Strong growth in Reykjavik tourism

Harpa, Reykjavík, Iceland

Harpa, Reykjavík, Iceland (Photo credit: Mórka)

Tourism is one of the fastest growing sectors in Iceland with incoming tourists going from 300.000 in 2003 to almost 700.000 in 2012. Growth has actually increased up to over 15% since 2010. The biggest visiting nationalities are from USA, UK, Germany, France, and the Scandinavian countries. Tourism represents 6.6% of GDP in Iceland and contributes to 19% of the export income. Tourism in Iceland is focused around Reykjavik with 95% of foreign tourists in Iceland visiting the capital.

Reykjavik offers investors several interesting investment possibilities in tourism.

In Reykjavík there are around 200 hotels and guesthouses operating with over 4.400 rooms. Thereof there are 35 hotels and 8 hostels. This picture illustrates where they are located. The downtown area is the most popular location but larger hotels are mostly located just outside of the downtown area (10 minute walking distance).

Geographical distribution of hotels and guesthouses in Reykjavik, Iceland
Geographical distribution of hotels and guesthouses in Reykjavik, Iceland

If the growth in tourism continues at its current 10 year pace of 7% per year Reykjavík needs between 3.600 and 7.500 new hotel rooms until 2030. That means that per year one large (200-300 room) hotel should open. 

The city of Reykjavik has collected information on new ongoing projects in the hospitality industry in the city. Currently there are seven projects ongoing with a total of 1.100 rooms. These projects are all located in the city center. The largest projects  are a 343 room, 16 floor hotel at the Höfdatorg development and a 250 room hotel to complement the Harpa Concert Hall and Conference Center.

Proposed hotels in Reykjavik in October 2013
Proposed hotels in Reykjavik in October 2013

The proposed projects are (from left to right):

Icelandair Hotel Marina – extension:             60 rooms

Landssiminn building:                                        159 rooms

Hotel Borg – extension                                      43 rooms

Harpa conference hall hotel                            250 rooms

Icelandair Hotel Cultura                                    142 rooms

Hverfisgata no. 100                                            100 rooms

Höfdatorg hotel                                                 343 rooms

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