Travelers take advantage of Iceland's troubles

It might have gone bankrupt and its currency might have plummeted, but travelers from Britain and the Nordic countries are increasingly visiting Iceland. Recent economic turmoil in the country means these opportunistic tourists are able to enjoy an extremely favorable exchange rate.

There was a 20 percent increase of British people traveling to the country in September this year, according to the country's tourism marketing director Sigrun Sigurdadottir.

"It's been very busy lately," Sigurdadottir told the Press Association during the World Travel Market in London on Monday. "We did carry out a very successful marketing strategy earlier this year to try to encourage more Britons to come to Iceland and now they are getting the benefit of very good exchange rates."

The dollar bought 83.94 Icelandic kroner at the beginning of September, and now buys 129.64 kroner; the euro also now buys 165.71 kroner against the 122.59 kroner it bought in September. The sliding kroner has translated into cheaper accomodation and amenities, so that tourists can now, for instance, stay in a four-star Icelandic hotel for as little as $70.00 a night.

Nick Bylund, sales director for the Centerhotels, a three and four-star hotel chain, told Forbes.com that average hotel room prices had fallen to around 17,000 Icelandic kroner ($130.68), from 30,000 Icelandic kroner ($231.20) back in April.

On Oct. 9, Iceland declared its banks were unable to finance about $61 billion worth of debt, 12 times the size of the economy, putting it dangerously close to bankruptcy. Luckily for the country's 300,000 citizens, however, Iceland has not lost its picturesque landscapes and tourist attractions.

"We will be able to cope as long as we can get people to Iceland, and as long as the two local airlines, Icelandic Airlines and Iceland Express, keep their routes to Europe," said Bylund. "But airlines are struggling and some hotels might even go bust."

Iceland's airlines are still trying to fly in as many people as possible. Budget airline Iceland Express will launch a new service from London's Gatwick airport next spring with eight flights per week to Reykjavik starting from 69 pounds ($107.69) one-way, including taxes.

Bylund warned that cheap prices wouldn't be sustainable over the long term. "Inflation is so high that I expect interest rates to go up in the next couple of months," he said. That should put upward pressure on the Icelandic kronor. Sigurdadottir also warned that there is still no way to tell if visitors would keep coming in the new year.

(πηγή: www.iht.com, 20/11/2008)