When Torfi G. Yngvason started working at a river rafting company in 2001, Iceland was host to 300.000 tourists annually—compared to 540.000 today—and hardly any of them were going rafting.
“There’s been a huge increase in tourists since I started, but the main thing is that these 300.000 people were different than the folks we see today,” Torfi tells me. “The big change happened when the budget airlines, like Iceland Express, started flying to Iceland and putting pressure on Icelandair’s monopoly. That’s when we got a new target market. We kind of got our people to Iceland.”
Torfi is talking about the younger and more adventurous tourist that he has spent the last seven years catering to—from offering tonnes of action packed tours though Arctic Adventures to bringing downtown Reykjavík its first hostel.
In 2005, Torfi and his friend Jón Heiðar Andrésson were working at different rafting companies when they decided to buy and merge them into a single company. “So rafting was the big ticket when we started and it’s still kind of one of the big tickets,” Torfi tells me.
In fact, they are still taking people rafting on Hvítá River from the same base that one of the companies they bought had been using since 1983.
“You could say that in our early years we were mainly selling rafting to Icelanders,” Torfi says. Rafting is one of the few tours that Icelanders go on. Forty percent of rafters are Icelanders, and since 1983, they’ve taken 150.000 Icelanders, which is roughly half of today’s population.
Torfi and Jón Heiðar used this credibility in rafting as a launch pad to create the ultimate adventure company, which now offers more than 136 different tours. Arctic Adventures was the first to offer many of these tours—like snorkelling Silfra and rock climbing—and it is still the only company offering other tours—like sea kayaking out of Reykjavík.
It is Torfi’s job to dream up the tours. When they issued their first brochure in 2005, Torfi says the tours reflected their own talents and interests. “We looked at ourselves and the crew that we hired and someone said, ‘I’m a pretty good sea kayaker, can we put that tour in there.’ Someone else said, ‘I’m interested in diving, can we put a diving tour in there.’ So we made the brochure based on talents that were available and things we thought were interesting,” Torfi says.
When they started there were few requirements from the State. “We were running tours that you would need ten years of experience in New Zealand and this and this many tours under supervision,” he says. “It was like the Wild West and in many ways it’s still like that. When we started we just did anything that caught our fancy.”
Torfi says their growing pains had nothing to do with selling the tours, though it wasn’t always smooth sailing. After returning from a world tour in 2005, Torfi had seen that there were always two things you could do in any city: a bike tour and a walking tour.
“I thought it was a shoe in,” he says. So they created a biking tour called, ‘Reykjavík on wheels,’ and bought all the bikes and helmets, which he says was one of the biggest investments in their early years, and they created a walking tour called, ‘Reykjavík Panoramic,’ which was a hike up Esja mountain.
“We printed these tours in our brochure, 50.000 copies, and I’m not exaggerating, we didn’t sell a single bike or mountain hiking tour in the first year,” Torfi says.
“In the second year we didn’t sell any bike tours, but we got some people to go hiking. By the third year, we had taken 200 people on the hike and nobody had made it to the top except one Argentinean couple. They had purchased the cheapest tour from Arctic Rafting—we were still called Arctic Rafting at the time—and that was the Esja tour, the hike. They went all the way to the top because they thought they were hiking to the boats and would have to raft down again. They were the only clients to make it to the top and then we took the tours off the brochure.”
Torfi says the market just hadn’t taken the leap in 2008. “We were a bit ahead of our time with something that was very established elsewhere,” he says. “Now there are more people coming to Iceland—more active, young people that might have gone to a cheaper destination to do these activities.”
Torfi was twenty years old when he became CEO of the company, and he says their growing pains mostly involved growing up and learning to be disciplined in running the company, which grew from seven employees to 127 in just seven seasons. “It was growing up in a company that grew faster than you,” he says.
During the first few years, they would simply close the office when the summer season was over. “You guided in May, June, July, August, and September. Then you put bindings on snowboards in October, November and December, and a bit into January,” Torfi says, “and then you explore the world from January until May—spend the season skiing in the Alps or kayak or climbing in Asia.”
Torfi says they knew how to guide, which parts of Iceland we wanted to show, and what they wanted to do, but they had to learn the business aspect of running the company, going from something that was just for fun to an enterprise with lots of people counting on them for jobs and salaries.
“We’re still learning—learning about finances, human resources—stuff that we didn’t know anything about,” he says, “but I don’t think you can start an Adventure company any other way. You have to start with that, and then learn the boring stuff.”
Arctic Adventures now has bureaus in four foreign countries, a hostel and an outdoors store in Reykjavík, and they are expanding around the country with hubs all over Iceland. They are in the process of building Akureyri’s first hostel: Akureyri Backpackers.
He says Arctic Adventures plans to continue growing their day tour and activity business, but to focus on expanding tourism outside of the 100-kilometre radius around Reykjavík. For instance, they are focusing a lot on Skaftafell, which is Europe’s largest national park and contains Vatnajökull, which is also Europe’s largest glacier.
Believing that most people come to visit Iceland rather than Reykjavík, Torfi says the biggest problem that the tourism industry is facing is a lack of infrastructure outside of Reykjavík.
“Tourism is growing around Reykjavík, but the countryside is sold out,” he says. “Infrastructure and accommodation is not being built at the same speed as in Reykjavík. We need to more beds, restaurants, pathways, and toilets.”
This brings us to the topic of how to accommodate for the ever-growing number of tourists coming to Iceland and wanting to see its unspoiled nature. It has long been debated whether Iceland should start charging entrance to its popular natural attractions.
“We’re not going to become Bhutan, with its quota on tourists,” he says. “We have to face the fact that we live in Europe and we have an agreement that people can come here, and that they are one of our biggest sources of revenue.”
Thus, Torfi believes that Iceland should focus its efforts on developing the country’s tourism industry. “If you like things to be really rustic, some things will change, but this is still the way that will have the least economic impact. If we’re going to match the forecasted 12 percent growth in tourism revenue with aluminium smelters, we are going to have to build one every year, and aluminium smelters come with power plants,” he says.
“It’s a question of which you prefer—pathways in Skaftafell and ropes at Gullfoss or another aluminium smelter? You have to think of it in these terms. This has miniscule environmental impact. We can make money from Iceland as it is today by wrapping it up in a way that people don’t ruin it when they visit.”.