Stronger currency to hit Icelandic tourism industry

Wage rises and an ever more expensive króna will put prices up for tourists from Iceland’s main markets and could harm the tourist industry, an industry leader warns.

“It is clear that Icelandic tourism will not be as profitable this year as it was in 2015,” says Þórir Garðarsson, COB and Head of Corporate Development at tour operator Gray Line Iceland.

“When we present foreign wholesalers and agencies with our tariffs for 2017, they see that Iceland is getting more expensive year on year,” Garðarsson explains.

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“The increase is mainly due to the rise in Iceland’s national currency. Wage rises – leading to higher overheads for tourism operators – are also a factor, but less so than the stronger króna .”

The króna has risen against the dollar, and even more so against the euro. According to Garðarsson, 2016 prices were based on one euro buying ISK 140-145, whereas for 2017 the figure is widely expected to be in the region of just ISK 110-120.

The plummeting pound sterling is making Iceland even more expensive for British tourists . One pound bought ISK 192 on 1 January this year, but just ISK 140 today, making Iceland almost 40% more expensive in the space of eleven months.

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“The rising króna is now working against us,” warns Garðarsson. The vast majority of Iceland’s tourists come from US, UK and other European countries.

“It is now very pressing for tourism and the export sector for careful thought to be put into the effect a continuing rise in the value of the króna could have over the next few years.”