95% compared to 57%

The recovery of the tourism industry in Iceland has progressed well after the setbacks of the global pandemic. Thus, tourism in Iceland has reached 95% of its former strength compared to 57% when looking at global tourism according to figures from the United Nations World Tourism Organization, one of the United Nations' specialized agencies. These are interesting numbers that we can be proud of.

The good performance of the tourism industry is very important as it is the sector that generates the most foreign currency for the national economy. The vigorous growth of the sector over the past decade has played a significant role in enabling the Central Bank to build a strong and unencumbered foreign exchange reserve, which now accounts for about 30% of GDP compared to around 5% of GDP in the years before the financial crisis of 2008. This strong position enhances the independence and capacity of monetary policy as well as allowing the authorities to pursue more targeted and efficient economic management, respond reliably to economic shocks, and contribute to stability for households and businesses in the country.

This robust rebound of the tourism sector this year does not happen by itself. Its prerequisite is the great foresight and perseverance of the tourism companies and their staff in good cooperation with the authorities throughout the pandemic. Time was well utilized as the authorities emphasized supporting people and businesses during the pandemic. Thus, it was possible to protect important knowledge of the companies and the infrastructure necessary to welcome a large number of tourists again. Similarly, significant investments in infrastructure were made, both in transportation and at tourist sites, so that they would be better prepared to receive more guests again. Furthermore, the government decided to allocate substantial amounts for marketing Iceland as a destination, with the marketing project "Together in Action" throughout the entire pandemic, despite little demand for travel at that time. One of my first actions as Minister of Tourism was to allocate 550 million ISK for increased marketing to create more opportunities for Icelandic tourism across the country, as indicators of key markets have never shown such a strong desire to travel to Iceland as now.

We live in times when various large and challenging issues confront us in global affairs. It has therefore never been more important than now to be vigilant and safeguard Icelandic interests in every respect and ensure continued progress in living standards based on a robust economy for the future.

Lilja Dögg Alfreðsdóttir, Minister of Tourism and Deputy Chair of the Progressive Party.

The article was first published on mbl.is on 6 October 2022.