15 years into the boom, Iceland asks if it’s had enough of mass tourism

By STEFANO MONTALI

“Sometimes it can feel like Iceland is just one big tourist attraction.”

Helga Gudrun, a waiter at a family-owned restaurant in Vik, a scenic village in southern Iceland, had just placed a bowl of warm Icelandic lamb soup on the table. Home from college to work the summer season, she was reflecting on the ways tourism had changed the place where she grew up.

Visitors had spurred job growth and helped revitalize the area, but not all tourists follow the rules, Gudrun said. Farmers have complained about tourists parking on their land and feeding horses without permission. “One horse even died,” she said. And in July, a local paper reported that Vik’s septic system had been overwhelmed by the “sheer number of tourists.”

It hadn’t always been this way. In fact, one event in particular had set it all off.

“I remember the summer everything just — changed,” she said.

For many years, Iceland was a place more heard about than visited. Its name evoked Viking sagas, the Northern Lights and the hypnotic tones of a singer named Björk. But in March 2010, a volcano, Eyjafjallajokull, sputtered to life after 187 years.

A mammoth cloud of volcanic ash exploded into the atmosphere. European air space closed for eight days, its largest disturbance since World War II. More than 100,000 flights canceled, millions of travelers stranded, around $1.7 billion in lost revenue for airlines.

Throughout the chaos, news channels beamed images of Iceland’s lunar landscapes, black-sand beaches, towering glaciers and geothermal pools. Suddenly, this island nation the size of Kentucky, with a population comparable to Pittsburgh’s, had captured the world’s attention.

Hoping to capitalize on the international interest, the Icelandic government and travel organizations moved quickly — and by June had launched the “Inspired by Iceland” campaign. When the dust and ash settled, the Nordic island country was ready for its moment in the sun.

Iceland was in need of a turnaround. The 2008 financial crisis had left it reeling: Unemployment had hit 9%, and the Icelandic krona had halved in value.

Low-cost airlines played an important role. EasyJet began offering flights to Keflavik International Airport, the country’s main international airport, in 2012. Wow Air, the Icelandic ultra-low-cost carrier, began operating the same year and by 2016 was offering free stopovers on flights between North America and Europe. It was easier than ever to visit.

Online, Iceland’s wild beauty became a coveted backdrop on a popular new app called Instagram. Justin Bieber shot a music video there, frolicking beside waterfalls and skateboarding down the now-iconic wreckage of a U.S. Navy plane.

Fifteen years have passed since Eyjafjallajokull’s seismic eruption — and tourists have flooded in. In 2024, Iceland received about 2.3 million foreign overnight visitors, up from fewer than 500,000 in 2010. The industry has transformed the country, in many ways for the better.

Locals have a saying: Thetta reddast — “It will all work out.” And by many measures it has. But as Icelanders, aided by a longer outlook, begin to take stock of the seemingly irreversible changes around their country, some feel that the honeymoon has come to an end.

Evolution in the capital

Downtown Reykjavik, Iceland’s coastal capital, was nearly empty on an early morning in July. Iceland gulls flocked overhead as the volcanic Mount Esja, a popular day-trip destination, towered to the north. Hallgrimskirkja, the country’s tallest church and a landmark, glared down from atop a central hill.

The city’s main street is lined with colorful storefronts, many of which cater to tourists. Tiny troll dolls, horn-hatted Viking figurines and encased bits of volcanic rock were all for sale. Locals wryly call the seemingly identical stores “puffin shops” for their countless offerings related to the island’s famous clown-faced birds.

Just inside IcelandCover, a shop that rents outdoor clothing to tourists, David Ingimarsson sat, awaiting customers. Before starting his own business, Ingimarsson, 31, worked at several pillars of Iceland’s tourism industry, including the Blue Lagoon, the popular geothermal bath, and Wow Air, which ceased operations in 2019.

In 2022, he moved into this storefront. “It’s funny, when we got our driving licenses,” said Ingimarsson, who grew up in Reykjavik, “the thing to do was drive right down here.” In recent years, though, as the downtown economy pivoted to serve tourists, much of the street has become pedestrian-only — and many longtime businesses, including a beloved hardware store that operated for more than 100 years, have closed.

“Those kinds of businesses just don’t make sense down here anymore,” Ingimarsson said.

Changes in a scenic hot spot

A drive along Iceland’s southern coast is framed by vast, green spaces and waterfalls that spout from the sides of mountains. Icelandic horses and livestock graze. As hours pass along the two-lane road, the plausibility that elves and fairies do exist, as local folklore suggests, grows.

Vik i Myrdal, often simply called Vik, is Iceland’s southernmost town and sits on the coast about 2 1/2 hours from Reykjavik. Today, it’s famous for its black-sand beaches and a picturesque, red-roofed church on a hillside. Its imposing neighbor is Katla, one of Iceland’s most active volcanoes.

Even without any recent lava, Vik is a hot spot. Since 2010, the once-agricultural town has been shifting toward tourism. “Let’s put it this way,” said Einar Freyr Elinarson, 34, the mayor of Myrdalshreppur, the municipality that incorporates Vik. “Every other farm used to have a dairy farm. Now, every other farm has a guesthouse or bed-and-breakfast.”

Before, Vik mostly hibernated during winter months. Now business is year-round. Around the zip-lining vendors, all-terrain vehicle rental companies and glacier-tour pickup points, a mini-economy has developed: new restaurants, a brewery, a live “lava show.” On a recent weekend morning, every seat in a school-bus-turned-cafe was full.

According to Elinarson, foreigners of close to 30 nationalities work in the town. One of them is Adam Szymielewicz, from Poland, who welcomed locals as they trickled into the town’s public pool. For most Icelanders, a dip is a daily ritual, a communal meeting point, like the sauna is to the Finnish.

Szymielewicz, 35, arrived in Iceland seven years ago to work as a lifeguard. He’s not alone. Since 2010, the percentage of foreign citizens living in Iceland has risen to nearly 17% of the total population, up from 6%. Myrdalshreppur is the only municipality in the country in which foreigners are the majority, around 60% of the 1,000 residents.

As more workers come to Vik, the town has experienced a “baby boom” said Elinarson. The elementary school, where Szymielewicz also teaches, is growing quickly. It has also faced some peculiar issues. On its playground fence, the school has hung signs reminding tourists not to photograph the students.

The original, Nordic-style homes fade into cement, Soviet-like structures, many of them prefabricated, on the east side of town. “They kind of remind us Poles of home,” Szymielewicz said with a laugh.

Elinarson acknowledged the criticism. But he’s still excited for Vik’s development, even if it changes the local fabric. “The alternative was that the town was dying,” he said.

Because of tourism, Elinarson said the challenges they now face are positive ones. “Instead of, ‘We don’t have any new children,’” he said, “the question is, ‘How are we going to teach all of these new children?’”