South Florida Sun-Sentinel (Sunday)

Iceland keeping afloat

Small country positionin­g itself for major tourism rebound after pandemic

- By Paige McClanahan

In a normal October, the Radisson BLUSagaHot­el in Reykjavikw­ould be buzzing with tourists hoping for a glimpse of the Northern Lights, business travelers in town for trade fairs, honeymoone­rs gearing up for a tour of Iceland’swaterfall­s and geothermal spas. This year, of course, things are very different.

“It’s surreal,” said Ingibjorg Olafsdotti­r, the hotel’s general manager. “It’s completely quiet.”

SinceMarch, evenwith government support, Olafsdotti­r’s staff has shrunk

from140 to just 16. The hotel, which has more than

200 rooms, normally has an occupancy rate of above

75%, but it fell to 11% in September.

Tourism is undergoing an unpreceden­ted downturn all over theworld, but several factors make Iceland particular­ly vulnerable to the industry’s crash: geographic isolation, a small domestic population, strict border measures and an economy that had come to depend heavily on foreign tourists. A recent surge in coronaviru­s cases has added to Iceland’s challenges.

But while visitor numbers are low, Iceland is positionin­g itself for a major tourism rebound after the pandemic. The government is investing more than $12 million in tourism infrastruc­ture. To keep the tourism industry afloat in the short term, the government is also investing more than $9 million in a program that distribute­s free travel vouchers to Icelandic citizens and residents.

Alack of touristswa­s

the last thing that Icelanders wereworryi­ng about in

2018, when the country welcomed a record-breaking 2.3million visitors— more than six times Iceland’s population.

Itwas the height of a tourism boom that most observers trace to 2008, when a steep drop in the value of the Icelandic krona suddenly made Iceland much more affordable to outsiders. Then in April

2010, the ash fromthe eruption of Iceland’s Eyjafjalla­jokull volcano forced the temporary closure of a large swath of European airspace— and put Iceland into headlines around the world. What started as a travel nuisance turned into a giant publicity boon.

Tourism took off. Visitor numbers rose from459,000 in 2010 to more than 2.3 million in 2018. Economical­ly, tourism came to account for 8.6% of gross domestic product and 39% of the country’s total export revenue.

Signs of tourism’s impact began cropping up in Reykjavik: Dunkin’Donuts appeared in 2015; aHard Rock Cafe opened the following year; H&Marrived in 2017. In the countrysid­e, sites that had oncewelcom­ed a handful of visitors were full of tour groups.

In 2015, a Justin Bieber music video transforme­d an obscure corner of the Icelandic countrysid­e into a must-see spot for the Instagram crowd. The site— Fjadrarglj­ufur canyon— was soon inundated with tourists.

Itwasn’t to last. In 2017, the krona strengthen­ed, making the country more expensive. InMarch 2019, WOWAir, an Icelandic low-cost airline, collapsed. Tourist numbers that year declined by about 14%. And then came 2020.

The summer started off

fairlywell. Coronaviru­s numbers in Icelandwer­e

lowand travel within Europe’s Schengen Area, of which Iceland is a member, began opening up. Travelers to Iceland could choose either to undergo a virus test on arrival or self-quarantine for 14 days. The government rolled out a campaign to promote tourism among the island’s roughly 366,000 inhabitant­s, offering tourism voucherswo­rth about $36 to every Icelandic resident over age 18.

The summerwas “pretty good, considerin­g everything,” said Bjarnheidu­r Hallsdotti­r, the chair of the board of the Icelandic Travel Industry Associatio­n and the chief executive of two tourism companies. “And then suddenly out of nowhere, the government decided to change the rules at the borders. Since then, everyone is crying.”

Under the new rules, which took effect Aug. 19 and are still in place, arriv

ing passengers may choose either to submit to two screening tests for the virus, separated by five days’ self-quarantine, or to skip border screening and self-quarantine for 14 days after arrival.

As in most parts of the world, the tumult of the last several months has triggered a surge in unemployme­nt in Iceland. Between March and August, about 8,000 people— roughly4% of the country’s labor force — were laid off, according to Iceland’s Directorat­e of Labour; most of those layoffswer­e in the tourism industry.

After the 2008 banking crisis,

Iceland’s tourism boom helped to propel the country into an impressive economic rebound. But while the rapid growth in foreign arrivals created jobs and revenue, it also outpaced the government’s ability to build the infrastruc­ture to manage so many new visitors. Now, with tourist numbers low, the government has a chance to catch up.

This year, the Icelandic government is investing about $12.3 million in infrastruc­ture at both public and private tourist spots across the country, said Skarphedin­n Berg Steinarsso­n, director general of the Icelandic Tourist Board. Roughly 1 billion krona has been set aside for infrastruc­ture at national parks, protected areas and large public tourist sites, while 700 million krona is going into the country’s Tourist Site Protection Fund.

The largest grants from the Tourist Site Protection Fund are supporting the constructi­on of a viewing platform on Bolafjall Mountain in theWestfjo­rds, Steinarsso­n said, as well as infrastruc­ture at Studlagil Canyon, where a viewing platform is being installed aswell as new walkways, toilets and informatio­n signs.

The kind of infrastruc­ture being installed at Studlagil is already in place at most of Iceland’s more establishe­d destinatio­ns, particular­ly in the Golden Circle, an area not far from Reykjavik that includes some of the country’s most famous tourist destinatio­ns.

Plenty of Icelanders would have seen these places over the last several months. Amarketing campaign encouragin­g Icelanders to explore their country was rolled out in the late spring, while the government’s travel voucher campaign helped to jump-start demand for hotels, restaurant­s and attraction­s.

“Itwas a success,” said Steinarsso­n of the efforts to encourage domestic tourism. “Icelanders really enjoyed their country during the summertime. And that’s what counts.”

 ?? BARA KRISTINSDO­TTIR/THE NEW YORK TIMES PHOTOS ?? The Skogafoss waterfall near Skogar, Iceland, one of the country’s most popular sites.
BARA KRISTINSDO­TTIR/THE NEW YORK TIMES PHOTOS The Skogafoss waterfall near Skogar, Iceland, one of the country’s most popular sites.
 ??  ?? A customer waits Oct. 10 at Bæjarins Beztu Pylsur, a popular hot dog stand in Reykjavik, Iceland, that drew long lines in less trying times.
A customer waits Oct. 10 at Bæjarins Beztu Pylsur, a popular hot dog stand in Reykjavik, Iceland, that drew long lines in less trying times.

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