700,000 Foreign Tourists in 2021

mbl.is/Eggert Jóhannesson

Vala Hafstað

Nearly 700,000 foreign tourists visited Iceland last year, compared with 486,000 in 2020, Morgunblaðið reports. In 2019, they were more than 2 million.

Skarphéðinn Steinarsson, head of the Icelandic Tourist Board (Ferðamálastofa), states that the number of businesses in the travel industry did not change much last year. Few Icelandic companies in the travel industry experienced a suspension of payments last year, he states, and a third of the companies returned a profit in 2020.

Skarphéðinn Steinarsson.

Skarphéðinn Steinarsson. mbl.is/Eggert

“2020 was expected to be terrible, but the situation isn’t any worse than this,” he notes. “On the other hand, debts are increasing and owners’ equity is decreasing.”

“There has not been any consolidation to speak of,” he states, “ and the number of companies is still well over 2,000 — most of them very small ones…Therefore, the development that was expected hasn’t begun.”

In December of 2020, the accounting firm KPMG came to the conclusion in a report it did for the Icelandic Tourist Board that the problems of debt in the Icelandic travel industry would have to be addressed in 2021. Consolidation in the sector was recommended. Skarphéðinn admits that unless there will be a major turnaround in the coming months, consolidation is unavoidable.

Statistics Iceland estimates that during the first 11 months of 2021, 4.8 million overnight stays were sold in Iceland, representing a 47 percent increase from 2020. That is a larger number of overnight stays than during the same period in 2013. The figures do not include overnight stays at apartments listed on websites like Airbnb.

According to Kristófer Oliverson, head of FHG — an association of companies that offer overnight accommodation — income from hotel rooms sold was lower than average in 2021, due to lower prices and a lower occupancy rate, although there was an increase from 2020. Kristófer notes that the number of hotels in operation did not change much last year, but that the construction of new hotels did slow down.

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