16% Year-On-Year Growth in Overnight Tourism Stays for 2023

Tourists walk carefully during extreme weather in Reykjavík

In 2023, overnight stays in Iceland increased by 16% year-on-year, with Icelanders accounting for 22% of these stays. Looking ahead, 2024 is forecasted to be a record-breaking year for tourism, potentially surpassing the previous peak in 2018.

Icelanders accounted for 22% of overnight stays

According to initial figures for overnight stays in 2023, there were nearly 10 million overnight stays at all types of registered accommodations, compared to 8.5 million in 2022, representing a 16% increase year-on-year, Statistics Iceland reports

Overnight stays by Icelanders accounted for about 22% of all stays, or approximately 2.1 million, which is a 9% increase from the previous year. Overnight stays by foreign tourists were about 78% of all stays, or around 7.8 million compared to 6.6 million the year before.

In 2023, there were about 6.6 million overnight stays in hotels and guesthouses, and 3.4 million in other types of registered accommodations (apartment rentals, holiday homes, campgrounds, etc.). The total number of hotel stays was about 5.3 million, a 12% increase from the previous year. As noted by Statistics Iceland, all regions of the country saw an increase in overnight hotel stays.

Moderate increase expected in 2024

In a letter published on December 31, 2023, Bjarnheiður Hallsdóttir, Chairperson of the Icelandic Travel Industry Association (SAF), noted that forecasts predict a moderate increase in tourists in 2024. If these predictions hold, 2024 will set a new record in tourism in Iceland, exceeding the previous record from 2018.

“The year that has just concluded was predominantly positive for the Icelandic tourism industry. It seemed poised to become the first year since 2018 without major disruptions to the sector’s operations, a much-needed respite after the challenges of the preceding years. However, towards the year’s end, seismic events in Reykjanes cast a shadow over this progress. As a result, demand fell, and tourism companies in the vicinity of the seismic activity had to temporarily shut down.”

Record Number of Overnight Stays in Iceland in February

Tourists hiking to Sapphire Ice Cave.

A record number of overnight stays were registered in Iceland in February or 575,300. This is a 45% increase from 2022 and a 9.4% increase from 2018, the previous record year.

Hotel accommodation increased in all parts of the country

As noted by Statistics Iceland, a record number of overnight stays were registered in Iceland in February or 575,300. This is a 45% increase from 2022 and a 9.4% increase from 2018, which was the previous record year.

The number of overnight stays in February by foreign tourists accounted for ca. 79% of the total, or around 455,100. This is a 55% increase from February 2022 (i.e. 396,400). By comparison, the overnight stays by Icelanders were ca. 120,100, which is a 15% increase from February 2022 (104,500).

Statistics Iceland also notes that of the 575,300 total overnight stays, 435,700 were spent in hotels and guesthouses and about 139,600 in other types of registered accommodation (apartment accommodation, holiday homes, campsites, etc.). The estimated number of foreign overnight stays in home accommodation, outside the traditional overnight registration, in February was around 75,000.

Overnight stays in hotels in February were 371,900, which is a 37% increase from last year (270,900). Hotel accommodation increased in all parts of the country compared to February 2022. Foreign tourists accounted for 304,900 of overnight stays in hotels, or 82% of the total, while the number of nights spent by Icelanders was 62,300 (18%). The overnight stays of foreign tourists increased by 46% and the overnight stays of Icelanders by 8% when compared to last year.

Lastly, the availability of hotel rooms in February increased by 5% from February 2022. Room occupancy in hotels was 65.9% and increased by 14.9% from the previous year.

2.3 Million Tourists to Visit Iceland in 2023, Model Predicts

tourists on perlan

A predictive model expects 1.7 million tourists to visit Iceland through Keflavík Airport this year. The model expects this number to increase by 600,000 in 2023.

Predictive models

Dr. Gunnar Haraldsson, founder and CEO of the economic consultancy firm Intellecon, has led the development of a statistical model employed, among other things, to forecast tourist visits to Iceland. The project began in the fall of 2020.

Yesterday, Gunnar addressed the audience at a meeting hosted by the Icelandic Tourist Board. In his lecture, he introduced the model and some of its predictions, among them – that 1.7 million tourists would visit Iceland in 2022.

Speaking to RÚV, Gunnar stated that the model predicted 600,000 more tourists to visit Iceland in 2023: “Next year, we predict that number to increase to 2.3 million. All of this comes with caveats since there are a number of uncertainties that can impact the model.”

Alongside forecasting visits, Gunnar Haraldsson and his team also predict revenue and overnight stays. “We’re looking into credit-card turnover. The model predicts that tourists will spend ca. ISK 250 billion ($1.7 billion / €1.8 billion) this year and ISK 330 billion ($2.3 billion / €2.3 billion) next year. And so you can say that tourists spend a considerable amount on products and services in Iceland. Our numbers are predicated on data from local credit card companies,” Gunnar told RÚV.

Gunnar added that winter tourism was picking up steam, with some indications that seasonal fluctuations are gradually evening out. Overnight stays in 2022 are predicted to reach 4.5 million but will rise to 5.5 million next year. The model further predicts that 3.5 million tourists will visit Iceland in the year 2030. As noted in the press release by the Icelandic Tourist Board, this would mean a 50% increase from 2018, which was a record year for tourist visits to Iceland.

Record-Number of Icelanders Departed from Keflavík Airport in May

According to data from the Icelandic Tourist Board (Ferðamálastofa), 65,000 Icelanders departed from Keflavík Airport in May. The number of departures has not been higher since measurements began.

Previous record broken

As noted in a press release published on the website of the Icelandic Tourist Board this morning, 65,000 Icelanders flew abroad from Keflavík Airport in May. Never before have as many Icelanders departed from the country in May since measurements began. The previous record for departures among Icelanders from Keflavík was in May 2018, or nearly 63,000.

Approximately 450,000 travellers – of which 200,000 Icelanders – have departed from Keflavík Airport since the beginning of the new year. At the same time last year, only 32,000 departing passengers were recorded.

As far as the month of May is concerned, the departures of foreign passengers were also significant, with approximately 112,000 departures. This number has only been exceeded on four other occasions (the most in May of 2018). Nearly a fourth of departing passengers, or 26,000, were American. The second most populous group of travellers were British, or 9,500.

Double the overnight stays compared to last year

As noted by RÚV, the number of overnight stays in Icelandic hotels in May was approximately 255,000, twice as many compared to May last year (35% of beds were in use). Icelandic residents accounted for 54,000 overnight stays in May compared to 201,000 tourists.

The total number of overnight stays in Iceland in 2021 was just over 5 million. Never before had as many Icelanders accounted for such a large percentage of those overnight stays, or 40% (almost two million). In 2019, the number of overnight stays in Iceland was 8.5 million, a figure that plummeted during the pandemic. Statistics Iceland expects a busy summer as far as foreign tourists are concerned.

Overnight Stays in Hotels Decrease by 86%

According to preliminary figures from Statistics Iceland, overnight stays in hotels decreased by 86% in May compared to May 2019.

Preliminary figures 

Each month, Statistics Iceland publishes figures on the number of overnight stays in hotels in Iceland. These figures are published on average 30 days after a given month concludes, with approximately 90% of hotels submitting data to Statistics Iceland. 

Owing to the recent interest of users in this data, however, Statistics Iceland has begun immediately publishing preliminary figures from hotels that submit data shortly after a given month concludes (approximately 20% of all hotels). By adjusting the statistical weight of the data, Statistics Iceland has estimated that bed occupancy and the number of overnight stays in hotels could be estimated every month with a 95% confidence limit.

Preliminary figures indicate that overnight stays in hotels in May of this year were 44,000, compared to 315,000 in May 2019. Overnight stays in hotels in Iceland have decreased by 86%. Statistics Iceland also notes that Icelanders accounted for 38,300 overnight stays in hotels in May of last year. 

“The concurrent estimate of bed occupancy rate in May 2020 was 8.0% (95% CI: 6.8%-9.2%) compared with 45.3% in May last year.”

2 million beds

As noted by RÚV, summer is the busiest time of year for commercial lodging companies in Iceland. There are an estimated 2 million beds available at any given time for travellers in Iceland. 

As in other countries, there have been significantly fewer tourists in Iceland owing to the COVID-19 pandemic. Hotels have taken different approaches in their response to the crisis. Hótel Saga has announced the university students will be able to rent rooms on a long-term basis this fall. Other hotels have tried to appeal to local travellers.