copy the linklink copied!Iceland

copy the linklink copied!Tourism in the economy

Tourism is the major export earner in Iceland, accounting for ISK 520 billion in 2018 – equivalent to 39% of total export revenue. The sector directly contributed 8.6% of GDP in 2017, and employed some 30 000 people – representing 15.7% of the workforce. Travel exports represented 47.7% of total service exports in 2018.

After nine consecutive years of growth in tourism arrivals, the trend has recently slowed. International tourist arrivals totalled 2.0 million in 2019, representing a 14.2% decline from 2018. This is due mainly to reduced air access but also a strong Icelandic krona. The top three source markets by volume are the United States (23.4% of international tourists), the United Kingdom (13.2%), and Germany (6.7%). Together, these three markets account for 43.3% of total tourist arrivals.

Domestic tourism is relatively stable, with domestic overnight stays totalling 1.1 million in 2018, representing 13% of total overnight stays.

copy the linklink copied!Tourism governance and funding

The Ministry of Industries and Innovation is responsible for developing tourism policy and co-ordinating the work of governmental bodies. The recently merged Department of Tourism and Innovation, is the lead department and it oversees the operation and performance of the national tourism board, the Icelandic Tourist Board.

The Icelandic Tourist Board’s responsibilities include the implementation of government tourism policy, planning and support for regional development, licencing and monitoring of licenced activities, data collection, processing and presentation, safety, quality and consumer protection in relation to tourism, and administration of the Tourist Site Protection Fund.

Visit Iceland is the official destination marketing office, charged with attracting visitors to the country. It is part of Promote Iceland, which is a public-private partnership established to promote Icelandic exports, foreign direct investments and Iceland as a tourism destination. Promote Iceland is overseen by the Ministry of Foreign Affairs.

A Tourism Task Force established in 2015 was charged with implementing the Road Map for Tourism in Iceland covering the period to 2020. The Task Force includes different representatives of ministries responsible for tourism, finance, environment and natural resources, and transport and local authorities. The Task Force has served as a co-ordinator in Iceland’s efforts to address tourism’s impacts. When its mandate comes to an end in 2020, a revised Tourism Council, with wider membership, will continue much of the Task Force’s work.

Local municipalities are responsible for the planning and management of many visitor attractions. With the support of the Icelandic Regional Development Institute, associations of municipalities operate Development Agencies, which have delivered a variety of tourism projects, including the newly launched Arctic Coast Way touring route. Seven regional marketing offices collaborate extensively with both Promote Iceland and the Icelandic Tourist Board, which provides financial support.

The overall public budget allocated to tourism in 2019 was ISK 2.2 billion, allocated as follows: ISK 714.4 million to the Icelandic Tourist Board, ISK 544 million to the Tourist Site Protection Fund, and ISK 1 billion to tourism services, of which ISK 405 million was for marketing and promotion.

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Iceland: Organisational chart of tourism bodies
Iceland: Organisational chart of tourism bodies

Source: OECD, adapted from the Ministry of Industries and Innovation, 2020.

copy the linklink copied!Tourism policies and programmes

The key challenge for Iceland is to maximise the gains from tourism while protecting the assets upon which tourism depends. Tourism growth has increased pressure on nature, infrastructure and society. Tourism planning, infrastructure investment, data collection, tourist safety and visitor flow management remain priorities. Improved skills and quality (Box 1.13), and increased digitalisation of the sector are also important to maintain competitiveness. Reducing carbon emissions from tourism related activities is a further area of focus as part of the Government’s plan for Iceland to become carbon-neutral by 2040.

A new long-term Tourism Policy Framework 2020-30 with a strong focus on sustainability was published in 2019. This will guide the work on a new action-oriented tourism strategy from 2020, together with a new Tourism Impact Assessment model, which takes the carrying capacity of the environment, infrastructure, society and economy into account and is fundamental to the future development of Icelandic tourism. Data from a new Environmental Assessment tool launched in 2019, to assess the status of protected areas and natural attractions, feeds into the Tourism Impact Assessment framework (Box 3.16).

Infrastructure at tourist sites is improved through the strategic National Infrastructure Plan, featuring 3-year rolling investment plans, and the Tourist Site Protection Fund. Criteria are being defined for the establishment of a Model Tourism Sites programme that will promote an exceptional tourist experience at selected natural attractions. Legislation is underway to enable a concessions regime for private tour operators to operate on public land. There are also plans to improve co-ordination in the field of nature conservation, with the establishment of a new National Park Institute.

Regional co-ordination is centred on seven regional Destination Management Plans developed in 2018-19, supported by the planned establishment of destination management organisations (DMOs) in each region by the end of 2021. The new DMOs will have a broader remit than the regional marketing offices currently in existence, and will co-ordinate tourism priorities and regional development with a broad mandate including data collection, innovation, product development, skills, digitalisation and marketing.

Marketing efforts under the Inspired by Iceland banner continue to focus on responsible travel behaviour. Tourism-specific policy actions to reduce carbon emissions include plans to increase the proportion of rental cars running on alternative fuels and the electrification of harbours.

Other areas of policy focus include:

  • A Route Development Fund established in 2015 to encourage air access into regional airports.

  • Development of the Arctic Coast Way long distance road route.

  • Improvement of data collection arrangements via the Icelandic Tourist Board, including the recently established Tourism Data Dashboard.

  • Development of a digital toolbox to make it easier for tourism businesses to analyse their technology needs and find solutions.

  • Startup Tourism accelerator programme to encourage innovation in tourism, support new companies, create more recreational opportunities, and encourage tourist distribution across seasons and around the country.

  • Tourism Cluster Initiative to promote competitiveness and value creation within the Icelandic tourism industry and to develop a co-operative network.

  • Legislation on sharing accommodation economy, which limits home sharing to 90 days per year per household.

  • Improvements to the regulatory framework of the tourism sector, following on from an OECD Competition Assessment Review of Laws and Regulations.

copy the linklink copied!Statistical Profile

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Iceland: Domestic, inbound and outbound tourism

2014

2015

2016

2017

2018

TOURISM FLOWS, THOUSAND

Domestic tourism

Total domestic trips

..

..

..

..

..

Overnight visitors (tourists)

700

587

647

686

701

Same-day visitors (excursionists)

..

..

..

..

..

Nights in all types of accommodation

1 085

909

1 044

1 098

1 105

Hotels and similar establishments

500

496

598

599

661

Other collective establishments

510

366

397

451

402

Private accommodation

75

47

49

49

42

Inbound tourism1

Total international arrivals

1 250

1 587

2 146

2 690

..

Overnight visitors (tourists)

998

1 289

1 792

2 225

2 344

Same-day visitors (excursionists)

252

298 e

354 e

466 e

..

Top markets

United States

152

243

415

576

695

United Kingdom

181

241

316

323

298

Nordic Countries

164

160

175

182

165

Germany

94

103

133

156

139

France

59

66

85

100

97

Nights in all types of accommodation

4 405

5 561

6 764

7 277

7 444

Hotels and similar establishments

2 787

3 613

4 571

4 974

5 200

Other collective establishments

1 107

1 260

1 438

1 527

1 519

Private accommodation

511

688

754

776

724

Outbound tourism

Total international departures

..

..

..

..

..

Overnight visitors (tourists)

413

467

558

638

668

Same-day visitors (excursionists)

..

..

..

..

..

Top destinations

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

..

TOURISM RECEIPTS AND EXPENDITURE, MILLION ISK

Inbound tourism

Total international receipts

304 641

369 554

462 542

501 446

340 021 p

International travel receipts

160 079

213 349

289 343

321 721

340 021 p

International passenger transport receipts

144 562

156 205

173 199

179 725

..

Outbound tourism

Total international expenditure

120 744

139 278

159 587

184 233

199 253 p

International travel expenditure

113 605

131 407

152 025

177 049

199 253 p

International passenger transport expenditure

7 139

7 871

7 561

7 184

..

.. Not available; e Estimated value; p Provisional data

1. Arrivals from demand side surveys; Nights from supply side surveys.

Source: OECD Tourism Statistics (Database).

 StatLink http://dx.doi.org/10.1787/888934076970

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Iceland: Enterprises and employment in tourism

Number of establishments1

Number of persons employed2

2018

2014

2015

2016

2017

2018

Total

..

..

..

..

..

..

Tourism industries

2 164

19 205

21 734

25 667

28 552

30 090

Accommodation services for visitors

568

4 187

4 945

5 940

6 535

6 602

Hotels and similar establishments

451

3 834

4 542

5 517

6 075

6 186

Food and beverage serving industry

614

7 489

8 264

9 209

9 866

9 737

Passenger transport

200

3 794

4 149

4 963

5 736

7 167

Air passenger transport

16

..

..

..

..

..

Railways passenger transport

0

0

0

0

0

0

Road passenger transport

163

..

..

..

..

..

Water passenger transport

21

..

..

..

..

..

Passenger transport supporting services

..

..

..

..

..

..

Transport equipment rental

62

592

749

1 012

1 199

1 191

Travel agencies and other reservation services industry

559

2 018

2 507

3 388

3 966

4 063

Cultural industry

54

418

464

472

529

555

Sports and recreation industry

107

707

656

683

722

775

Retail trade of country-specific tourism characteristic goods

..

..

..

..

..

..

Other country-specific tourism industries

..

..

..

..

..

..

Other industries

..

..

..

..

..

..

.. Not available

1. Data refer to number of enterprises.

2. Data refer to number of employees.

Source: OECD Tourism Statistics (Database).

 StatLink http://dx.doi.org/10.1787/888934076989

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Iceland: Internal tourism consumption
Million ISK

2017

Domestic tourism expenditure

Inbound tourism expenditure

Internal tourism consumption

Total

130 558

376 578

534 009

Consumption products

130 558

376 578

534 009

Tourism characteristic products

104 781

320 833

452 256

Accommodation services for visitors

30 256

85 627

124 560

Food and beverage serving services

5 853

38 698

49 460

Passenger transport services

22 306

79 859

113 951

Air passenger transport services

19 771

64 968

95 718

Railways passenger transport services

..

..

..

Road passenger transport services

1 636

14 233

16 522

Water passenger transport services

899

658

1 711

Passenger transport supporting services

..

..

..

Transport equipment rental services

8 429

36 013

45 118

Travel agencies and other reservation services industry

25 588

71 418

97 603

Cultural services

4 003

3 447

7 451

Sports and recreation services

8 346

5 770

14 116

Country-specific tourism characteristic goods

..

..

..

Country-specific tourism characteristic services

..

..

..

Other consumption products

25 777

55 746

81 753

Tourism connected products

23 207

51 266

74 472

Non-tourism related consumption products

2 571

4 480

7 280

Non-consumption products

..

..

..

.. Not available

Source: OECD Tourism Statistics (Database).

 StatLink http://dx.doi.org/10.1787/888934077008

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