Iceland has seven times more tourists than locals – but which country is most overrun with visitors?
With the country poised to welcome 2.3 million visitors by the end of this year, tourists in Iceland will soon exceed the national population by seven to one.
The meteoric rise of tourism in the small Nordic country has prompted the Icelandic government to consider introducing a series of measures to limit arrivals, including a imposing a "nature tax" on tourists to help preserve the country’s raw beauty.
With just 340,000 residents spread across a 40,000 square miles, Iceland has witnessed an exponential rise in the number of visitors in recent years, sparked by appearances of its otherworldly landscape in the ever-popular Game of Thrones television series and various Hollywood blockbuster films from Star Wars to Interstellar.
Since 2010 the number of tourists visiting has nearly quadrupled to around 1.8 million tourists, with the number of overnight stays at 7.8 million in 2016.
Last year, critics warned Iceland's capital, Reykjavik, was “becoming Disneyland”, as the number of US tourists alone (around 415,200) surpassed the country’s population.
The expanding industry, which is now Iceland’s second largest after its wholesale and retail sectors, has raised concerns over the sustainability of such rapid growth.
“This sector is maturing and becoming a real industry in Iceland, and with that of course come challenges that we need to be ready to tackle,” Thordis Kolbrun R. Gylfadottir, the country’s tourism minister told Bloomberg.
Top 10 destinations where tourists outnumber locals (2016)
- Andorra - 36.6 annual tourists per resident
- Macao - 25.6
- British Virgin Islands - 13.3
- Saint Maarten - 13.1
- Turks and Caicos Islands - 13
- Aruba - 10.5
- Northern Mariana Islands - 9.6
- Guam - 9.4
- Monaco - 8.7
- Palau - 6.4
Sedlabanki, the central bank of Iceland, warned of “the risk that accompanies continued rapid growth” and how it could be a “shock for the economy as a whole,” in its latest financial stability report in October.
In particular, the bank highlighted the strain that tourism has put on local housing, as “prices are still rising steeply” and “the surge in short-term private rentals is a major factor”, it warned.
Last year, authorities in Iceland attempted to clamp down on short-term rentals by proposing a business tax on those letting out their homes on Airbnb for more than 90 days a year.
But the property rental business in the country has shown no signs of slowing down, with new figures revealing earlier this year that the most prolific Airbnb landlord in Iceland had reportedly earned €1.9million in 12 months, with five individuals bringing in more than €790,000 in the same period.
“We need to map this out to see what we can do to make the tolerance higher. Sometimes it is about strengthening infrastructure, sometimes it can be about steering access to particular areas,” Gylfadottir said.
“The decisions we make will affect how this sector will evolve,” she added.
One of these could be to introduce a "nature pass" fee, which would be used to fund the preservation of Iceland’s natural resources, but “this is yet to be discussed and worked out”, according to the minister.
“We will probably never compete with the lowest priced destinations, but people need to experience that they are getting their money’s worth.”
Iceland is already one of the world’s most expensive countries, but earlier this year the government was considering increasing the existing hotel tax – which raised a reported 400 million króna (€3.19 million) in 2016 – forcing tour operators to purchase licenses and imposing limits on the number of People who can visit certain sites.
The government claimed money raised through any such initiatives would go towards improving infrastructure and facilities.
The world's most visited countries (2016)
- France - 82.6m annual visitors
- United States - 75.9m
- Spain - 75.6m
- China - 59.3m
- Italy - 52.4m
- United Kingdom - 35.8m
- Germany - 35.6m
- Mexico - 35m
- Thailand - 32.6m
- Turkey - 25.4m
“The sector and all of us have to be careful not to become victims of our own success,” the minister said earlier this year.
“Some areas are simply unable to facilitate one million visitors every year,” she said. “If we allow more people into areas like that, we’re losing what makes them special – unique pearls of nature that are a part of our image and of what we’re selling.”
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