Iceland: Record Number of International Overnight Stays in Hotels 

Although the number of foreign tourists in Iceland shrunk by about 14% last year, there has been an increase in the number of foreigners staying in hotels. A decrease has been seen in the use of other types of accommodation.

Tourists in Reykjavik pose next to the The Sun Voyager, sculpture by Jón Gunnar Árnason. Credit: Gunnlagur Rögnvaldsson

Almost all travelers visiting Iceland fly in and out of Keflavik International Airport. Therefore, the tallying of foreign tourists on the island is very accurate; last year they decreased by 14%. The main explanation for this decrease is the bankruptcy of WOW Air in March last year, as this low-cost airline accounted for about three of every ten departures from Keflavik International Airport.

In total, almost 2 million tourists came to Iceland last year, which is not only a decrease compared to 2018, but also 2017. By contrast, this is far above the number that was in the years 2014 to 2016 when Iceland’s popularity as a destination increased rapidly.

However, it is clear from new information gathered by Statistic Iceland that foreign tourists in Iceland are increasingly applying for hotel accommodation at the expense of other accommodation options. Thus, overnight stays for foreigners in Icelandic hotels increased by 2% last year. Guesthouses, B&Bs, Camping and Holiday Homes received fewer visitors.

There are indications that the prices of Icelandic hotels have dropped significantly in the recent past which is a likely explanation for this trend to some extent. Currently, the length of stay for foreigners is longer and each hotel guest stays longer than in 2017 and 2018 when the length of stay significantly decreased.

The nationality that added the vast majority of overnight stays at Icelandic hotels last year were Chinese. Their overnight stays in hotels increased by 35,000 (or 13%) which need not be surprising as Chinese tourists increased by 10% during the period. However, the Danes had a similar number of overnight stays in hotels last year.

However, Danes are a smaller tourist group in Iceland than the Chinese, and the proportion of hotel stays by Danes increased by 41%. That, in itself, is very remarkable given that fewer Danes came to Iceland last year than in 2018. A clear indication that Danes chose to stay in hotels much longer last year while traveling around Iceland.

Actually, the number of hotel accommodations by visitors from Germany, France, Spain and other nations also increased, although fewer tourists came from there.