1.7 billion in tourism revenue per day

The Tourism Week is currently underway, with the aim of raising awareness about the importance of tourism and enhancing cooperation and professionalism in the sector with an informative and entertaining programme. Icelandic tourism has grown remarkably since the beginning of the last decade. The number of foreign tourists has increased from nearly 460 thousand in 2010 to over 2.2 million last year. The tourism sector has been regaining its strength after the setbacks of recent years. Last year was the second-largest year for tourism in this country, while the largest was in 2018, when over 2.3 million visitors came to the country. At the same time, the tourism sector has become a vital pillar of the Icelandic economy, creating the most foreign currency income. In 2022, the sector generated 448 billion in foreign currency earnings, while the total consumption of domestic and foreign tourists in the country that same year amounted to 635 billion ISK, resulting in about 1.7 billion in daily revenue, with both groups having grown significantly.

The significant flow of foreign currency generated by the tourism sector matters little in an open economy like ours. It supports the króna's exchange rate and contributes to lower inflation than otherwise would occur, while also serving as a safety net in case of large and unforeseen shocks that could have negative impacts on currency earnings. The balance of payments of the national economy transformed with the arrival and growth of the tourism sector, creating a steady stream of foreign currency earnings, well over one billion ISK each day. This can be seen, among other things, in the status of the Central Bank's foreign exchange reserves and the growing assets of pension funds abroad.

Similarly, the tourism sector has improved living conditions across the entire country, representing the largest spontaneous housing initiative in Iceland's history. Higher employment rates around the country, along with greatly increased availability of services in entertainment, accommodation, food and drink, or access to natural wonders, is something that residents of the country as well as foreign guests benefit from. Certainly, the rapid growth in the number of foreign tourists has been accompanied by growing pains in previous years. However, a great deal has been achieved in recent years in building the necessary infrastructure to accommodate this increased number.

Numerous initiatives are in place to improve in these areas to promote sustainable growth. In the Ministry of Culture and Business, work is underway to create a new tourism policy for the year 2030 along with an action plan. The main objective is for Icelandic tourism to lead in sustainable development based on economic and social balance. This means that the tourism sector should be profitable and competitive in harmony with the land and the people. We want to strengthen the framework of tourism and create better conditions for it to grow and thrive in line with the aforementioned vision for the future. The Tourism Week is indeed a good testament to the achievements, vitality, and resilience that characterise Icelandic tourism. I congratulate the sector on the week and look forward to discovering all the diversity that tourism has to offer at the Tourism Summit taking place in Kópavogur today.

Lilja Dögg Alfreðsdóttir, Minister of Culture and Business and Vice Chairman of the Progressive Party.

The article was first published in Morgunblaðið on January 18, 2024.