Iceland's post-pandemic recovery is shaping up to be more diverse in lodging, activities and visitors.
Iceland has been attracting a new segment of tourists: ardent music fans. The new tourists reflect Iceland’s diversifying base of visitors as it moves on from the pandemic.
Umphrey’s McGee (pictured) in March 2022, Wilco in April, the Disco Biscuits in May and Pavement coming in July — each filling the concert hall and tourist attraction Harpa with over a thousand of their American fans willing to cross the Atlantic Ocean to see them. Fans will pay under $1,000 for a 3-day pass to watch their shows. The pass doesn’t include lodging.
Fans come for their band and then stay for the destination. “What we’ve seen is people stay a week or two after the show to really explore the country,” said Anna Krakovski Ferro, partner at Pilgrimage of Sound, which organizes music shows at destinations.
Not only do they explore, these fans are high spenders, said Business Iceland CEO Pétur Þ. Óskarsson. The new visitors hit on Business Iceland’s two objectives: attract tourists beyond the summer season and get people to explore the country beyond Reykjavik. “These are the tourists we want,” said Óskarsson.
Last year, the island had 1.7 million visitors, which is 73 percent of its 2 million total in 2019 and 85 percent of its peak level of 2.3 million in 2018. Tourists, however, spent more or as much as they did before the pandemic, said Sigríður Guðmundsdóttir, head of Visit Iceland. She expects this year or next will be a full return to its pre-pandemic visitation total.
During the pandemic, with the government’s support, the destination didn’t stop marketing. Export value from the tourism sector— a vital sector for Iceland— fell from ISK 470 billion ($3.4 billion) in 2019 to ISK 113 billion ($814 million) in 2020.
Between 2020 and 2022, Iceland invested around $50 million in marketing, said Óskarsson. “We had never invested more in marketing and communication than we did during the pandemic,” he said.
Out of the investments came eight campaigns to keep Iceland in the minds of the world. One of those campaigns was Visit Iceland’s “Let It Out” in summer 2020, which encouraged people to come to Iceland to let out their travel frustrations or share recordings of their screams to blast in the country.
The country’s destination marketing has had an impact on tour operators. “They’re a very creative tourism board,” said Jason Susinski, director of product for Kensington Tours. One that stuck with him was the 2021 Icelandverse campaign, which parodied the Metaverse launch at the time. The advertising reminded travelers that Iceland is a unique immersive experience that doesn’t require VR headsets. It won a Skift IDEA Award in the tourism category.
Opened to travel since June 2020, the country had very low Covid case count, making it attractive for people who still wanted to travel amid the lockdowns. “It was one of our only destinations we could effectively sell in 2020,” said Susinski.
Intrepid Travel operated more Iceland trips and for more customers in 2021 and 2022 than it did in 2019. Unlike other destinations, it had better control of case counts, said Zina Bencheikh, managing director of Intrepid’s Europe, Middle East and Asia region. “It was always open the right way,” said Bencheikh.
Its image as a nature-focused and adventure destination was a strong pull, she said. It benefited from the Skift megatrend of travelers seeking out of nature over urban experiences to avoid crowded areas during the pandemic. Remote Arctic destinations like Finnish Lapland, for example, got a strong visitor boost.
“They also have the benefit of being geographically unlike any other country on the planet,” said Susinski. “That will always attract people who are looking for that unique shot.”
Another important factor has been the historic stopover strategy of its flagship carrier, Icelandair. The airline is connected to multiple European destinations and lets travelers add a one to seven day stopover in Iceland at no extra charge on the way to their other destinations.
New accommodations are popping up outside of Reykjavik. New Geothermal baths have come into Eastern Iceland. Towns in Northern Iceland like Grenivik are seeing more high quality hotel investment to support heli-skiing visitors.
Tour operators are expanding their investment in the country. Intrepid Travel has expanded its premium brand product into the country that services higher spending travelers and provides them more comfort. Kensington Tours is looking at expanding its product offerings in terms of day tours, destinations within the island and expanding multi-country combos.
To make Iceland more affordable for the growing younger traveler segment, Intrepid Travel introduced a one week camping trip that takes them to less visited places like the national parks, which supports the Skift megatrend of young travelers seeking unique attractions and experiences.
Even though it’s the country that inspired the Skift concept of “overtourism” in 2016, tourism officials say it’s not so much of a problem now. “I don’t think overtourism is something we need to be worried about in Iceland,” said Óskarsson. It’s more a question of steering and managing the traffic.
Overtourism was a problem when Iceland had double digit visitor growth and didn’t have the infrastructure to service such fast growth, said Guðmundsdóttir. She said overtourism was also hyped up to an extent. The focus right now is to grow tourism in a sustainable way.
Iceland’s government infrastructure investments in attractions have gone a long way. Tectonic plates, one of Iceland’s most popular attractions, have added paths and bathroom facilities. “It would have been different 10 years ago,” he said.
CORRECTION: This was story was updated to clarify the year of the Umphrey’s concert and the cost of the three day pass for the Pilgrimage of Sound shows.
Photo credit: Photo Credit: Tara Gracer Tara Gracer