Downtown Reykjavík has been experiencing a construction boom in recent years. The overwhelming majority of the construction has been hotels, built to meet the demand And more are coming. While the City Council has voted not to permit the construction of any new hotels in dowtown Reykjavík, a number of projects are already underway. The construction of several major hotel projects outside the downtown area is also scheduled to start this year.
Read more: Reykjavík City places curbs on new hotel construction: No more hotels downtown
According to analysis by economists at Íslandsbanki bank the hotel construction boom is currently peaking. Investment in hotel construction in Reykjavík peaked in 2016 at 16 billion ISK (160 million USD/130 million EUR), drops to 8.3 billion ISK (80 million USD/70 million EUR) this year, but is then projected to jump back to 14.8 billion ISK (150 million USD/120 million EUR) in 2019. In 2020 new construction of hotels is expected to begin dropping steadily.
This year will see a significantly smaller investment in hotels than previous years. Only 381 new hotel rooms are scheduled to be added this year, while 547 rooms will be added in 2019 and 453 rooms in 2020.
Read more: Why are hotels in Reykjavík so expensive? Simple: Supply and Demand
The hotel construction boom has been fueled by the dramatic growth in tourism in recent years and a shortage of hotel rooms. As the growth in tourism has slows down from double digit annual growth rates in 2011-16 to more manageable 4-8% the hotel market should reach some balance, allowing hotel rates in the capital to drop.
Downtown Reykjavík has been experiencing a construction boom in recent years. The overwhelming majority of the construction has been hotels, built to meet the demand And more are coming. While the City Council has voted not to permit the construction of any new hotels in dowtown Reykjavík, a number of projects are already underway. The construction of several major hotel projects outside the downtown area is also scheduled to start this year.
Read more: Reykjavík City places curbs on new hotel construction: No more hotels downtown
According to analysis by economists at Íslandsbanki bank the hotel construction boom is currently peaking. Investment in hotel construction in Reykjavík peaked in 2016 at 16 billion ISK (160 million USD/130 million EUR), drops to 8.3 billion ISK (80 million USD/70 million EUR) this year, but is then projected to jump back to 14.8 billion ISK (150 million USD/120 million EUR) in 2019. In 2020 new construction of hotels is expected to begin dropping steadily.
This year will see a significantly smaller investment in hotels than previous years. Only 381 new hotel rooms are scheduled to be added this year, while 547 rooms will be added in 2019 and 453 rooms in 2020.
Read more: Why are hotels in Reykjavík so expensive? Simple: Supply and Demand
The hotel construction boom has been fueled by the dramatic growth in tourism in recent years and a shortage of hotel rooms. As the growth in tourism has slows down from double digit annual growth rates in 2011-16 to more manageable 4-8% the hotel market should reach some balance, allowing hotel rates in the capital to drop.
