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06. febrúar 2018 Atvinnuvega- og nýsköpunarráðuneytið

Ræða Þórdísar Kolbrúnar R. Gylfadóttur á ráðstefnu Vestnorræna ráðsins um ferðamál í Ilulissat

Chairman Höjgaard, Vice Chairman Johanesen, Minister Enoksen, dear friends.

I would like to start by thanking our hosts here in Greenland, and here in Ilulissat in particular, for giving us such a warm welcome. This is my first time in Greenland and I must say: I am deeply impressed and moved by the experience. This vast country is of course our next door neighbor, and yet it is different; unique; a special kind of world. I am grateful for this opportunity to visit, and hope to do so again in the future, and take my family with me.

You are probably all well aware that in Iceland, we have had a massive increase in tourism over the past few years. You could well describe it as an explosion.

There are many reasons for the growth, but most people would agree that the volcanic eruption in Eyjafjallajökull in 2010 played a very big part. At first we thought it might destroy our tourist industry. And it did in fact hurt us in the short term. But in the long run, it helped us. The eruption was headline news in the international media for an extended period, and put Iceland very much on the map. People became much more aware of the country. The Icelandic government used the event to greatly increase funding for international marketing. And the airlines vastly increased the number of available flights, partly in response to increased demand, but partly they created the demand, by offering the flights.

Let’s consider the magnitude of the growth.

In the year 2010, less than half a million tourists visited our country. Four years later we reached 1 million. And three years after that, in 2017, the number was well over 2 million.

So in the last seven years, the number of tourists has increased almost five times.

You can imagine that this has been a challenge for the government, for basic infrastructure such as roads and airports, for nature, for the tourism industry, for society in general, for residents in downtown Reykjavík City, for the labour market, for the housing market, and for the economy as a whole, in particular by strengthening our currency, which in turn makes the country more expensive for tourists.

It has been a challenge in all those respects. But it has of course also brought great benefits. It has helped us recover from the economic collapse of 2008. It has brought new life to many towns and farm areas all around the country. And I would say that we have, overall, responded well to the various challenges.

In light of the massive growth, you might have predicted serious trouble and even chaos. But that is definitely not the case. On the whole, we have seen an effective response from the tourist industry, as well as government, both local and national, and various infrastructure agencies, such as Keflavík international airport.

If we had set out the mission in the year 2010 to have over 2 million visitors in the year 2017, and to have that happen in exactly the way that it did, we would today be placing awards and medals around the neck of whoever came up with that mission, and the action plan to execute it.

But in reality, there was no such mission. In fact, it would probably not have been wise to put this dramatic increase as our goal. Even though we have managed it reasonably well, a five-fold increase in seven years is more than you would wish to plan for. It may be fine when you are going from ten people to fifty, but it becomes a real challenge when you are going from less than half a million to over two million, in a nation of only 330 thousand.

So there was no mission or plan to achieve an increase on this scale. We did what most other countries do: Fairly traditional marketing of the country, combined with modest strengthening of local infrastructure.

When the boom began, and then continued for a couple of years, it became clear that we needed to take clear and decisive action to manage it.

The government started an extensive effort to map out the strategy for Icelandic tourism, involving approximately one thousand individuals. But it quickly became clear that we could not afford to spend time devising a long term strategy, and we didn’t have the necessary data to underpin it. Instead, we urgently needed a medium-term action plan, in order to cope with the situation. The result was the “Roadmap” for Icelandic tourism until 2020, which was published in late 2015.

And this is the plan we are currently executing. According to the Roadmap, we have been focusing on seven key objectives:

Number one: Coordinated governance at the government level.

Number two: A positive experience for our guests.

Number three: Reliable data and statistics, which were seriously lacking but have now greatly improved.

Number four: Conservation of nature.

Number five: Professionalism and quality within the industry.

Number six: Increased profitability in the industry.

And number seven: Increased distribution of tourists, both geographically and over the different seasons.

Each of the seven focus areas has several specific actions attached to it.

In order to execute this medium-term action plan, we established the so-called “Tourism Task Force”. A key feature of the Task Force is that it is composed of several Ministers from the government: The Minister for Tourism, the Minister for Finance, the Minister for the Environment, and the Minister for Transportation and Municipalities. This inter-ministerial approach is extremely important. In addition, the Task Force has representatives from the National Association of Municipalities and from the National Association of the Tourism Industry.

The Task Force is a temporary measure which will expire in the end of the year 2020. We have not decided what will replace it, but in my view, we will need to keep some element of the inter-ministerial approach, in order to push back on the tendency of government ministries to work in silos, without proper consideration of overlapping interests. This is especially important for an industry such as tourism, which cannot be managed without the co-ordination of many different interests, such as transportation and the environment.

As for specific projects we are currently engaged in, let me use my last remaining minutes to mention just a few.

We have greatly increased funding for the Tourist Site Project fund, which supports investments in infrastructure at tourist sites on private and municipal land, mainly in order to increase safety and to protect nature, but also to support the creation of new sites that encourage our visitors go to more areas of the country.

At the same time we have launched a separate and ambitious National Master Plan for Environmental Protection at Popular Tourist Sites, which focuses on state-owned sites, as well as municipal land.

We have started to subsidize international flights to North and East Iceland, both direct flights and connecting flights through Keflavik International Airport, to the extent that European regulations allow us to do so. This is now starting to show some results.

The Tourist Board has led an ambitious program called Destination Management Plans or DMPs, whereby different parts of the country set out their own specific strategies for tourism, in order to establish an identity for each region, as well as setting out a plan for which types of tourism are appropriate within each small area. Snæfellsnes, whom we heard from yesterday, were ahead of their time in this area, along with a few other places in Iceland.

We have decided to significantly increase funding to research into tourism, both academic research and regular data gathering.

We have established a centralized online data center, with almost real time information on various data, which we continue to expand.

Our marketing, under the headline “Inspired By Iceland”, is focusing on the off-season. The results have been excellent, since now, only less than one-third of our visitors come in the high-season, June, July and August.

We are preparing legislation to increase safety requirements for operators.

We have increased funding to the so-called “SafeTravel” initiative, which is managed by our voluntary nationwide rescue teams, who provide valuable education and information about safety issues to our visitors.

And we have started an initiative to identify the most important variables that could tell us whether we are experiencing over-tourism. We call this: “Project Equilibrium”. We want to be able to measure on a regular basis, what areas are under stress: infrastructure, nature, services, economy, or satisfaction levels among locals or tourists. We want to be able to monitor whether any of these variables seem to be overstressed, whether or not we can fix them and what it might cost. This has been done before at the regional level in some countries, but we are not aware of such analysis being made nationwide.

All of these ten projects, and of course others, will inform our LONG TERM tourism strategy, which we are formally starting to work on, as our five-year medium-term roadmap until 2020 continues to unfold. We enter that process with a lot more knowledge than we had just a few years ago.

I could of course go on, but I will stop here.

As for the future, we hope the growth will be more sustainable. I mentioned before that tourism has strengthened our currency, which has made Iceland more expensive. We see some indication that people are staying for a shorter period as a result, which is actually a global trend. And we see clear evidence that they are spending less money than before, when measured in Icelandic krona, which is what matters to us, although they are actually spending more money when measured in their own currency. Both these trends are a concern to us, since obviously our goal is to have each guest stay longer and spend more.

But interest in travelling to Iceland shows little sign of decreasing, despite the high cost. And we believe it will still increase this coming summer, when Iceland will receive probably its biggest publicity ever, when we take part in the men’s football World Cup in Russia. We are the smallest nation in history to qualify. It is a kind of “Cinderella story” that will probably gain a lot of attention, and we have decided to use most of our marketing budget in 2018 in World Cup related initiatives, to make sure that the spotlight is used in the best possible way.

In closing I would say that tourism has been beneficial, and we can still increase the benefits. But we have to be very careful to ensure that tourism doesn’t become a victim of its own success. We have not yet introduced any quotas for any sites, but we are keeping a close eye on things, especially with the regional Destination Management Plans, the Infrastructure Fund, the National Plan for Environmental Protection at Tourist Sites, increased safety demands, increased research, and the “Equilibrium Project”.

Just to close this, I hope we will continue to share our experiences for mutual benefit in the years to come.

Thank you.

 

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