Government sends out vouchers to spend on domestic travel

To jump start the Icelandic tourism industry the state is giving locals vouchers to spend in the tourism sector.

Námaskarð Pass is a geothermal area in north Iceland. CREDIT: ICELAND.IS

During the past decade Iceland has seen a great increase in the number of tourists and today few nations rely as much on tourism as Iceland does. The current situation, caused by the Coronavirus/COVID-19, will therefore cause serious setback for industry, especially as the high season is approaching.

This is, of course, the situation in many other countries but Icelandic tourism is especially vulnerable. The reason is the very limited domestic market. Iceland has only 360 thousand inhabitants but welcomed almost six times as many tourists last year. So, even if Icelanders start travelling more in their own country, they will only fill a small portion of the huge gap that foreign visitors will leave behind in the coming weeks and months.

A voucher financed by the state is expected to get the nation on the road again. The voucher will be sent to all Icelanders, 18 years or older, who can then use it to buy services from companies in tourism. The value of the voucher will be little more than 5000 ISK (37USD/34EUR).

That amount is scarce when it comes to hotel accommodation, however, it could be used towards cheaper accommodations as well as to pay for various types of travel-related entertainment and food. Options in these areas have increased rapidly in recent years with the rise in tourism. As a result, a large part of the population could use the gift cards in their local communities instead of using them to lower the cost of traveling abroad.

The low amount could also mean that tourism companies are offering those who use their vouchers something extra to sweeten the deal.