Icelandic hotel industry eyes long-term growth despite tourism downturn

Despite a downturn in the tourism sector, there are ambitious plans for hotel developments across Iceland. The executive director of the Icelandic Travel Industry Association has stated that these investments are aimed at the long term. Hotel owners are currently experiencing the effects of this downturn.

Recent months have seen a decline in tourism, with travelers seeking alternatives due to high prices. There has been a decrease in passenger numbers with Icelandair and fewer overnight stays reported. Nevertheless, new hotels have opened in various locations, including at Reynisfjara near Jökulsárlón, in the Kerlingarfjöll highlands, and plans are underway for a luxury hotel in Grenivík in Eyjafjörður. Construction has also begun on a hotel at the site of the former television station on Laugarvegur, with several projects across the country in the pipeline.

Jóhannes Þór Skúlason from the Travel Industry Association highlighted that hotel investments are structured for the long term. He emphasized that it’s impractical to consider the market fluctuations over short periods when making such decisions. Instead, the focus should be on the potential long-term development of the industry.

Hjörtur Gíslason, a member of the board for the hotel and hospitality association, echoed this sentiment, stating that hotel owners must think beyond seasonal trends. While he acknowledged the current downturn, he noted that fluctuations are an inherent part of the industry. To weather these fluctuations effectively, it is crucial for companies to be financially robust. He affirmed that the situation is indeed pressing but that the long-term outlook remains positive.