Iceland becomes a more affordable destination but visitor numbers drop

The total number of foreign visitors in 2019 is projected to decline by 16% from the previous year.

Thingvellir in Iceland. Credit: Giuseppe Mondi / Unsplash

The number of people visiting Iceland dropped by 8% during the first four months of 2019 and the total number of foreign visitors to Iceland is expected to decrease even further by the end of the year. According to a report from Arion Bank’s research department, the total number of foreign visitors in 2019 is projected to decline by 16% from the previous year.

Arion Bank attributes the downturn to WOW air’s collapse in March and to the grounding of Icelandair’s two Boeing 737 Max aircrafts which has prevented Iceland’s legacy carrier from filling the gap created by WOW air’s disappearance of the Icelandic aviation market.

It’s not all bad news, though. Due to the devaluation of the Icelandic króna in relation to major currencies such as the US Dollar, the British Pound, and the Euro, Iceland has become a more affordable destination for travellers. As a result, tourist spending has increased by 15% in the first quarter of 2019, compared to the same time period last year, and foreign card turnover increased by 9.3%.

However, concerns regarding ticket prices are aired in the report. Cheap flight prices seem to have a greater effect on visitor numbers than the affordability of a country. The report argues that Iceland’s tourist numbers remained high even during the time the country became one of the most expensive destinations in the world, only because flight prices to Keflavík stayed cheap. Therefore, Iceland could see a further drop in visitor numbers if flight prices increase – and that despite the affordability of the country.