BCG hugely underestimated the number of visitors in Iceland

It is safe to say that tourism in Iceland would not have made all these headlines lately if the prediction of the Boston Consulting Group specialists would have come to reality.

Credit: Alex Lopez

In the fall of 2012, the spokespeople for the leading comp­anies in the Icelandic tourist industry as well as the country’s most prom­inent govern­ment officials all gath­ered together in the Harpa conf­erence center to hear special­ists from Boston Consulting Group introduce their proposals for the future organ­ization of the Icelandic tourist sector.

During their presentation in Harpa, the Boston Consulting Group (BCG) special­ists also described their predictions regar­ding the number of tourists that might be expected in the following decade. Their estimate was divided into two segments, one detailing the proj­ected numbers if the tourist sector would by and large heed the advice of BCG, the other descri­bing the forecast if things be left status quo. As the graph below shows, the latter forecast was somewhat more pessim­istic than the former. The graph also reveals how early on the BCG forecast went off course and how far off their estimates were when last year is consi­d­ered. Last year the number of visitors surpassed two million while BCG proj­ected that this would be the first year where the tourist numbers would pass the one million mark. Their estimate was off by 105% but in fact the BCG forecast went off the rails in the very first year even as it was presented in the fall of that year.

However, the British team of consult­ants for BCG are not the only ones who have run into difficulties proj­ecting tourist numbers. Special­ists working for the Icelandic banks have not been able to go anywhere near the eventual numbers even though their estimates are typically aimed at shorter periods of time.