Can you imagine a country with more tourist than its resident? Not twice, not three times – but almost 7 times. It is Iceland. Why everyone is going to Iceland lately? Well, it is beautiful, right? That’s actually only one part of the story.
The story started in 2008. It was the year of financial crisis and Iceland hit it really hard. Iceland krona crashed, so it made quite cheap to visit Iceland. At this time, tourism grew but not so much.
Two years later, in 2010, another disaster struck Iceland. It was the natural disaster this time, which was the volcano eruption of Mt. Eyjafjallajökull. The volcanic ash disrupted the aviation industry and stranded a lot of people in Europe. This even put Iceland on the map. People heard the news about Iceland everywhere.
Then, Iceland tourism responded with some brilliant idea. Icelandair gave an offer to stopover at Reykjavik for free. The country only international airport, Keflavik, on the nation capital offers cheap landing fee for the budget airline. The formula is pretty simple: cheap + pretty destination = tourism boom.
The tourism industry is good news for the struggling Iceland. Unemployment decreases from 10 per cent to 3 per cent. It grows the country economy after the crisis.
However, more tourist also introduces backlash from the locals. There are more rental cars in the nation that causes a traffic jam. Landlords that realise they can make more money by putting their property on AirBnb, so some people got evicted from their rental home.
Will Iceland tourism keep growing?
With everything that grows like a bubble, it can burst sometimes. Firstly, Icelandic airlines have kept their price cheap despite oil prices have increased. This definitely unsustainable in the long run, and thus airlines will eventually need to increase their prices. Iceland is already one of the most expensive destinations, so if the ticket price increases, it will put off some people from visiting Iceland.
Secondly, the tourism industry has led to more construction. More restaurant opens in Iceland, more hotels being built and the price steadily increasing. When costs rise, travellers tend to shorten their trip.
Lastly, the global trend. We live in the Instagram era, it’s inevitable people will shift to a newer and cheaper destination in the future.