Are Price Increases in Iceland Unavoidable?
Iceland is experiencing an economic renaissance of sorts as it rebounds from its 2008-2011 financial crisis: the GDP is growing at a rate of 10 percent annually, unemployment is under 3 percent, wages are up, and in 2016 the Icelandic króna rose for the fourth straight year, gaining 16 percent against the euro.
This is good news for Iceland, but what does it mean for travelers? Are price increases in Iceland unavoidable?
Jennifer Bruck and Nicole Sullivan from Holbrook’s operations team recently attended the Icelandair Mid-Atlantic Tradeshow in Reykjavík, where they met with dozens of travel vendors, spent several days exploring southwestern Iceland, and saw firsthand the effects of Iceland’s economic bounceback.
The Nordic island nation continues to be a popular destination, and tourism has been an integral factor in its financial recovery. In 2016, international arrivals increased by 40 percent from the year before, compared with Europe’s 2 percent growth. Jennifer and Nicole found that in many instances, hotel prices are rising, as are the costs of guide and driver services. One hotel they visited is already booked through summer of 2018, and they found that the gap is closing between the traditional “high” and “low” seasons; Iceland is quickly becoming a year-round destination.
But that doesn’t necessarily mean Iceland is beyond reach for the average traveler. Jennifer says price increases are not completely unavoidable if travelers are willing to get creative; being willing to use guesthouses with shared bathrooms, make picnic lunches, or have 1-2 course meals instead of 2-3 course meals will help travelers cut costs. Cheaper flight options from new low cost carriers can also help offset increases elsewhere.
Another option is to consider less-visited path sights. “þórsmörk is an amazing experience to get a little out of your comfort zone,” says Jennifer. “It’s secluded and doesn’t have much in the way of regular life distractions.” Kerstin Elisabet Andersson from Iceland Travel also recommends the West Fjords and the North East corner.
Price increases notwithstanding, travelers also benefit from these changes. “The economic growth has really helped the country as a whole,” Jennifer says. “One example would be that country hotels are able to grow, and can afford to build staff housing which helps keep turnover down. The infrastructure is in place and I got the impression tourism runs pretty smoothly.”