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Telegraph / Life - Entertain

Has Iceland's tourism bubble burst?

Iceland has more than quadrupled the number of annual foreign visitors that arrive on its shores in just six years.

Last year the island, a three-hour flight from the UK, counted 2.1 million tourists through its doors, a figure it had not anticipated reaching until 2020. In 2010 just 459,000 people visited Iceland.

The unchecked growth in the number of people visiting a country with a population of just 334,000 has already sparked concern that Icelandic infrastructure would not cope, that the majesty of its natural landscape could not be protected, and that its capital, Reykjavik, would become “Disneyland”.

Reykjavik, Iceland's capital, has born the brunt of the tourism boomCredit:Getty

Has the bubble burst?

After a 40 per cent rise in arrivals in 2016, growth has fallen to around 10 per cent.

Iceland’s Arion Bank has published its forecast for the next two years, estimating seven per cent growth this year and just five per cent in 2019.

Last month domestic carrier Air Iceland announced it was dropping its route between Keflavik, the south Iceland airport through which 99 per cent of visitors arrive, and Akureyri in the north. The service was intended to help spread tourism throughout the country rather than have it slumped in the south of the country, but company director Árni Gunnarsson told news website Tourist that the service was not as successful as hoped. The north’s tourist board said the decision was “disappointing”.

The airline is also ending its direct flights to the UK, halting services to Aberdeen and Belfast. Gunnarsson said demand from Britain had drastically decreased as soon as the number of flights to Iceland increased.

This might go some way to explain why low-cost airline WOW air and flag carrier Icelandair has also dropped routes, the former scrapping its Bristol service, and the latter quitting Birmingham.

At a glance | How Iceland's tourism will grow

A spokesperson for the airline said it was suspending its Birmingham-Reykjavik route for “commercial reasons” but remained committed to “growing [its] gateways in the UK market”. It said it will increase its capacity from May this year from 45 flights a week to 47. Data from airline analysts OAG shows, too, that the number of flight bookings to Iceland remains steady, with a four per cent growth in 2018.

Why are fewer people visiting Iceland?

Clive Stacey, managing director of independent travel specialist Discover the World, which has been sending travellers to Iceland for 35 years, said the country’s reputation for being “somewhat overrun” has put people off.

“The slow down is partly due to the fact that the place is getting a reputation for being a little bit crowded, but that doesn’t mean that it is,” he said.

“It is not the place that it once was, and in some instances that is true, and people are voting with their feet, but it is a pretty big country, and there is a lot of variety there, it is just a case of visitors being a little more informed.”

Crowds gather to watch the geysirs around the Golden CircleCredit:Getty

He said that the rise in the value of the Icelandic krona, in part helped by the growth in tourism, had led to the country becoming increasingly expensive for longer breaks, so holidaymakers have been cutting the length of their trips while trying to see as much as possible. The result was heavy growth in the south-west of the country around the capital but poor visitor numbers elsewhere.

“The north last summer had one of its worst summers in five years [in terms of visitors]. What we really need is flights to places other than Keflavik so that people can step straight off the plane into an area where they can enjoy other parts of the country,” he said.

“The sad fact is that large swathes of the country with mind-blowing scenery and attractions are still largely unexplored by visitors and there are plenty of hidden gems to enjoy, sometimes all by yourself.”

29 reasons why you should visit Iceland

How has Iceland’s tourism boom damaged the country?

Iceland’s meteoric rise to fame, prompted by the bizarre combination of a financial crash and a volcanic ash cloud joining forces to put highlight the other-worldly appeals of our European neighbour, caught its tourist planners off-guard.

The huge influx in arrivals has caused a number of issues over the last few years. Attractions around the Golden Circle and south coast have become increasingly busy, with coach-loads of tourists flocking to see the Gulfoss waterfall, Thingvellir national park and the Geysir geothermal park.

Though the government is at the tail-end of a nine-year tourism strategy that concludes in 2020, Iceland’s tourism authority has had to act to educate visitors of both the risks to their safety and the importance of maintaining natural sites. In 2016 it launched a course on how to stay safe in the country, with a spokesperson at the time saying: “The majority of tourists want to experience nature, and we know that Icelandic nature must be treated with respect and care.”

Iceland is a very social media-friendly countryCredit:© 2013 Ingolfur Bjargmundsson/Ingólfur Bjargmundsson

Why is the slow down good for Iceland?

“This is not a worry at all. It is just going to give us a more sustainable growth,” said Inga Hlín Pálsdóttir, director of tourist board Promote Iceland. “We have been seeing through the roof numbers, so for us, this is part of being able to be more sustainable.

“It doesn’t mean that people have stopped coming to Iceland. There has been a rapid growth in the number of people coming to Iceland in the last few years.”

Pálsdóttir said the tourist board will continue to promote regions around Iceland outside of Reyjkavik in the hope that visitors numbers will be spread across the country. She said the government remains in talks with tour operators and airlines about introducing direct routes to Akureyri in the north and Egilsstaðir in the east.

The country's second city, and a gateway to the north, AkureyriCredit:Getty

Erna Bjargar Sverrisdóttir, a specialist at Arion Banks’ analytical department told Visir: “The growth we have seen has been enormous. This can not last forever. I think it's positive if we see a slower growth that the country can handle more.”

The tourist board is this week launching a campaign to coincide with Iceland’s presence at the World Cup in the summer, the first time the nation has ever qualified for the competition. The team’s success at the Euros in 2016 led to a spike in interest in the country, with Google searches for “where is Iceland” soaring.

“There is still so much to be discovered in Iceland,” said Pálsdóttir.