800,000 Tourists Expected in Iceland

Landsbanki bank expects income from the travel industry to increase by ISK 120 billion (USD 993 million; EUR 814 million) this year, compared with 2020, partly because tourists stay longer in Iceland than they used to do, Morgunblaðið reports. In addition, the bank expects the number of tourists to increase by 67 percent, compared with last year.

Its latest forecast assumes that 800,000 tourists will visit the country this year, whereas its national economic forecast from October of last year predicted their numbers to reach only 600,000 this year.

According to Landsbanki economist Gústaf Steingrímsson, foreign exchange earnings from the travel industry amounted to ISK 117 billion last year, whereas the bank predicts them to reach ISK 236 billion (USD 1.9 billion; EUR 1.6 billion) this year. Should the total number of tourists only reach 650,000 this year instead of 800,000, those earnings would only amount to ISK 192 billion (USD 1.6 billion; EUR 1.3 billion).

“Of course, a precise prediction is hard to make,” Gústaf admits, “but we believe the [Fagradalsfjall] eruption will have a considerable impact. The eruption has brought attention to Iceland as a destination, and we expect a considerable influx of people wanting to see the eruption while it lasts. That’s the main reason we raised the number to 800,000 in our forecast.”

When asked about the main variables which could affect final income figures this year, Gústaf mentions the development of the COVID-19 pandemic and how well we’ll manage to get the tourism industry and the airline schedules back on track.

“There appears to be a widespread labor shortage in the travel industry,” he notes, “and while that’s the case, it will limit the income stream.”