Popular Tourist Attractions
Consequences of Tourism
Airbnb in Iceland
Figure 1. A graph from 1990 – 2010 depicting the growth of tourism in Iceland relative to Europe and the World.Known as an “untouched” land with unique natural features; Iceland has some of the few remaining wilderness areas in Europe. It is for this reason that tourists around the world are being drawn in by the Icelandic charm.
Figure 2. A graph depicting the increase in number of tourists in Iceland relative to the total population within Iceland.
The increase in tourism can be attributed to four key factors:
• Growth of tourism globally
• Low-fare flights & stopover deals
• Popularization by famous shows and movies (Game of Thrones, Star Wars)
• Devaluation of the Icelandic Krona
Figure 3. A comparison of where Game of Thrones filmed and the location in Iceland.
Figure 4. Skogafoss, a popular waterfall many tourists visit.
Figure 5. Vatnajokull, the largest and most voluminous ice cap in Iceland
Figure 6. One of the most popular natural features in Iceland - The Northern Lights
Figure 7. The Blue Lagoon, a geothermal spa.
Moreover, the lack of institutional frameworks such as public facilities, adequate transportation, signage and parking areas causes significant environmental degradation. Since the boom in tourism popular sites have experienced vandalism, littering, trampling of protected areas and people relieving themselves outdoors. Many popular destinations have sustained so much damage that landowners have considered bulldozing it.
Figure 8. Article headlines in Iceland.
Figure 9. An example of the vandalism taking place in Iceland.
The additional lack of regulation has led lots of tourists to search for the “off the beaten path” experience, causing significant damage from off-roading and the need for search parties. As previously mentioned, Iceland is working hard to handle problems associated with tourists, but the current infrastructure cannot handle the high volume of issues.
Due to the lack of public transportation in Iceland many tourists decide to stay in the south-west region because of the close proximity to the main airport, Keflavik. This causes an issue in regional distribution of tourists, leading to the capital, Reykjavik, handling most of the tourists. Further exacerbating the negative impacts of tourism in one single area.
Figure 10. Distribution of where tourists visit in Iceland.
According to Iceland Monitor, rentals of Airbnbs in the country have risen by an astounding 156%. This negatively impacts the local property market by driving up rental prices. High rental prices lead to a shortage of housing for locals, who cannot afford the steep prices.
Figure 11. A property available for rent in Iceland.
To combat issues such as this one, the Icelandic parliament in 2016 passed a law that sets specific limits for renting out your property through Airbnb. The law states that a person can rent out their property for up to 90 days a year without needing an operational license. And the gross income from renting out their property cannot exceed 1 million ISK, therefore meaning Airbnb renters cannot charge more than 11,111 ISK/night (107.77 USD/night). Additionally, operators would need to register their property every year at a cost of 8,000 ISK (77.60 USD). Interestingly, Iceland took a page out of Berlin’s playbook. When affordable housing started to disappear in Berlin, the government passed a law stating hefty fines would be issued to users who rent out entire properties rather than single.
The current issue being discussed among leaders is the land-use conflict. In order to harness renewable energy (geothermal and hydrothermal) popular tourist destinations will need to be disturbed, making the site unavailable to tourists. While this conversation is ongoing, it will be interesting to see how Iceland develops in the future with these issues present.
Figure 12. A graph of Iceland's energy supply by source.
Boston Consulting Group. “Northern Sights: The Future of Tourism in Iceland.” Boston Consulting Group, Sept. 2013.
Fontaine, Paul. “New ‘AirBnB Law’ Approved by Parliament.” The Reykjavik Grapevine, Froken Ltd., 4 June 2016.
Gottlieb, Jenna. “Iceland’s massive popularity with tourists has a gross downside.” Quartz, 28 Nov. 2015.
Organization for Economic Co-operation and Development. “Iceland Highlights 2014.” OECD. 2014.
By: Heidi Ahn