How Iceland Is Managing Its Sudden Tourism Boom

“People view Iceland as a digital detox, a place to get away from the stresses of city life and reconnect with nature, and that’s really been influencing the growth,” said Fergal McGivney, travel analyst at Mintel.

The new challenge for marketers is ensuring that Iceland doesn’t become a victim of its own success. To manage the influx of tourists, Iceland’s tourism minister has proposed a tourist tax and adding more direct flights to Akureyri, the country’s second largest city, to divert traffic away from the capital Reykjavik in the south.

“Growth has been so rapid in the last five years that it’s difficult to keep up,” explained Hjalti Thorarinsson, project manager at Visit North Iceland. “Iceland has never been a cheap destination, so you can add taxes, but you don’t want things to get too expensive. And if everybody didn’t land in the same city, it would help us better distribute the flow of tourists and accommodate more people.”

Iceland’s national and regional tourism boards have also created marketing campaigns to promote lesser known regions and cultural experiences.

“There are parts of Iceland where you won’t run into anyone,” said Visit Reykjanes manager Thuridur Aradottir Braun. Reykjanes, the southern peninsula that’s home to the Blue Lagoon, relies primarily on social media to promote its natural attractions. “It’s about building up less-known sites to relieve the pressure from other sites,” Braun added.

In 2015, national board Promote Iceland launched “Ask Guðmundur,” a campaign in which seven locals named Guðmundur or Guðmunda (one of the most popular names in Iceland), each from a different region of Iceland, acted as “human search engines,” answering travelers’ questions on social media and in quirky video tutorials.

“It was about inspiring people to visit different regions of Iceland,” said Dadi Gudjonsson, manager at Promote Iceland. “The year after [the campaign ran], we saw a huge growth in regions outside of the south and southwest which typically get more tourist traffic,” he said.

This year, Promote Iceland launched Iceland Academy, a video series hosted by locals that teaches tourists how to navigate unique experiences (with primers like “How to Avoid Hot Tub Awkwardness” and “How to Eat Like an Icelander”), history (“A Beginner’s Guide to Icelandic Sagas”) and obscure destinations (“How to Travel Further in Iceland”).

“Nature is the biggest reason people come to Iceland, but we’re also seeing more interest in history and culture,” Gudjonsson explained. “Travelers want to interact with locals, so this gives them a better understanding of Iceland’s way of life.”

Fifty-two percent of overnight stays in Iceland in 2015 were during summer, compared to 22 percent during winter, so driving more winter tourism is another top goal. Visit North Iceland focuses on promoting winter activities like skiing, sledding and snowmobiling, enlisting Instagram influencers to post photos that go viral.

“That content is the best publicity—people can actually see how unique the landscape is,” Thorarinsson said. “Nature is the No. 1 reason why people travel to Iceland. It kind of promotes itself.”

With more budget airlines like WOW offering flights to Iceland from the U.S. and Canada, as well as stopovers in Iceland for European travelers headed to North America, Mintel’s McGivney expects Iceland’s tourism growth to continue.

“It’s hard to know if there will be a tourism bust,” he said. “It depends on geopolitical and economic factors, which are pretty hard to predict. However, it doesn’t look like tourism to Iceland will slow anytime soon.”

Infographic: Carlos Monteiro