Every year, more and more people travel to Iceland to hike up volcanoes and through glacial valleys. The country is roughly the size of Virginia, yet has a population of only 335,000. Thanks to otherworldly, volcanic landscapes, natural hot springs, glacial valleys, and waterfalls so numerous no guidebook could name them all, the economy is simply booming. 

To say that Iceland's tourism economy blew up nearly overnight is no exaggeration: In 2010, the Icelandic Tourist Board counted just under half a million visitors. Last year, it counted nearly 1.8 million.

Nanna Gunnarsdottir

Nanna Gunnarsdóttir

These tourists pump billions of dollars into Iceland's economy, and they've helped local businesses grow dramatically. But having such a flood of visitors has presented challenges for the country, too. Nanna Gunnarsdóttir, content manager for Guide to Iceland, which connects visitors with tours, lodging, travel suggestions, and other services, how the country has dealt with so much change. 

How has such an influx of tourism affected Iceland?

The biggest positive impact, I'd say, is that it has generated a lot of jobs. Many exciting start-up companies have been thriving because of tourism, which has brought in a lot of money and pretty much saved the economy after the large economic crash that happened in 2008. Not only do tour organizers and guides gain from the influx of tourism, but so do restaurants and cafés, builders, plumbers, other trade workers, and even the entertainment sector.

New cafés and shops are opening almost weekly, giving the locals a wide selection of food, entertainment, clothes, and design—and more competitive prices as well.

For locals this also means that, nowadays, it is much cheaper to travel abroad from Iceland, as there are dozens of airlines now connected the country. Until 2002, there was only one airline that ruled the market.

But the influx has happened suddenly and fast, and Iceland's infrastructure wasn't ready to accommodate all these people. A lot of brand-new hotels have been rising to make room for travelers, and many old establishments in downtown Reykjavík have been replaced by glossy hotels. If the tourist bubble eventually bursts, there will be a lot of empty hotels and a ghost town. As Airbnb has skyrocketed and become more profitable for locals than renting out their apartments long-term, it has become impossible for many locals to find places to live.

Icelandic moss

Icelandic moss is incredibly scenic, but it's also quite fragile. If you visit, stay on trails to protect delicate ecosystems such as this one.

Our environment has also been affected. Icelanders know that the moss is delicate and takes 100 years to grow, that the weather changes in a heartbeat, that you can get lost in a thick fog, that the Atlantic waves can suddenly sneak up on you and take you out to sea, that if you fall through a crack in a glacier you may never be found again, that there are no shops or traffic in the highlands, that climbing icebergs is life-threatening, and so much more.

With the increase in tourism, there has been an increase in fatal accidents, as foreigners may not understand these dangers. We’ve had to build fences and put up warning signs, taking away from the “wild and unspoiled” feel of some of Iceland's impressive natural attractions. Rural attractions that were once hidden and rarely visited have become the new “it” spots to visit, so in some places the excessive traffic has either damaged the fragile nature or made parking spaces and bathrooms a necessity.

What can we do as tour operators and travelers to mitigate our impact?

Don't stay at Airbnbs that drive up the local rent. There are homey guesthouses for moderate prices available, and clean hostels for cheaper prices if the hotels are too expensive.

Leave no trace. And I mean absolutely no trace. Just leave things exactly as they were. Read the warning signs and listen to local advice.

What’s the best way for visitors to Iceland to get off the beaten path and away from the most common tourist destinations?

Rent a car and go exploring. Drive the roads that are not the main roads (unless they are F roads, then you need a 4WD and you need to check their accessibility). Look around. If you see a beautiful waterfall or a good looking mountain, then park your car (safely, not off-road) and go hiking for an hour or two.

The “main attractions” are those that happen to be easy to get to, but there are gorgeous places all over the country.

Take Seljalandsfoss waterfall and Skógafoss waterfall, for example. They get a lot of attention since they are both by the Ring Road and a short drive from Reykjavík, but a 10 minute walk from either one of those waterfalls will bring you to others that are just as impressive—and less crowded. Hike up the stairs pass Skógafoss and continue on a trail there to see 35 waterfalls in a row. If you keep going on the Fimmvörðuháls trail (a long hike, about 10 hours), you'll end up in Þórsmörk, a beautiful highland area.

What are some of the most overlooked natural wonders or destinations in Iceland?

Those would be the Icelandic highlands and the Hornstrandir Nature Reserve in the Westfjords, that are only accessible between June and August. Here you'll get remote beauty, but no luxury. There are no shops, there are no hotels, there are no gas stations. The only way to get around is by hiking or biking (or possibly horseback riding if you're in the highlands).

If you're short on time but want to get away from the crowds, go to the Westman Islands, which simply don't get that many visitors since you need to book a boat ride to get there.

During summer, do your traveling during the night, as the sun will be up and the nights are bright—but most people are asleep so you'll likely find a place all to yourself.

Cover image by Lauren Tedford


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