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The Outlook for Iceland’s Tourism Industry in 2022

Iceland’s Tourism Industry
Iceland’s tourism industry is one of the country’s most dependable money-makers and job providers. Like many countries, Iceland’s tourism industry underwent severe economic losses and lacked new jobs and job security because of the COVID-19 pandemic. However, the Bank of Iceland, Islandsbanki, released a report publishing its expectations for a significant resurgence in tourism for Iceland in 2022.

Tourism’s Importance to Jobs and Economic Growth in Iceland

Tourism provides 39% of Iceland’s annual export revenue and contributes about 10% to the country’s GDP. Iceland’s tourism industry accounts for 15% of the workforce. In 2017, 47% of Iceland’s newest jobs were in some way related to the tourism industry.

Iceland experienced a devastating financial crisis in 2008. Job availability dropped nationwide, the poverty rate increased and the GDP dropped dramatically in the following years. It took some forecasting, but the Icelandic government developed plans calling for the tourism industry to be the savior of the Icelandic economy.

To this end, the government established a brand new Tourist Control Centre, which coordinates the government’s work in tourism nationwide. It creates new typical tourist surveys and improved cooperation under the government’s four tourism ministries. The government also implemented efforts to track the most popular tourist destinations and receive input from tourists on how to improve their experiences at those destinations.

Iceland’s tourism is so popular that the government has had to devise limits on how long individuals can rent on Airbnb and on whom must receive limitations. Rental cars are similarly limited, with nearly 80% of tourists reported renting a car at least once during their visit to Iceland. The airfare to Iceland is one of the cheapest deals year-round.

The tourism industry has been primarily responsible for the economic boom that has occurred since 2012. The plans that the Icelandic government developed went into effect in Fiscal Year 2012 and involved the government’s expanding funding opportunities in the tourism industry.

Since the expansion of the tourism industry, the increase in job availability and economic growth, Iceland has made great strides in keeping the poverty rate low and the population of those at-risk of poverty lower than what was possible pre-2012.

Impact of COVID-19 on Iceland’s Tourism Industry

Iceland has the lowest poverty rate in the world, but the COVID-19 pandemic put this at risk. The international average for a country’s poverty rate is 11%, but Iceland has the world beat. The country’s poverty rate is at 4.9% and has been dropping since the expansion of the tourism industry.

Furthermore, there were an estimated 36 Icelandic citizens for every 1,000 who were at risk of falling into poverty in 2008, at the beginning of the economic crisis. Since then, the number rose briefly above 40 individuals then rose and fell for several years, but distinctly dropped in 2014. This coincided with the beginning of the full establishment and implementation of Iceland’s expanded tourism industry.

The pandemic’s impact on tourism left the country with another drop in jobs and an economic dip. During the COVID-19 pandemic, Iceland experienced a 10-month long halt in tourism. Iceland’s GDP dropped from $24 billion to $19 billion in one year largely because of the loss of tourism between 2019 and 2020, according to Data Commons.

Expected Resurgence in Iceland’s Tourism

As soon as it became feasibly safe, Iceland reopened its borders to tourists with clear instructions. First, it allowed tourists to travel to the country as long as they isolated themselves for 14 days prior to their trip and were able to provide a negative COVID-19 test taken within 72 hours of arrival in Iceland. Since then, Iceland has allowed its visitors to arrive without those other restrictions as long as the tourists are fully vaccinated and boosted against the virus.

The increase in Iceland’s tourism is not unprecedented. In 2018, the increase in tourism was 5.4% and in 2017, it was 24.1%. Icelandair, the main airline for travel to Iceland, has its own plan for balancing safety and getting as many tourists to Iceland as feasible in the works.

Iceland’s central bank, Islandsbaski is expecting a minimum of 1 million tourists to Iceland, but as many as 1.3 million may come. In November 2021, there were a meager 75,000 tourists for the entire month. However, this is more than 20 times the final tally for tourists for that month in the preceding year.

Even though tourism paused for the better part of a year, the tourism industry is ready and raring to go. Despite the pains of the COVID-19 pandemic, the Icelandic tourism industry will reopen in 2022 as much as possible and the economic boost to come from it is invaluable.

– Clara Mulvihill
Photo: Flickr

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Combating Child Poverty in Iceland

Child Poverty in Iceland
Popular for its beautiful landmarks and picturesque views, Iceland is now facing an issue that highlights a much darker reality taking place on the nordic island. Iceland has been able to keep poverty at a relatively low percentage for much of its history. However, in the past decade, the country has experienced a drastic rise in poverty and child poverty in Iceland in particular. One can largely attribute this to the economic collapse that the country experienced a little over a decade ago.

The Situation

In 2008, Iceland’s banks defaulted as a result of loans that the country had taken out with many foreign banks. At the time, Icelandic banks were some of the most lucrative banks globally. The country accumulated a massive amount of debt following large loans and grand foreign investments. The intention was to further boost the economy and to take advantage of the financial prosperity taking place in the country at the time. The value of the Icelandic currency, the Krona, was at an all-time high with a 900% increase in value.

The country experienced an economic boom, and citizens received encouragement to take part in the flourishing economy. As a result, many purchased expensive homes, took on multiple mortgages and invested in foreign companies. The country was, unfortunately, unable to pay these large sums back. The result was catastrophic. Banks defaulted on foreign loans leading to a massive national financial crisis. Iceland’s credit was tarnished and almost every business in the country had gone bankrupt. Citizens ended up with large bills with little or no way to pay them. What followed was an extreme rise in poverty.

The Consequences of the Crash

Health care expenses experienced a peak, and with mortgages nearly doubling in cost, the price of living increased exponentially. Many households were unable to afford the basic and vital services required for daily living. According to a report discussing the consequences of the crisis, unemployment rates rose to 7.6%. This was 5% higher than the annual unemployment rates prior to the economic downturn. Inflation was another result of the crash. Mortgage prices increased nearly doubling.

With the national currency, the krona, experiencing a decrease in value, the price of many goods and services suffered an impact as well. Iceland saw a substantial rise in housing insecurity and homelessness. Citizens took to the streets to protest many of the issues taking place at the time, and to express their frustrations with the government’s reactions to the crisis. This resulted in a new left-leaning government that promised to offer support for its struggling citizens.

Child Poverty in Iceland and Government Aid

Child poverty saw a drastic rise during this time of economic downturn. In fact, child poverty increased from 11.2% to 31.6% between 2008 and 2012. Unemployment was on the rise, and families faced immense financial strife that greatly affected the home. Iceland’s government was able to provide its residents with support for regular access to vital resources such as food, housing and health care. Health care programs that Iceland put in place prior to the crash offered much-needed support to Icelandic citizens with health care services during the crash.

The Icelandic government also provided support in many areas. This included welfare services for low-income households, along with a tax decrease for low-income earners and a tax increase for high-income earners. This ensured financial support for the most vulnerable during the crash. Low and mid-income-earning citizens received social benefits and debt relief. Wealth redistribution played a large role in the economic support provided for citizens during this time.

The Case of Child Poverty

The ways in which poverty can present itself differs from nation to nation. One can find many of the challenges most common amongst Icelandic children living in poverty in many nations across the globe. According to a report by Humanium.org, some of the key issues that impoverished Icelandic children face are varying health issues, emotional strife, sexual exploitation and labor exploitation.

Confronting Child Poverty

Throughout Iceland’s history, the country has managed poverty rates well in comparison to other less developed islands. Prior to the financial crisis, Iceland held a relatively low poverty rate. According to a Statistics Iceland report, a total of 9% of the population was at risk of living in poverty in comparison to 16% in other nordic islands and the estimated 23% in the United Kingdom. While poverty existed in the country, it was certainly not as high as during or after the crisis.

Iceland has done tremendous work to repair its economy. The programs that Iceland’s government implemented provided support for many low-income families while also helping to boost its then damaged economy. Unfortunately, citizens who plummeted into poverty as a result of the economic downturn have struggled to find a way out. To combat this, the Icelandic government has implemented many methods of support for citizens facing these challenges. This includes lower-cost health care services, debt relief for mortgage holders and social services for low-income earning citizens. These policies have proven to provide much promise for a reduction in poverty overall in the country. The goal is that with a decrease in general poverty, the child poverty rates will also reduce in Iceland.

– Imani A. Smikle
Photo: Flickr

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10 Facts About Life Expectancy in Iceland

10 Facts About Life Expectancy in Iceland
Iceland, one of the healthiest European countries, lies between the Greenland Sea and the North Atlantic Ocean. Icelanders tend to outlive people from other richer, warmer and more educated countries. Below are 10 facts about life expectancy in Iceland that determine what factors may help Icelanders live longer lives.

10 Facts About Life Expectancy in Iceland

  1. On average, males and females in Iceland have a life expectancy at birth of 81 and 84 years respectively. Life expectancy increased from a combined national average of 78.8 years in 1994 to a combined national average of 82.4 years in 2016.
  2. Iceland has one of the lowest mortality rates in Europe. The average mortality rate is 6.5 per 1,000 inhabitants and the infant mortality rate is 2.7 per 1,000 live births, both below the European average of 10.2 and four. Not only do children under the age of five have better survival rates, but they also have a better chance of growing into healthier adults.
  3. Compared to the OECD average of 3.4 and three per 1,000 population, Iceland has a higher number of doctors and nurses with 3.8 doctors and 15.5 nurses per 1,000. A higher proportion of medical practitioners is a reflection of Iceland’s well-performing health care system.
  4. The health expenditure in Iceland picked up in 2012 after a dip following the 2008 financial crisis. The expenditure of $4,376 per capita is higher than the OECD average of $3,854 and accounts for 8.7 percent of its GDP. It has universal health care, 85 percent Icelanders pay through taxes. Private insurance is almost absent. This shows that health care is affordable and accessible in Iceland.
  5. The diet of the Icelandic people contains more fish and less meat. Fish is more beneficial for heart health due to the presence of omega-3 fatty acids. Healthier diet choices could be one factor that helps Icelandic people live longer.
  6. Research shows that the environment is a major determinant of health, and therefore, longevity. Iceland boasts clean air and water. Its dependence on geothermal resources for energy instead of fossil fuels ensures an unpolluted environment. Further, natural hot springs occur all across the country. The cleaner and colder environment protects people from many communicable and infectious diseases which may help them live longer and healthier lives.
  7. Iceland is the eighth-most urban country in the world. Ninety-four percent of its population lives in urban areas and cities with access to basic amenities like electricity, clean drinking water and sanitation. Life expectancy for a country increases with an increase in urbanization.
  8. Good genetics may have played a role in higher life expectancy of Icelanders. Studies showed that those above 90 years of age share more similar genes compared to control groups. One possible explanation could be the harsh environmental conditions that Icelanders faced historically, which filtered their genes so that they would pass on the ones that helped them survive.
  9. Despite the harsh weather conditions, Icelanders have higher physical activity when compared to other European nations. Almost 60 percent of the Icelandic people perform some form of exercise for at least 150 minutes per week. Icelandic people like to participate in outdoor activities such as hiking, swimming and skiing.
  10. Iceland has the lowest proportion of substance abusers among all European countries. It reduced its percentage of drug users from 42 percent in 1998 to five percent in 2016. By imposing curfews and keeping teens busy in sports and activities, Iceland was able to divert them from drugs towards healthy habits. This is an important factor when considering the life expectancy of a nation. People do not tend to die from drug-overdose and they also live healthier and economically stable lives.

Icelanders show that lifestyle can have a major effect on how long people live. Both the Icelandic people and their government made efforts to improve their health statistics by reducing the consumption of fossil fuels and drugs and increasing physical activity. These top 10 facts about life expectancy in Iceland are full of lessons that people of other nations can learn and apply as successful health interventions.

– Navjot Buttar
Photo: Flickr