects of the pandemic will hit many people hard, and the unemployed are less likely to travel, he says.
When asked if it will help that a weaker króna makes the exchange rate favourable for tourists, Jóhannes replies that it might help, but other factors are more important. For instance, the US is one of Iceland’s largest markets, and the summer’s success depends on when Schengen borders will reopen to American tourists.
While next winter might be a good one, this December is a slow one compared to last year’s. “I think the Christmas and New Years’ Market is completely out for now. It’s mostly people on short trips, 3-5 days, something that’s now impossible,” he says.
While there have been fewer bankruptcies than they feared, companies in tourism are heavily in debt, and it will take the industry three or four years to regain its standing. Jóhannes Þór credits the government’s action with reducing bankruptcies but is concerned about the debt that companies find themselves in. “It will take the tourism industry much longer than just next year to recover. It will likely take three to four years to regain the balance we had,” says Jóhannes Þór.
