Tourism in Iceland Experiences a Slowdown

Iceland has been the poster child for the positive and negative effects of the overtourism phenomenon. Tourism in Iceland began to grow following the April 2010 eruption of the Eyjafjallajökull volcano in the country’s south that acted as a global billboard for Iceland’s natural beauty. At the time, Iceland was trying to recover after a brutal financial crisis in 2008 and tourism came as the perfect cure for it, empowering a new breed of entrepreneurs.

Iceland landscape

Nearly a decade into Iceland’s unprecedented growth as a global tourism hotspot, a variety of issues have led to a tourism slowdown – the strong krona, the rising labour costs and the unexpected collapse of Wow Air. Let’s take a look at some numbers. In June, the beginning of Iceland’s busiest traditional tourism period, tourist visitation dropped by 15 percent year-over-year bringing visitation back to 2017 levels. Airbnb stays dropped by 11 percent while unpaid accommodations, like camping, declined a massive 30 percent, presenting more evidence that Iceland’s tourism economy is shifting away from affordability to a more expensive and upscale proposition for travellers. Iceland’s hotel sector raises a special concern if economy uncertainty persists as it has been built up during the tourism boom.


Many Icelanders, surprisingly, see this slowdown as a good thing for the country’s travel sector. The country needs to sit back and rethink how tourism fits into a more sustainable overall economy for Iceland.

Source: Skift

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