The growth in the number of foreign travellers visiting Iceland is expected to slow down from 40% in 2016 to 5% by 2019. Previous projections had envisioned significantly greater growth in the number of foreign travellers.
Read more: Minister of tourism: Our goal is not to increase the number of tourists further
The primary reason for the downward revision in the increase in the number of foreign travellers visiting Iceland is the appreciation of the Icelandic króna. The Icelandic currency has appreciated by 15-45% since 2013 compared to major international currencies. A stronger króna means it is more expensive for foreigners to visit Iceland.
Slower growth could be a good thing
An economist with Arion Bank told the local news site Vísir that the currency was acting to dampen excessive economic fluctioations. Tourism has grown dramatically in past years, eliminating unemployment and creating an excess demand for labour. Some economists have worried that the economy is showing signs of overheating. In 2014 fewer than 1 million foreign visitors visited Icealnd. The number is expected to top 2.5 million by 2019.
The booming tourism industry has brought with it a flood of foreign currency which has pushed up the price of the króna, making Iceland more expensive to foreign visitors. In 2013 the average price of hotels and restaurants in Reykjavík was 25% above the EU average. This year Icelandic prices are expected to rise to double the EU average.
The growth in the number of foreign travellers visiting Iceland is expected to slow down from 40% in 2016 to 5% by 2019. Previous projections had envisioned significantly greater growth in the number of foreign travellers.
Read more: Minister of tourism: Our goal is not to increase the number of tourists further
The primary reason for the downward revision in the increase in the number of foreign travellers visiting Iceland is the appreciation of the Icelandic króna. The Icelandic currency has appreciated by 15-45% since 2013 compared to major international currencies. A stronger króna means it is more expensive for foreigners to visit Iceland.
Slower growth could be a good thing
An economist with Arion Bank told the local news site Vísir that the currency was acting to dampen excessive economic fluctioations. Tourism has grown dramatically in past years, eliminating unemployment and creating an excess demand for labour. Some economists have worried that the economy is showing signs of overheating. In 2014 fewer than 1 million foreign visitors visited Icealnd. The number is expected to top 2.5 million by 2019.
The booming tourism industry has brought with it a flood of foreign currency which has pushed up the price of the króna, making Iceland more expensive to foreign visitors. In 2013 the average price of hotels and restaurants in Reykjavík was 25% above the EU average. This year Icelandic prices are expected to rise to double the EU average.
