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American tourists in Iceland will outnumber Iceland's population this year

Iceland — a land of glaciers, snow, and reindeer — is so hot right now.

Among young professionals, the sparsely populated European country has suddenly become some sort of exotic pilgrimage: Facebook and Instagram feeds are filled with oversaturated images of fjords, colorful villages, and ice melt waterfalls. The country has been touted as an up-and-coming, must-see destination by a multitude of outlets, from Lonely Planet to National Geographic.

In 1949 — the year the Icelandic Tourist Board began tracking foreign travelers — a paltry 5,312 people came to visit. By 1996, just 200,000 tourists from around the globe were coming to Iceland annually. As recently as 2010, the number of visitors was actually decreasing. Then around 2011, things went bonkers:

So far this year, a whopping 1.61 million people have journeyed to Iceland — more than triple the figure from 2010. That number is expected to near 2 million by the new year.

What the heck is going on here? How did Iceland become the vacation destination du jour? Well, to start, it has a lot to do with Americans.

American tourists now outnumber Iceland’s population

In 2003, Iceland began tracking where its tourists were coming from — and according to that data, the largest portion hails from the United States.

Around 325,000 Americans have visited Iceland in 2016, compared with 51,000 in 2010. That’s a sixfold increase. Currently, Iceland’s population is 332,000 — so this year will mark the first time in history that American tourists to Iceland will outnumber Iceland’s population (represented by the dotted line below).

Beyond the Americans who actually book trips to Iceland, hundreds of thousands more seem to be lurking in the shadows, contemplating a future trip.

In a recent report, Kayak compiled and analyzed millions of travel-related searches. It found that between 2015 and 2016, there was a 65 percent increase in searches for Iceland hotels and flights. Much of this interest surrounds New Year’s vacations.

During winter in Iceland, the sun rises at 11:30 am and sets at 3:30 pm. That’s four hours of daylight. Temperatures hover around the mid-20s, and it rains, on average, two out of every three days. For most people, that doesn’t exactly sound like vacation material.

So what is accounting for this recent burst in interest?

It began with a volcanic eruption

Eyjafjallajökull erupts in April 2010.

In April 2010, a volcano named Eyjafjallajökull erupted in southern Iceland, causing a weeklong shutdown of the European air industry. It made international headlines for weeks.

At the time, Iceland’s tourism industry was flailing, and the country’s economy was still in a post-2008 recession slump. But Iceland’s tourist board had a genius idea: For once, the country was in the spotlight — why not seize the occasion as an opportunity to attract tourists?

In the following months, Iceland released a series of videos — Inspired by Iceland — featuring dancing, singing, glaciers, fjords, and naked women in hot springs. The campaign was pushed out hard on social media.

The chart below shows that this campaign fell right at the point at which tourism shot up in Iceland.

While interest in Iceland was sparked by the volcano and ensuing PR campaign, a concerted effort to boost tourism infrastructure sustained it.

Between 2010 and 2014, registered tour operators in the country increased from around 175 to 776. Aided by technology, Airbnb and Vrbo rentals sprang up in downtown Reykjavik.

But most importantly, flights became a whole lot cheaper.

How a budget airline made Iceland a tourist destination

Iceland’s sustained growth since 2010 can be summarized in three letters: WOW.

Prior to 2012, flights to Iceland could cost as much as $1,500 in peak season. And carriers’ availability was select: Icelandair, the most popular airline running trans-Atlantic Iceland flights, only operated in six major US hubs.

In 2012, Iceland-based WOW Air began offering extremely cheap flights from Europe to Iceland, and in 2015 it expanded to North America. As of writing this article, the average flight to Iceland is now 26 percent cheaper than the median airfare to other major tourist destinations. January flights to Iceland can be booked for as low as $380.

WOW Airlines, founded in 2011 by Skúli Mogensen (pictured), helped boost Iceland tourism.

Looking at the tourism growth graphs earlier in the article, WOW’s expansion to the US had a tremendous impact: Between 2014 and 2015, the number of Americans traveling to Iceland increased from 152,000 to 242,000 — a 37 percent jump.

Founded in 1944, Icelandair has also had a considerable impact on tourism. The airline’s free stopover offer and “Stopover Buddy” marketing stunts have helped it retain its throne as Iceland’s most popular airline.

But according to industry experts, cheap airfare is only one part of the equation.

Iceland is a safe alternative to European “turmoil”

Bjorg Gudjons, an agent at Nordika Travel, attributes some of Iceland’s newfound popularity to its reputation as a safe destination.

“What we’re seeing in the industry is that fear [due to terror attacks] has deflected travelers from other European countries,” she says. “Iceland is one of safest countries in the world.”

Americans may be forgoing other European destinations for Iceland due to safety concerns. In Brussels (pictured), North American tourism has declined sharply.

According to the Global Peace Index, Iceland is literally the safest country in the world, and has been for many years. (The United States, by contrast, sits 103rd out of 163 ranked countries.)

It is plausible that Americans, scared off by semi-recent terror attacks in Paris and Brussels and the bad press surrounding Brexit, are flocking to Iceland as an alternate European destination. While Iceland tourism continues to trend upward, North American tourism elsewhere in Europe has declined.

Iceland is the perfect destination for the Instagram generation

David Solomito, vice president of marketing at Kayak, says Iceland’s recent popularity could also be partly due to social media.

“It’s not too far (from Boston or New York, it’s a quick flight) — but when you’re there, it feels like you’re on a different planet,” he says. “People see pictures on social media and think it’s on Mars. It feels out of this world. It has that Instagram factor.”

Iceland pictures are a big hit on Instagram.
Lurie Belegurschi (@iuriebelegurschi)

The impact of Instagram on travel trends is well-documented — and the so-called Instagram generation is a case study in envy. The desire to post photos from unfamiliar lands that are still within reach might be driving travelers to explore Iceland as a travel destination.

Given the cheap flights, the virtual promise of safety (aside from exploding volcanoes), and scenes like the one above, it’s possible that Iceland’s astronomical rise in tourism has just begun.

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