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Iceland tourism September 2010

If the chart to the right shows a different end date from this report header, the chart is missing or you get a file not found message, a more recent update is available.

In September 2010, the total number of overnight stays in hotels was 111,200, while at the same time in 2009 it was 121,200. The total number of overnight stays decreased in all regions except in the Southwest region, West region and the Westfjords. Overnight stays in the East region decreased by 19%, in the South region by 18%, in the Capital area and the North region by 8%. In the Southwest region, West region and the Westfjords overnight stays increased by 12% compared to September 2009.” Statistics Iceland

Chart 1: The arrivals to overnights ratio stands at 50.3% which is less that prior month but higher than same month last year. Foreign arrivals to total measures 74.1% which is lower than prior month and same month last year. Foreign overnights to total measures 77.6% which is also lower than prior month and same month last year.

Chart 2: September 2010, foreign arrivals are down-9.8% between months and overnights by -12.4%. Domestic arrivals are up +12.5% and overnights -9.9%. Total arrivals are down -5.0% and overnights -8.2%.

Chart 3: On a 12-month average basis, foreign arrivals are down -8.2% from September 2009 and overnights by -2.9%. The 12-month average figures have been negative since May 2010 which is not good for Icelandic tourism.

Chart 4: The 12-month average foreign arrivals and overnights rates negative while total arrivals and overnights trend upward. There is a real risk that this trend will turn which makes investment in Icelandic tourism such as hotels and services risky. The world is still recovering from the near-collapse of the credit markets and with less residual income reported in the EU and US, higher unemployment rates and increasing fuel prices, this situation can well be expected to take a turn for the worse. Building hotels in Iceland at this time is inadvisable as the investment is unlikely to pay off in the next 5 years. Naturally this depends on terms and other variables; property suitable for hotels abound in the market right now at bargain prices. Once turnaround occurs, these investments may yield high returns and strengthen the balance sheets. Lower interest rates furthermore support such an investment decision.

Chart 5: There is a significant drop in domestic and non-european tourist overnights whereas the weight of Europeans increases both when compared to prior month and same month prior year. This suggests that the Inspired by Iceland campaign did indeed have effect.

Chart 6: On 12-month average basis, Denmark overnights to total increases from 4.9% to 5.0% and Germany from 12.4% to 12.5%. Sweden decreases from 4.8% to 4.6%, Norway from 5.6% to 5.5%, and UK from 15.1% to 14.8%.

Share of foreign tourist overnights

The chart shows changes in foreign tourist overnights based on 12-month country-weighted moving averages. This can be used to measure the effectiveness of marketing activities directed toward attracting foreign tourists to Iceland.

The change in the 12-month rate compared to same month prior year measures +1.2% for Denmark, -15.5% for Sweden, +3.5% for Norway, -4.7% for the UK and +16.3% for Germany. Total change (the sum of the change rate divided by total countries) measures -4.5%.

Here it is proper to point out a peculiar phenomenon. May – December 2005, overall 12-month change in foreign tourist overnights is negative. The same takes place July 2007 – May 2008 and October 2009 – April 2010.


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