Hospitality in Iceland – Lucrative opportunities for investors

Tourism in Iceland is mainly fuelled by American tourists and is the biggest generator of hard currency and export growth in Iceland. In recent years, Iceland has seen double-digit growth figures, but tourism growth has recently reached a sustainable level, which is favourable for investors. As the market cools down, investors have the opportunity to avoid the risk of an overheated market. As the tourism infrastructure is ready and Iceland has more experience in the hospitality industry, the country is more than ready for the next wave of tourists.

Moderate growth is much more manageable as it reduces the risk of infrastructure delays, overcrowding and intolerance among locals. The krona exchange rate is expected to contribute to moderate tourism. If the krona appreciates, tourism will regulate as Iceland becomes a more expensive destination. If this appreciation discourages tourists from visiting the island nation, the demand response will limit the potential for appreciation and keep tourism at a sustainable level.

The Icelandic hotel industry consists of a mixture of independent and chain hotels. There are over 150 hotels in Iceland, the majority of which are located in the capital. Despite significant investment in recent years, new construction has not kept pace with the rapid increase in tourism. The hotel sector has seen the most investment activity in the hospitality industry, with American investors looking to acquire stakes in a number of hotel chains.

There is a wealth of opportunities in this island state as far as the hospitality industry is concerned. Strong political and business support, public-private partnerships and an emphasis on sustainable development make Icelandic tourism a key sector for investment. Iceland is located between two of the world’s strongest markets, North America and Europe, and is easily accessible from several airports. As tourism in Iceland continues to grow, the country has gradually developed into a year-round destination, with visitors travelling from all over the world.

The hotel industry remains strong in Iceland despite cheap accommodation such as Airbnb. Despite a decline in visitor numbers in 2019, Icelandic hotels were able to report a record number of overnight stays. The Icelandic capital Reykjavik recorded high daily rates, high revenue per available room and a high occupancy rate compared to other Nordic capitals.

Iceland’s emphasis on quality over quantity and its commitment to sustainable development and targeted marketing means that the country continues to attract visitors with above-average incomes. The United States and China are expanding markets, while Europe and the UK have always been a core market. The focus on sustainable development in harmony with nature and the locals offers tourists a unique experience. Swapp Agency can offer you insights into the inner workings of the Icelandic travel and hospitality industry and secure you reputable connections in the industry. The Icelandic hotel and catering industry is expanding cautiously and the potential for investment is great.