As the Global Climate Strike begins today, Moodie Davitt Research Analyst Max Lazer looks at the growing impact of two critical societal issues, using Iceland – which may have reached its peak in terms of overtourism – as a case study.
In recent times overtourism has become a hotly debated issue in travel and tourism, as well as in duty free and travel retail circles. Add in the topic of climate change and we now have on our hands two man-made and human-caused issues of gargantuan importance for the future.
At present it seems as if the overtourism challenge is more manageable than the climate change one – which still has its non-believers, notably including US President Donald Trump.
In terms of overtourism, many countries and cities (Barcelona, Dubrovnik and Venice are among those most frequently mentioned, often in the context of cruise ship and passenger arrivals) have become dependent – or expressed more dramatically, ‘addicted’ – to tourism income, to the extent that they wonder if they can turn away such an important source of income.
The positive news is that many responsible authorities have begun to tackle this issue in a serious manner. This includes the introduction and enforcement of laws and regulations, considerate planning, as well as firm and bold decision making seeking to the prevent the negative impacts of a country or city being visited by too many tourists. To the authorities it is about trying to find a balance in tourist demand versus the needs and requirements of local residents.
The Moodie Davitt Report has taken closer look at Iceland, a country that has possibly – as explained below – reached its peak in terms of overtourism. But Iceland is still faced with major challenges relating to climate change.
Iceland is on many people’s ‘bucket list’, becoming a ‘must visit’ country that everyone should see at least once in their lifetime.
The country’s popularity in recent years is not surprising. Iceland offers many scenic delights that few other countries can offer or match: thermal springs, white glaciers, snow-topped mountains, waterfalls, spectacular natural surroundings, and a beautiful coastline. All are within a relatively short distance – no more than a day’s travel – of each other.
In 1948, when the duty free industry began, Iceland welcomed less than 5,000 visitors. In 2018, the country reached an all-time high of well over 2.3 million visitors.
Over the past 10 years, Iceland has welcomed nearly 12 million tourists representing an almost incredible 35 times the population of the country (which is just about 360,000). There is no fixed numerical definition of where the limit of overtourism lies, but Iceland definitely seems to have reached and even surpassed that level. According to the Oxford English Dictionary, which last year included the word ‘overtourism’ for the first time, defines it as “an excessive number of visitors heading to famous locations, damaging the environment and having a detrimental impact on residents’ lives”.
Tourism in Iceland has been booming over the past decade. Between 2011 and 2017, the annual percentage growth in tourist arrivals easily reached double-digit figures, peaking in 2016 at +39%. In 2018, the growth rate in tourist arrivals was a somewhat disappointing +5.4%, signalling that the booming tourism years that Iceland had been enjoying for so many years were perhaps about to come to an end.
Indeed, over the past 12 months ending 31 July 2019, the number of tourist arrivals has declined by -5.1%, to 2,140,983.
During the four-month period January to April 2019, total expenditure by visitors (Icelandic tourism receipts), including shopping spend at the duty free shop at Keflavik Airport, was down -10.7%. The figure is calculated in Icelandic kronas (ISK) and came despite the depreciation of the currency during the period. Calculated in euros, the decline in visitor expenditure came to an even more glaring -20.2%.
After the Seychelles, Iceland is the smallest country by population to have its own currency and monetary policy. So far in 2019 (to 14 September) the Icelandic krona has lost -4.6% on average against the world’s 162 currencies and -4.8% against the six currencies among the top 10 visitor source countries (the euro is listed four times). Most notably, the drop in visitor arrivals from Canada of -12.1%, the most among the top 10 visitor countries (see table), does not chime well with the fact that the Canadian dollar has year-to-date gained +10% on the Icelandic krona, the most of any of the currencies of the top 10 visitor source countries.
A weakened Icelandic krona would normally be perceived to be an encouraging factor for potential travellers to choose Iceland as a destination but does not seem to be the case currently. This suggests Iceland may well have reached its peak of overtourism and is now facing its second challenge of huge importance for the future: climate change.
An important message for anyone with Iceland on their bucket list is – hurry up! Due to climate change, time is sadly about to run out for visitors to experience Iceland’s wonderful nature and many attractions.
In July, Okjökull became the first Icelandic glacier to be lost to climate change. Scientists believe that all of the more than 400 glaciers in Iceland will be lost to climate change by the year 2200. The glaciers – losing 11 billion tons of ice mass every year – are the largest freshwater reserves on the planet and the disappearance of these in about 200 years will have a massive impact on hydroelectric power, fisheries, cultural heritage and tourism. There will also inevitably be an impact on duty free and travel retail trade in Iceland and elsewhere.
Rising temperatures not only represent a threat to glaciers in Iceland but to the many millions of people who live close to them around the globe. A few months ago reports suggested that Himalayan glaciers are melting at a dramatic rate. A further report in April warned that most glaciers in Central Europe, Western Canada and the USA could vanish by the second half of this century under current ice loss rates. In January, yet another report said that Greenland’s ice sheet is melting at such an accelerating rate that it could become a major factor in rising sea levels around the world within two decades – with catastrophic consequences for countries and cities in the danger zones.
Fast-rising sea levels along with excessive ground water extraction threaten, among others, major cities such as: Dhaka, Bangladesh; Shanghai, China; Jakarta, Indonesia; Mumbai, India; Venice, Italy; Malé, Maldives; Rotterdam, the Netherlands; Manila, the Philippines; Lagos, Nigeria; London, UK; as well as Houston, Las Vegas, Miami, New Orleans, New York and Phoenix in the USA.
The long pre-planned Global Climate Strike starts today (20 September), three days ahead of a UN emergency climate summit, and will last until 27 September. It is an initiative of young people around the world. The mobilisation among young and old and all ages in between is believed to be the biggest and most powerful climate demonstration ever, demanding an end to the age of fossil fuels and climate justice for everyone.
“Climate change is the greatest crisis humanity has ever faced, and it will affect our generation the most,” said Alexandria Villaseñor, school striker and founder of Earth Uprising. “That’s why at the global climate strike on 20 September, youth must lead the way and demand climate action now from our world leaders.”
