The COVID-19 pandemic and consequent international travel restrictions have had a devastating impact on Iceland’s large tourism sector, a fact recent data published by Statistics Iceland throws into sharp relief.
The number of passengers arriving at Keflavik Airport this June fell by 96%, from 259,000 to 11,000, despite efforts to re-open Iceland’s borders. The number of aircraft arriving and departing from the airport also decreased by 53%.
Hotels have suffered particularly badly from the fall in air passengers. When compared to 2019 figures, overnight stays in hotels decreased by 79% in June and 87% in May. In fact, 47 hotels closed in May, reducing room supply by over a quarter. It is unclear how many of these closures are permanent.
The first indicators of the economic impact of the pandemic were also included in Statistic Iceland’s data release. In the first quarter of the year, before travel restrictions fully took hold, revenue from non-Icelandic tourists fell by 28% in comparison to 2019. VAT turnover in this period also fell by 10%.
As early as February, the number of employees working in tourism was 9% lower than in 2019. The largest reduction was in employment numbers was amongst those working in passenger flight services, which fell by 25%. It’s worth noting that the number of tourism employees also fell between 2018 and 2019, so not all the job losses can be definitively attributed to the pandemic.
As reported, Iceland is bracing itself for a major COVID-19 recession which the tourism industry is likely to bear the brunt of in the short term.
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