Increase in Overnight Stays Among Icelanders

Having fun at Gullfoss waterfall

According to the short-term indicators on the tourism industry recently released by Statistics Iceland, more Icelanders stayed in hotels than in the year previous. Simultaneously, a slight drop in the number of foreign overnight stays was also measured.

Slight decrease in overnight stays

Total overnight stays in March 2024 amounted to 428,197, compared with 423,554 in March 2023. This represents a slight decrease of around 1%.

Notably, the number of overnight stays by Icelanders increased significantly year-on-year, with March 2024 seeing 85,136 overnight stays, a 10% increase from March 2023.

Overnight stays from foreign visitors did, however, slightly decrease. In total, foreign travellers bought around 343,000 hotel overnight stays in March of this year.

Slight decrease in air traffic year-on-year

Among the other statistics released in the report are numbers on air traffic. In the short-term indicators recently published, there was a slight decrease in the total number of passengers and flights. In April of this year, some 5,409 flights arrived and departed from Keflavík International Airport, a decrease of around 7%.


Despite the slight decrease in air traffic, the tourism industry continues to grow. In February 2024, travel companies turned over almost 109 billion ISK [$788 million, €725 million], which is a 10% increase year-on-year.

Other trends that can be seen in the latest statistics include a decrease in road traffic across much of the Ring Road, though road traffic in South Iceland increased by 4%. The total number of rental cars also increased, growing from 27,432 in May 2023 to 29,827 in May 2024. This represents an increase of 9%.

 

2023 May Be a Record Year for the Icelandic Tourism Industry

Tourists iceland Fjallsárlón glacier lagoon

The CEO of the Icelandic Travel Industry Association says 2023 could be a bigger year for tourism than the record years before the pandemic, Vísir reports. New figures from Statistics Iceland show dramatic growth in the industry between 2020 and 2022. Tourism as a proportion of Iceland’s GDP amounted to 7.8% in 2022 compared to 4.8% in 2021. It averaged around 8.2% between 2016 and 2018, but this year is likely to break that record.

Each tourist spending more

The summer tourism season is beginning and Jóhannes Þór Skúlason, CEO of the Icelandic Travel Industry Association, says all indicators for the industry’s success are good no matter where you look. “For example the consumption of tourists in the country, which is the highest we’ve ever seen, on variable prices. And that in a year where we have fewer tourists than before, which tells us that the value each tourist is leaving behind is greater than before. Which is also what we want to see,” Jóhannes Þór stated.

Tourism capacity is relative

Asked whether the number of tourists is reaching the maximum that Iceland can receive, Jóhannes Þór answered: “All questions on how many tourists we are able to receive are very relative.” For example, whether most tourists stay in the capital area or whether they spread out across the country is one factor that impacts capacity, according to Jóhanness, who also says that Iceland has built up tourism infrastructure successfully in recent years.

“The goal now must be to achieve stability in a sustainable industry that produces enormous amounts of money for the national economy and builds up society for all of us. That is the goal,” Jóhannes stated.

September Recording-Breaking Month for Tourism

tourism industry iceland

In a report by Statistics Iceland, overnight stays in hotel accommodations in Iceland are shown to be 7,144,400 for the year so far. This represents a 2% increase from 2018, the previous record-breaking year before the global pandemic.

Should the trend hold, 2022 could be the busiest year ever in the Icelandic tourism industry.

In September of this year, some 853,500 overnight stays in hotel accommodations were recorded, representing a 27% increase from September 2021. Approximately 81% of these overnight stays can be accounted for by foreign tourists, or around 691,000 stays. Icelanders and residents of Iceland accounted for the remaining 19%, at around 161,000 overnight stays. Compared with September 2021, this represents a slight decrease in the amount of domestic tourism, when Icelanders were generally more represented during the travel restrictions imposed by COVID-19.

 

tourism industry iceland
Hagstofa Íslands

Not surprisingly, the region of Iceland with the largest yearly increase was the capital region, with an 11.8% increase in overnight stays from September 2021 to September 2022. Following the capital region were West Iceland and the West Fjords, with an 8.3% increase in the same period.

The region least affected by the recent upswing was East Iceland, with a negligible 0.5% increase in overnight stays year-on-year.

The total supply of hotel rooms has also risen since last year. This summer saw an acute shortage of accommodations in Iceland, driving many prices up. Statistics Iceland reports now an 8% increase in hotel capacity, with an average occupancy over the year of around 79%.

 

Iceland Needs to Import Cooks, Servers, and Tour Guides, Says Industry Expert

Dill restaurant Michelin star

Iceland needs to import chefs, wait staff, tour guides and other specialized workers to support the tourism industry during the current boom, says Jóhannes Þór Skúlason, Managing Director of the Icelandic Travel Industry Association (SAF). Mbl.is reports.

“We need cooks, we need waiters, we need all kinds of specially trained staff, specialized tour guides, etc,” remarked Jóhannes Þór in an interview on the news program Dagmál on Friday. “If we just look at cooks and waiters, there are a couple different dimensions to the problem.”

At the base level, he continued, there just aren’t enough people in Iceland going into training programs for these professions, which means that there is currently a shortage of qualified professionals on the local job market. Jóhannes Þór said the government should be putting more effort into drawing students into these programs and advertising the future opportunities that would be available to people who completed these courses of study.

“But that won’t be enough,” he said, particularly in the present moment. In order to meet its present needs, Iceland needs “to import a group of cooks and trained waiters” right now. But while Jóhannes Þór wasn’t willing to name a specific number of trained service professionals he thought Iceland should be seeking to bring in from abroad, he would concede that “clearly several dozen” are needed at least.

72% of Icelanders Support Tourism Fee, According to Recent Poll

Geysir Iceland tourism

According to a recent poll by market research company Prósent for Fréttablaðið, some 72% of Icelanders agree that foreign tourists should pay for access to natural sites and parks, while 54% of Icelanders believe that Icelanders should not have to pay for access to these sites.

Only 12% of Icelanders disagreed with charging tourists for access, while some 30% of respondents did agree that Icelanders should pay a fee as well.

In a statement concerning the recent poll, Lilja Alfreðsdóttir, minister of tourism, stated that fees in the industry are being examined. The fees are planned to go into effect starting in 2024. The goal of such fees will be to ensure that municipalities also benefit equally from tourist traffic.

Many natural sites and parks in Iceland already charge for parking, including many attractions along the Golden Circle and South Coast. These parking fees were initially controversial but came in response to the need to develop facilities in light of the growing volume of tourism Iceland saw in the 2010s. Two of Iceland’s most popular tourism sites, Skógafoss and Geysir, were even placed on at-risk status by Iceland’s Environmental Agency.

Complicating the question of parking- and tourism fees is the fact that many of Iceland’s most iconic tourism destinations are actually located on privately owned land, meaning that it is in large part up to the landowner to regulate the fees and land use. The lack of cooperation between bureaucracy and landowners has been identified as a serious roadblock to safety improvements at Reynisfjara, where a foreign tourist recently died. There have also been related questions in recent years about foreign land ownership in Iceland and whether there should be more restrictions.

The online survey was conducted from June 22 to July 4, sampling some 2,000 individuals aged 18 and over.

PLAY Reports ISK 1.5 Billion Loss in Q1, Maintains ‘Strong Balance Sheet and Healthy Cash Position’

iceland budget airline play

Iceland’s newest discount airline, PLAY, reported a loss of ISK 1.5 billion [$11.5 million; €10.78 million] in the first quarter of 2022. Per the Interim Report (January – March 2022) issued by the company this week, this comes as no real surprise, and can largely be credited to global factors, namely, “[t]he Omicron variant impacted revenue during the quarter, and the war in Ukraine resulted in higher fuel price towards the end of the quarter.”

The negative EBIT (Earnings Before Interest and Taxes) was “expected,” writes CEO Birgir Jónsson, who remains optimistic about the airline’s prospects. Travellers are showing an increasing willingness to fly, and the airline’s “financial position…continues to be strong, with a strong balance sheet and healthy cash position.” PLAY’s equity ratio stands at 22% ($56.5 million; €52.7 million; ISK 7.3 billion) and it is maintaining a cash position of ISK 5.4 billion [$43 million; €39.2]. Currency risk is a factor in the airline’s operations, “…since a large part of its cash position is in the ISK, while PLAY’s operating currency is in USD. PLAY is therefore exposed to the fluctuation of the two currencies against each other.”

Rapid network expansion

Between January and March 2022, PLAY carried 57,500 passengers, with a 20% jump in passenger numbers from February to March. The airline hired 45 pilots and over 100 new cabin crew members in Q1.

PLAY is steadily expanding its network and plans to continue to do so in Q2. Service to Baltimore/Washington, D.C. began in April; service to Prague, Boston, Lisbon, Gothenburg, and Brussels began in May, with destinations Stavanger, Malaga, and Trondheim on the horizon before the end of the month. In early June, service to Palma de Mallorca and Bologna will commence, as will daily flights to New York in the US. Indeed, PLAY will be the first airline to operate international flights from New York Stewart International Airport (located about 75 mi; 120 km outside of New York City) post-pandemic.

‘Strong booking momentum’

As part of its strategy to counter rising fuel prices that have resulted from the war in Ukraine, however, PLAY is adjusting its summer fleet plan and will not be offering three weekly flights to and from Orlando, Florida this fall as planned. Additional measures to counter rising fuel prices include a fuel hedging strategy, a fuel surcharge, and ongoing schedule adjustments “to eliminate unprofitable flying.”

Passenger hesitation in the wake of the Omicron variant and global unrest appears to be waning, and bookings are on the upswing. “In February, [there were] 59% more sold seats compared to January, despite the war in Ukraine. This improvement in booking inflow has continued into the second quarter of 2022, with more than fourfold increase in sold seats in April compared to January. Because of this strong booking momentum,” concludes the report, “PLAY expects to report improved utilization in the coming months.”

New Icelandic Ad Campaign Trots Out Email Replies While You Horse Around on Vacay

A new ad campaign is likely to have travellers chomping at the bit to visit Iceland. Tourism PR company Inspired by Iceland now invites travellers to “OutHorse” their emails—that is, reign in the common urge to work while on vacation and instead, relax, undistracted and unbothered, while a real Icelandic horse tölts out an email response for you on an enormous, equine keyboard.

Visitors can choose from one of three Icelandic horses, each with their own unique horsenality, to hoof up thoughtful replies. There’s Litla Stjarna (“Types fast, but might take a nap), Hekla, and Hrímnir (“Assertive. Efficient. Shiny hair”). “They are trained in corporate buzzwords,” explains actor Ólafur Darri Ólafsson (Trapped) in voiceover. “Your boss will never know the difference.”

This isn’t Inspired by Iceland’s first rodeo when it comes to employing quirky, zeitgeisty humour to encourage people to travel to Iceland. The company actually grew out of the eponymous 2010 ad campaign that put an ironic and optimist spin on the Eyjafjallajökull volcanic eruption. In 2020, during the global COVID-19 lockdown, they encouraged would-be travellers to “let it out,” and scream out their lockdown frustrations via speakers set up across the country. And, most recently, it skewered Mark Zuckerberg’s Metaverse, inviting visitors to come experience the country’s “immersive, open-world experience.”

If you’d like to join the herd of travellers capitalizing on this “revolutionary service,” gallop over to www.outhorseyouremail.com, and sign up.

Icelandic Tourism Approaching Pre-Pandemic Levels

túristi tourist ferðamaður tourism

International flights in and out of Iceland’s Keflavík International Airport are nearly as many now as they were in 2019, before the COVID-19 pandemic hit. Yesterday, the airport saw 119 arrivals and departures, as compared to around 150 per day during the summer of 2019. Tourism operators report that bookings are also approaching 2019 levels and business owners are optimistic this summer will be a good one.

“As the situation is now, the prospects are very good,” Bjarnheiður Hallsdóttir, chairperson of The Icelandic Travel Industry Association (SAF) told RÚV. “We’ve seen a steady increase in demand from foreign tourists over the past weeks and months. There’s a lot of optimism, and I know examples of some companies that have actually reached 80-90% of the sales they had at this time of year in 2019. So it all bodes well.”

Tourism companies prepared

Some operators predict that more international tourists will opt for driving the Ring Road on their own this summer, rather than purchasing group tours, due to pandemic-related concerns. Large cruise ships are expected in the country this summer, as well as at least two ships that will be travelling around the coast.

Bjarnheiður says Iceland’s tourism industry is prepared to receive the wave of international visitors. “We were lucky that most tourism companies survived and for that we can largely thank the government’s response measures and just people’s perseverance in the industry. So I think that most companies in tourism are pretty well prepared for this and have had a good amount of time to prepare themselves, so I think we’re ready for the wave [of visitors].”

Renovations at Keflavík Airport this summer

Those travelling through Keflavík airport this summer can expect to see some renovations taking place, as the airport will be adding 20,000 square metres of facilities over the next two years. Guðjón Helgason, Isavia’s public relations officer, says the company will aim to minimise the impact of the renovations on travellers.

Biggest Drop in Unemployment in Two Decades

Tourists iceland Fjallsárlón glacier lagoon

Unemployment in Iceland dropped from 10.4% to 9.1% between April and May of this year, the largest month-to-month decrease in the country since 1994. The number of people on the unemployment register has decreased by around 2,400 during the same period. The biggest decrease in unemployment was measured in tourism-related sectors, where unemployment decreased between 18 and 20 per cent. Vísir reported first.

While tourism showed the most change, unemployment decreased across all sectors between April and May, faster than projected. Minister of Social Affairs Ásmundur Einar Daðason expressed his satisfaction with the development, pointing to the government’s employment initiative “Hefjum störf!” that aimed to create at least 7,000 jobs through financial support to both private and public institutions that hired new employees. Around 10,400 jobs are now available through the initiative.

Ásmundur Einar added that the goal is to create even more jobs in the coming months in partnership with the business community. According to the Directorate of Labour’s projections, unemployment is expected to fall to 7.3-7.7% in June, which would mean the number of people on the unemployment register would drop from 20,000 in April to 14,000 by the end of this month.

Icelandic Locals to Receive a Second Travel Voucher This Year

Goðafoss waterfall

Icelanders can expect to receive another domestic travel voucher this year, in a repeat of the 2020 government initiative meant to support tourism companies by encouraging locals to travel within the country. Minister of Tourism Þórdís Kolbrún Reykfjörð Gylfadóttir told RÚV the government is still finalising the details of this year’s voucher, which will be announced in the next few days. Many locals are planning to spend their summer vacation in Iceland.

Last year, all residents of Iceland 18 and older received a voucher worth ISK 5,000 ($36/€33), redeemable at hotels, restaurants, and other tourism-related businesses across the country. Around 200,000 redeemed their voucher, while around 38,000 have not yet done so. Last year’s vouchers are valid until the end of May 2021. The initiative cost Iceland’s government around ISK 1.5 billion ($10.8 million/€9.8 million).

Þórdís says there is political will to revive the initiative, though it has not yet been decided what the amount will be, nor for how long the voucher will be valid. “We are working on it in the context of other issues in this hopefully final phase of this project,” Þórdís stated. “That work is going well and it will become clear in the next few days how it will be implemented.”

Unclear Whether Foreign Tourists Will Multiply

Iceland’s Chief Epidemiologist has discouraged locals from travelling abroad in light of the high rate of COVID-19 infection in many other countries. Locals interviewed by RÚV this week stated they were planning to spend their summer vacation within Iceland’s borders. It’s not clear how many foreign tourists Iceland can expect this summer, though border regulations are expected to change from May 1 allowing travellers from low-risk areas to eschew quarantine upon arrival.