How Tourism in Iceland Has Evolved Over the Last Decade—and Where It's Headed Next
Over the last decade, Iceland has transformed from a niche travel destination into one of the most sought-after tourist hotspots in the world. The combination of breathtaking landscapes, increased global accessibility, and savvy marketing campaigns has turned the Land of Fire and Ice into a bucket-list favorite. However, with this rapid growth have come challenges and shifts in the industry. Today, as the country moves toward a more sustainable and balanced approach to tourism, it’s clear that the next decade will look different from the last.
The Rise of Icelandic Tourism (2013–2019)
Tourism in Iceland skyrocketed in the 2010s, largely fueled by a perfect storm of factors. The 2010 eruption of Eyjafjallajökull, while initially a disruptive force, put Iceland in the global spotlight. Soon after, airlines like WOW Air and Icelandair capitalized on the interest by offering affordable stopover programs, making Iceland an attractive layover destination between North America and Europe. Social media, particularly Instagram, played a crucial role in showcasing the country's stunning landscapes, from the Northern Lights to black sand beaches, further driving interest.
Between 2013 and 2019, Iceland saw an explosion in visitor numbers. In 2010, around 490,000 people visited the country; by 2019, that number had surpassed 2 million—more than six times the nation’s population. The economic benefits were undeniable, with tourism becoming Iceland’s largest industry, overtaking fishing and aluminum exports.
The Challenges of Overtourism
With rapid growth came growing pains. Popular sites like the Golden Circle, Jökulsárlón Glacier Lagoon, and Skógafoss became overcrowded, leading to environmental degradation and concerns about preserving Iceland’s delicate ecosystems. Infrastructure struggled to keep up, with an increasing need for more roads, accommodations, and facilities. Rising property prices in Reykjavik also made housing less affordable for locals, as short-term rentals boomed.
Recognizing these issues, Icelandic authorities began taking steps to manage tourism more sustainably. Efforts included restricting access to certain natural sites, implementing entrance fees, and investing in infrastructure improvements. Despite these measures, overtourism remained a challenge—until the COVID-19 pandemic forced an abrupt halt.
The Post-Pandemic Shift and the Impact of Recent Eruptions on Tourism (2020–Present)
The COVID-19 pandemic brought Icelandic tourism to a near standstill, giving the country a moment to reassess its approach. Additionally, recent volcanic eruptions have further shaped the tourism landscape. While these eruptions have caused occasional disruptions, they have also attracted adventurous travelers eager to witness Iceland's dynamic geological activity firsthand. However, the response to these eruptions has drawn criticism. Some scientists have been accused of playing with reckless doomsday predictions, and foreign media coverage has often exaggerated the situation, portraying it as far more dramatic and dangerous than reality. This fear-driven narrative led to a wave of concern among potential visitors. While Reykjavík, located about 40 kilometers from the eruption area, remained largely unaffected, some communities closer to the volcanic activity faced serious disruptions. The small fishing village of Grindavík was significantly impacted due to its proximity to the eruption sites. Additionally, residents in the nearby town of Keflavík experienced a temporary loss of hot water after a pipeline from the Svartsengi power station was damaged. The government's response involved distributing electric heaters and prioritizing emergency repairs. Thanks to the swift and dedicated work of local crews, the system was restored within a few days. Despite the impact on Grindavík and surrounding areas, the day-to-day experience of tourists in Iceland was entirely unaffected. Air travel operations continued as normal throughout the eruptions. This is very different from the famous 2010 Eyjafjallajökull eruption, which disrupted international air traffic for weeks. That eruption released a high-altitude ash plume that spread across Europe via the jet stream, creating hazardous conditions for aircraft and grounding thousands of flights. The recent eruptions, on the other hand, have been entirely different in nature. They have involved low-intensity lava flows and produced little to no ash, posing no risk to aviation. Air travel has continued uninterrupted, and the broader tourism infrastructure has remained stable and fully operational throughout these events. The overblown reporting contrasts sharply with the grounded daily reality in much of the country. As travel gradually resumed in 2021, the government and industry leaders pushed for a more controlled, sustainable model.
Quality over quantity: There is now a greater emphasis on attracting high-value travelers who stay longer and spend more, rather than simply maximizing visitor numbers.
Sustainability initiatives: Iceland is focusing on eco-friendly tourism, promoting responsible travel and carbon-neutral options such as electric rental cars and sustainable accommodations.
Diversifying destinations: Authorities are encouraging visitors to explore beyond Reykjavik and the south coast, promoting lesser-known regions like the Westfjords and East Iceland to distribute tourism more evenly.
Cultural tourism: A renewed focus on local culture, history, and traditions is emerging, with an emphasis on authentic experiences, such as farm stays and indigenous storytelling.
Where Icelandic Tourism Is Headed
Looking ahead, Iceland is poised to maintain its status as a premier travel destination but with a more mindful and sustainable approach. The government continues to implement strategies to protect natural resources while still welcoming tourists.
Future trends suggest an increase in:
Year-round travel, reducing the strain of seasonal peaks by promoting winter tourism.
Distributing tourism more evenly across the country by investing in infrastructure and promoting lesser-known regions, Iceland aims to reduce the strain on its most visited areas while encouraging travelers to experience the country’s diverse landscapes and hidden gems.
As Icelandic tourism moves into its next phase, the focus is clear: balance. The country is determined to protect its landscapes while continuing to offer visitors an unforgettable experience. Travelers who embrace sustainability and cultural respect will find that Iceland remains as magical as ever—just with a more responsible footprint.
Closing words
As the writer of this blog and a sightseeing flight pilot who has flown hundreds of times over the recent eruption sites at close range, I can personally attest to the how active and busy the airspace can be due to the high number of sightseeing flights and helicopters operating in close proximity. While the eruptions themselves pose no danger to aviation, the main risk comes from the dense concentration of aircraft in a small area, requiring constant vigilance and coordination among pilots. That said, witnessing these eruptions from the air is a truly extraordinary experience, offering a rare and awe-inspiring view of Iceland's raw natural power and volcanic landscapes.
