For several years now the growth of the tourism industry in Iceland has been in the double figures. Icelanders have not only grown accustomed to see year-over-year increase in the number of foreign visitors of 20-40%, but have grown to expect the actually figures to exceed even the most optimistic projections.
Read more: From the editor: Is there an angry backlash against tourism in Iceland?
While most in the tourism industry have welcomed this, some have worried that the rapid growth has created ideal conditions for an economic bubble. Others have worried that if the growth doesn't slow down tourism will get out of hand: Downtown Reykjavík would turn into a soulless Disneyland while all popular tourist sites would be overrun with tourists.
Peak Puffin
New data on the number of foreign visitors in 2017 suggests the Icelandic tourism industry might be reaching an important milestone: The phase of explosive growth in the tourism industry is probably over. We have reached peak puffin.
According to official figures the number of foreign visitors in December 2017 was only 8.4% higher than in December 2016. While most businesses or industries would feel pretty good about a 8.4% growth, this is actually the lowest year-over-year increase we have seen in seven years. The increase in 2016, compared to 2017, was a whopping 40%.
What's more: The increase is significantly below the projections of market analysts and Keflavík Airport.
No recession in sight
We have yet to see what effects this will have on the Icelandic economy and the tourism industry. Any slowdown in the tourism industry is a cause for concern, as tourism has been a major engine of growth in Iceland since 2010.
Read more: Tourism generated 8.4-10% of Icelandic GDP in 2016
The National Broadcasting Service reports that economists at Arion Bank are already sounding alarm bells, warning that the balance of payments might have turned negative in the fourth quarter of 2017, the first time Iceland sees a quarter of negative balance of payments since 2012.
The Icelandic economy is expected to continue to hum along nicely, though. In an interview with the local business newspaper Viðskiptablaðið an economists with the company Analytica pointed out that the outlook for the fishing industry, which has traditionally been Iceland's leading export industry, is very good, and that most leading indicators point to continued economic growth.
For several years now the growth of the tourism industry in Iceland has been in the double figures. Icelanders have not only grown accustomed to see year-over-year increase in the number of foreign visitors of 20-40%, but have grown to expect the actually figures to exceed even the most optimistic projections.
Read more: From the editor: Is there an angry backlash against tourism in Iceland?
While most in the tourism industry have welcomed this, some have worried that the rapid growth has created ideal conditions for an economic bubble. Others have worried that if the growth doesn't slow down tourism will get out of hand: Downtown Reykjavík would turn into a soulless Disneyland while all popular tourist sites would be overrun with tourists.
Peak Puffin
New data on the number of foreign visitors in 2017 suggests the Icelandic tourism industry might be reaching an important milestone: The phase of explosive growth in the tourism industry is probably over. We have reached peak puffin.
According to official figures the number of foreign visitors in December 2017 was only 8.4% higher than in December 2016. While most businesses or industries would feel pretty good about a 8.4% growth, this is actually the lowest year-over-year increase we have seen in seven years. The increase in 2016, compared to 2017, was a whopping 40%.
What's more: The increase is significantly below the projections of market analysts and Keflavík Airport.
No recession in sight
We have yet to see what effects this will have on the Icelandic economy and the tourism industry. Any slowdown in the tourism industry is a cause for concern, as tourism has been a major engine of growth in Iceland since 2010.
Read more: Tourism generated 8.4-10% of Icelandic GDP in 2016
The National Broadcasting Service reports that economists at Arion Bank are already sounding alarm bells, warning that the balance of payments might have turned negative in the fourth quarter of 2017, the first time Iceland sees a quarter of negative balance of payments since 2012.
The Icelandic economy is expected to continue to hum along nicely, though. In an interview with the local business newspaper Viðskiptablaðið an economists with the company Analytica pointed out that the outlook for the fishing industry, which has traditionally been Iceland's leading export industry, is very good, and that most leading indicators point to continued economic growth.
