The temporary closing of the Blue Lagoon comes at a big cost

The estimated loss of revenue due to the closing of the Blue Lagoon in recent weeks is between ISK 4 and 4.5 billion, according to Morgunblaðið.

The Blue Lagoon has been closed for about seven weeks, with the exception of two days. Operations there were closed on November 8 following a major earthquake in the area. Apart from the lagoon itself, there are two hotels, restaurants, a spa, a research lab that also have been closed.  

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The Blue Lagoon has opened again

The Blue Lagoon’s annual accounts for the year are not yet available. The company’s revenue totalled ISK 16.7 billion in 2022, and the profits amounted to ISK billion. Although the tourism industry did not fully recover until mid-year 2022, following the COVID-19 pandemic, there was a complete shift between years.

The number of tourists has increased considerably this year, but in all, 2023 can be compared to 2018’s record year. According to Morgunblaðið, the Blue Lagoon’s revenue had increased further this year, to ISK 18.5 billion in the first ten months of the year. However, it has not yet been calculated if there is a profit in that period.

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Closure extended until December 7

The estimated tax bill on Blue Lagoon operations, based on the company’s normal operations, is almost ISK 20 million per day according to calculations by Morgunblaðið. The Blue Lagoon has been closed for over 50 days. The government still earns revenue from the Blue Lagoon, however, as the company is still paying its employees wages, so the state and municipalities receive revenue from those wages. This reduces the government’s losses. About 800 people work for the Blue Lagoon, the company’s largest employer in the Reykjanes peninsula.

The company’s procurement costs have still not been acounted for in the equation, with total purchases totalling more than seven billion ISK in 2021. Morgunblaðið has no information on procurement in 2023, but it is clear that it has reduced its turnover in recent weeks, resulting in a reduction in VAT-related turnover.