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Icelanders’ zest for travel offsets a strong autumn tourism season

This year’s autumn tourism season has been broadly similar in scale to that in 2019, and the resurrection of the tourism industry has exceeded expectations. But Icelanders’ famed zest for travel has also hit a historical high this autumn. Never before have so many Icelandic nationals travelled abroad in a single month as they did this October.

Nearly 159,000 foreign nationals departed the country via Keflavík Airport in October, according to new figures from the Icelandic Tourist Board. That brings the month virtually alongside October 2019 in terms of visitor numbers, and up to roughly 80% of the total for the same month in 2018, which was the busiest October on record.

As in the recent past, visitors from the US were the largest nationality group to come to the country. About one-third of all October visitors came from the US, followed by tourists from the UK (16%), Germany (6%), Poland (5%), Denmark (4%), and Italy (3%).

Tourist numbers set to top 1.7 million this year

Nearly 1.5 million foreign nationals have visited Iceland in 2022 to date, and it goes without saying that the difference relative to 2020 and 2021 is like day and night. For instance, this year’s ten-month total is three times the total for the same period last year, even though many tourists took advantage of the temporary lull in cross-border travel restrictions in summer 2021 and came to Iceland.

In this regard, the Icelandic tourism industry has gained a better post-pandemic footing than many others have. According to the UN World Tourism Organization (UNWTO), travel during the first seven months of 2022 was a scant 60% of the pre-pandemic level. For Iceland, the seven-month total was 77% of the pre-pandemic figure, and for the ten-month period it was 84%.

In our macroeconomic forecast, published in late September, we projected that 1.7 million tourists would visit Iceland this year. As the chart shows, the past few months have been well in line with that forecast – outperforming it, if anything – making it quite likely that this year’s total will be above rather than below 1.7 million. But there are no guarantees, as the economic outlook has deteriorated markedly for many of Iceland’s main trading partners. Prospects are particularly uncertain for the UK, a source of highly valuable winter tourists, as it is not a given that they will visit Iceland is such large numbers this winter. We discussed this uncertainty and the importance of British visitors for winter tourism in Iceland just recently.

Record-breaking exodus in October

Trading partner countries have not been the only ones to take advantage of flights to and from Iceland in the recent past. Icelandic nationals have been itching to travel ever since the pandemic tapered off, and this October was no exception. Nearly 72,000 Icelanders departed via Keflavík Airport during the month, making it the busiest single month for Icelandic nationals’ overseas travel in the history of Icelandic Tourist Board data. This means that one of every five Icelanders left the country in October, although naturally, it is quite possible that some people travelled abroad more than once during the month.

The Central Bank (CBI) is due to publish payment card turnover data for October within the next few days. It will be interesting to see how overseas turnover has developed in the past few months. As the chart indicates, it has been growing apace recently, and in Q1-Q3/2022 it was one-third higher in ISK terms than in the same period of 2019. But this figure is not due solely to a surge in Icelanders’ legendary wanderlust, as shopping with foreign online merchants has also been growing by leaps and bounds. It is just as well, then, that this winter’s tourist season should prove a bountiful one, in order to offset both overseas travel and unfavourable developments in other external trade, which we covered in another recent analysis .


Jón Bjarki Bentsson

Chief economist