Words by

Parker Yamasaki

Watch the tour bus as a caricature of its passengers. It lugs ungracefully up Eiríksgata, heaves over the speed bumps, and arrives panting against the backside of Hallgrímskirkja. It leans right and spills its camera-clicking innards onto the sidewalk, or into the street, depending on how aware they are of life outside of the viewfinder. As unsightly as the gargantuan busses are, we’re happy that they exist—at least to keep the daily commuters on Strætó safe from the REI backpack swinging visitors with no apparent sense of spatial awareness. Welcome to the dichotomy of tourism. Its positives and negatives become more and more intertwined with every need that must be fulfilled. Each visitor to Iceland is not just a self-sustaining entity walking down the street. It’s another human to feed, to clothe, to transport, and notably, to shelter.

Enter the hotel industry. With the closure of such popular concert venues as Sirkus, Nasa and most recently Faktorý to make way for hotels, there is a lot of frustration floating around 101.

One popular reaction is to start pointing—blame the city, blame the hotels, blame the tourists themselves. But is collective frustration ever appeased by blame? And is acting out against “hotels” in general any more effective than trying to shut down the annoying little brother in the backseat of the car? So, what is really going on? Where do we look, where do we point? And why is this happening?

PRO-HO(TELS)
On a basic level, it’s a story of supply and demand. Páll Hjaltason, the city chair of the Environment and Planning Committee, says it would take an additional 250 new hotel rooms a year to match a steady 3% annual increase in overnight stays in hotels. In the past year, Iceland has witnessed a 15% increase. As of this year, tourism has become the second largest industry in Iceland, surpassed only by fishing. And according to a study by Arion bank, the number of incoming tourists is expected to increase threefold between now and 2015, threefold from the 727,000 visitors predicted to enter the country this year. Compare that to the mere 383,000 reported visitors less than a decade ago, in 2005, and it is clear that Iceland has to do some major adapting. And quickly.

So how did this happen? In the years leading up to the financial crash in 2008, tourism accounted for around 4.4–4.7% of Iceland’s total GDP. Iceland was considered a luxury travel destination. High costs and a relatively poor exchange rate deterred most who longed to visit Iceland—Sigur Rós’s tour-footage in ‘Heima’ would have to do. In 2008, when the banks went sliding down the slippery slope of economic collapse, they brought the value of the krona tumbling down with them. By September 2008, the króna had experienced a devastating depreciation by nearly 80%, and not quietly. With exchange rates now heavily favouring incoming foreign currency, the tourism industry began its voracious expansion. A year later, by 2009, tourism accounted for almost 6% of Iceland’s total GDP.

Since then it has only continued to grow at unprecedented rates. Between 2010 and 2011, the number of international visitors to Iceland jumped from 488,600 to 565,600, a 16.6% increase. The following year that increased again, by 18.9%, with 2012 seeing a record 672,000 international visitors.

In order for growth of this magnitude to occur, the hotel industry and tourism in general had to be responsive. “Tourism will continue to grow,” says Hildur Ómarsdóttir, the director of marketing for Icelandair Hotels, “but I will never take it for granted. It will continue to grow if we decide to make it grow by continuing to enhance and improve it. It is through massive marketing efforts that this industry continues to expand.”

The expansion isn’t just physical, it’s fiscal. “Tourism is a vital pillar of the Icelandic economy. In fact, it is probably what saved us from misery after the crash,” says Reykjavík Economics Managing Director Magnús Árni Skúlason. Magnús emphasises the benefits of tourism to underdeveloped areas in the downtown region. He notes the potential of tourism to rejuvenate areas like Hverfisgata and upper Laugavegur. “Upper Laugavegur is not in a good state,” Magnús says, “we saw great shops like Atmo, a concept store for Icelandic designers, that were not able to survive recently, even on the main street in the main shopping district in Reykjavík.” Tourists will help these businesses survive the dark winter days by flooding them with capital during the summer, Magnús argues.

HEALTHY GROWTH
On August 9, the city released its newly updated Reykjavík Municipal Plan, which calls for a concentration of hotel development in the above mentioned Hlemmur area. The plan is a total revision of the former government’s Municipal Plan for 2001–2024, shifting the focus from expanding outward into unused peripheral areas around Reykjavík to developing within the city’s current limits. In fact, it is the first master plan for the city that does not propose new suburban areas at the outskirts of the city and if it is carried out, more than 90% of all new residential units until 2030 will be built in the current urban centre.

The benefit of this approach, Páll Hjaltason says, is that it allows the city to focus on maintaining infrastructure that already exists within its municipalities rather than on the construction of new areas to maintain. It also cuts down on traffic, as residents and services alike will be more centrally located.

The hotel industry also contributes, most ironically, to the preservation of important cultural and historical sites, says Hildur Ómarsdóttir, the director of sales and marketing for Icelandair Hotels. “It is very easy to pick on and see the negative side of change. People tend to do this without necessarily looking at what they are trying to preserve,” Hildur says in regard to Icelandair’s approved plans to build a 142-room hotel in the block containing beloved cultural gems such as the Heart Park and Faktorý. “To build up the culture we must take what we have and enhance it,” she says. “I don’t see how we can preserve if we don’t invest in the infrastructure to maintain, further develop, enhance, and improve.”

The future Icelandair Hotel will refurbish existing structures to house its guests—maintaining, at the least, an aesthetic of old-town charm. “I think it’s a beautiful thing that we can open up to cultures from all over the world,” Hildur says, “we should welcome the fact the people want to come here, that the streets can be more colourful, and the culture more rich.”

That said, there is a dominating concern over the more literal loss of colour, with the closure of vibrant cultural hubs like Heart Park and Faktorý. Granted, destruction is not an evil in itself. More often than not, destruction breeds creation. Like a flower garden, one has to uproot the old grass and weeds, dig the garden, and turn the soil before the new seeds can be planted. But productivity takes space, and it takes time. The problem with the hotel industry is that it digs up places with established creative foundations and replaces them with an industry based on flux, on temporary inhabitants. Without a chance to establish itself, the creative capacity of the space stagnates. It’s like somebody is digging a hole for fresh new crop of flowers to bloom, and then filling it with cement.

BEYOND THE BOARD ROOM
Arnar Fells Gunnarsson is one third of the managing team at Faktorý, a staple of Icelandic music venues that was recently shut down because of its location on the Heart Park property. He emphasises that his complaints are not directed against the building of hotels, but at the way the city is going about doing it. “I’m not against changing and building up of a city; that is a normal thing,” Arnar says, “but I don’t think it’s a good idea to put all of the hotels in dead centre downtown at the cost of culture.” Arnar is not the first to point out questionable actions of the city regarding recent hotel approvals.

Over the past decade, the Heart Park property has changed hands from private groups, to banks, to individuals. Each unique owner had a unique agenda. Before the 2007 economic crash, proposals to turn the beloved garden into a seven-storey shopping mall in the heart of downtown had been set into motion. When the crash came in 2007, the massive project could no longer be properly funded, and the property itself was turned over to the hands of Landsbanki bank. Last year, the bank decided that it was done sitting on the property; it was time to cash out.

With the skeletons of overly-ambitious development projects like the office towers at Borgatún looming over Reykjavík, the newly elected Best Party was hesitant to hand the large chunk of property over to any single investor. So it seemed, anyway. They announced that the prime property would be divided up amongst a number of individual investors to prevent the development of creating Borgatún-like creatures in the central city. The City even ran an ad in the local paper with the property divided, encouraging investors to start laying their claims.

When the property was in fact turned over, however, the dispersal effort was quietly abandoned. In the end, the City sold the property in its entirety, paving the way for Icelandair to plop a hotel on the pristine lot. When that transaction was announced, Arnar recalls feeling surprised that, well, nobody seemed surprised.

WHO DO YOU WORK FOR
When it comes to private ownership of publicly used lands, the city can only do so much within their own limits. “I am a bit surprised to see this development approved by the current government”, Arnar says, “but I understand that they are caught between a rock and a hard place. This has been sort of an ‘ugly spot’ here and people have always wanted to fix it up. Of course you can come and fix it up,” he says, “but we don’t need a five-storey hotel to do it.”

Icelandic pop star Páll Óskar is a little less forgiving than Arnar in his reaction to the city’s responsiveness to public outcries. Páll is among the sceptics who question whether or not the city has really done all that it can do in regard to preserving these important public areas. “It’s like it doesn’t matter to the City. If 18,000 people protest the hotel on this very spot, it doesn’t matter. If 3,000 people show up in protest at Austurvöllur, if almost 300 Icelandic musicians protest that Nasa going under, it doesn’t matter. And even with all of the fierce articles that have been written in the media, it doesn’t matter. That to me is what’s most devastating, that all of these voices will be swept aside. Hotel it will be.”

Advocates against the closure of music venues such as Nasa worry that the city is taking for granted the culture that draws the tourists here in the first place. According to an April 2013 report by the Icelandic Tourist Board, 40% of visitors cited “culture and/or history” as the most influential reason for their visit to Iceland. “That forty percent comes here for the musicians,” Páll Óskar elaborates, “not the movies, not the writers, they come for the music. Isn’t it peculiar to close down concert venues like Nasa and Faktorý to make room for a hotel for those very same tourists to stay in?”

One of the possible measures within the hands of government is to convince property owners to commit pieces of their land to the National Heritage Homes Association, as was the case with the Nasa building and the yellow house where Café Stofan now sits. But although the structures will be preserved, the culture that occupies them today and in the past cannot.

TARGETING THE ARTS
It would be naive of the economist, the builder, or the city planner, to assume that the entire realm of human experience that these spaces like Nasa and Heart Park have offered can be boiled down to monetary units. Because one private owner made a payment to another private owner, they now control not only the physical land in question, but also everything that the land currently contains. Heart Park and Nasa serve only as two outspoken representatives of a greater collective of artists and creative industries that have been displaced by the “adaptation” of the city.

It is the nomadic characteristic of the arts and music scenes that makes them resilient, and at the same time renders them vulnerable. “I think the attitude toward musicians in Iceland has generally been ‘do-it-yourself, take care of your own shit,'” Páll Óskar reflects. “The same discussion comes up again and again—’why don’t you get a job’—indicating that being an artist is not a job. As Iceland was originally a fisher’s and a farmer’s society, anything that was not fishing or farming was not considered a job. So the thinking has deep roots.”

Einar Örn, the current chair for the Department of Culture and Tourism of the Best Party, doesn’t agree. “I’m not worried about the health of the Icelandic music scene,” says Einar, who is also a founding member of The Sugarcubes and one half of the experimental electronic duo Ghostigital. “Musicians are a historically resilient, nomadic lot. Icelandic music will not be crushed by the hotel industry. Nasa has been closed for a year and a half, Sirkus for even longer, but the scene is just as healthy as ever. There will always be somewhere to play.”

“To tie inspiration to a certain place is wrong,” Einar elaborates, “it’s the people, not the buildings, that do the creating. Spaces are to be reused. Find something else,” he says, encouraging the artists displaced by the recent closure of Faktorý to be creative. “Be what you claim everybody is saying that we are killing,” he says. “Take on the devil, make it better.”

In the meantime, artists around Reykjavík are not standing around.
Creative work continues within the confines of 101 Reykjavík, as buildings are emptied in slow anticipation of being turned into hotels. Bands like Reykjavík!, Retro Stefson, FM Belfast, Borko, Agent Fresco, and Ólöf Arnalds have seized the uncertainty in city planning and of construction as an opportunity to run artist collectives, hold rehearsal spaces, and even throw impromptu concerts while the structures sit in limbo.

RUNNING ON EMPTY
Regardless, whether or not the health of a scene is dependent on the venues that house it, the individuals that operate those venues, the bands who grow mutually with the venues, and the people that generate the scene should not be disregarded as just another cohesive and resilient entity. “Of course he [Einar] is right, nothing lasts forever,” Arnar agrees, “places come and go, but that does not justify the hotels coming in here downtown and wiping us out.”

“I’m really going to miss it,” Arnar says regretfully from behind the bar of Faktorý on one of its final days. “These three years have been unbelievable. It’s been a really crazy ride, We got to know so many good people—the bands, the staff, everybody.” Unfortunately, because of approval of the hotel plans, the Faktorý dynamic as we know it becomes a thing of the past. Arnar admits he does not plan on continuing Faktorý without the Faktorý house. “This house is just totally perfect for it. I would never move Faktorý to a lesser house because people would just constantly compare the two,” he explains. “It was a shithole when we got it and we have been fixing it for three years—installing the toilets, expanding the stage, opening up the side room for musicians—and it’s so weird to think finally when we got the house just as we wanted, finally when it is ready, we have to leave it.”

Einar may be right that it would be a mistake to tie creativity to a single, physical space, but one would be just as mistaken to disregard the work of the individuals that goes into making these spaces available. Not to mention, there is a value in having a space to collectivise and thus branch outward from into other creative endeavours.

In the end, it’s not a matter of evil hotels versus poor, helpless artists. It’s a matter of supply and demand, and the responsive cry for explicit long-term, contextual planning. Musical and youth cultures are historically nomadic. It’s part of what makes the scene, the scene. That said, we cannot take its existence for granted. The presence of such venues and cultural landmarks are assets to the tourism industry, and more importantly, are valuable in themselves. But we should keep in mind the ghosts of optimistic development that now linger, uninhabited and unsightly on the outskirts of Reykjavík, those construction projects that were never occupied, or never completed in the first place.

Eager optimism in any industry is like a disease with late blooming symptoms. You only recognise it after it is too late to do anything about it. In order to thrive, the City of Reykjavík must proceed with caution, think bigger-picture while still crediting the individual—think contextually—and learns to evaluate things in non-monetary measurements.