Iceland Mag

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Iceland Mag

Economy

Tourist spending down by 10% per visitor, "puffin shops" hardest hit

By Staff

  • Window display in a downtown souvenir shop Icelanders refer to these kinds of stores as "puffin stores", because they tend to sell a lot of puffin-themed merchandize. Photo/Stefán.

While tourist spending continues to grow as the number of foreign visitors in Iceland continues to grow, each visitor is spending less. According to data from The Center for Retail Studies at the University of Bifröst visitors in August of this year spent on average 10% less than the average visitor spent in August of 2016. Total spending by foreign visitors was nonetheless up by 6.2% year over year.

Less spending on puffin store knickknacks
According to counts by the Icelandic Tourism Board the number of foreign travellers who visited Iceland in August was 284,124, an increase of 17.6% over August 2016. The increase in spending by foreign visitors therefore lacks significantly behind the increase in numbers. Data from the Center for Retail Studies shows that each visitor spend on average 115,000 ISK (1100 USD/925 EUR) during his stay, a drop of 5.7% over July of this year and a 10% drop over August last year.

Read more: More signs growth in tourism is starting to level off: Only 2% increase in hotel stays

The largest decrease is seen in spending at souvenir shops, known to Icelanders as "puffin shops". Spending at puffin shops dropped by 17.1%, compared to "other retail" which dropped by 10.5%. While visitors seem to be cutting back on souvenirs and cuddly puffin toys spending at restaurants does not drop. In fact spending at restaurants increased by 4.8%. Spending at hotels also increased by 11%.

The Center for Retail Studies uses data on foreign credit card spending to track the spending by foreign travellers. The center points out that the data has its limitations. It does not capture payments made prior to the visit, for example pre-booked hotel rooms or tours paid by phone, nor does it capture services or goods paid for with cash. 

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