This year may present an opportunity for you to visit Iceland as opposed to recent years.
The recent bankruptcy and resulting collapse of WOW Air apparently had a significantly detrimental impact on the economy in Iceland — to the point where its central bank cut its main interest rate by half a point to four percent on Wednesday, May 22, 2019 — although it was not the only reason for the woes which the island country is currently facing.
2019 May Be a Better Year to Visit Iceland — Primarily Because…
The central bank of Iceland has “also said that the economy is now set to contract 0.4%, compared with a previous estimate for growth of 1.8%”, according to this article written by Ragnhildur Sigurdardottir for Bloomberg. “The announcement makes clear how badly Wow Air’s failure has hurt Iceland, which has also suffered from a disastrous fishing season. The airline had helped turn tourism into Iceland’s biggest cash cow, fueling a boom that dragged the nation out of its financial collapse more than a decade ago. Its demise in March spelled an abrupt end to that boom.”
The currency exchange rate has been affected, as you can purchase one United States dollar for 123.71 Icelandic króna. Last year at this time, that same dollar was only able to be exchanged for 105.46 Icelandic króna before sliding further to 104.12 Icelandic króna on Thursday, May 31, 2018.
The savings in the currency exchange rate may not be significant in terms of singular purchases of less expensive products and services. For example, I wrote in this article pertaining to visiting Laugarvatnshellar Cave that “Admission is 1,900 Icelandic króna per adult, which is approximately $15.87 in United States dollars; and 950 Icelandic króna per child, or approximately $7.93. The family rate of 4,900 Icelandic króna — or $40.93 — will accommodate up to two adults and three children, which represents a savings of up to 1,750 Icelandic króna.”
With the exchange rate today, that can be changed to “Admission is 1,900 Icelandic króna per adult, which is approximately $15.36 in United States dollars; and 950 Icelandic króna per child, or approximately $7.68. The family rate of 4,900 Icelandic króna — or $39.61 — will accommodate up to two adults and three children, which represents a savings of up to 1,750 Icelandic króna.”
That family rate represents a savings of a mere $1.32 — but it all adds up. Iceland is one of the most expensive countries in the world in which to purchase food — and if you are traveling as part of a family of four people, you also have to take into account any activities which require paid admission, a rental vehicle, and lodging costs.
For my stay of one night at the Canopy by Hilton Reykjavik City Centre, I paid a total of 27,905.50 Icelandic króna or United States $271.59. Assuming that the room rate remained the same, I would have paid $225.59, which represents a savings of $46.00. Now multiply that savings times additional nights…
…but keep in mind that the comparisons of exchange rates did not account for factors such as commissions and surcharges, which will erode your rate of return — nor for the fluctuating costs of goods and services in general. For example, the lowest room rate I can find for staying one night at the Canopy by Hilton Reykjavik City Centre is 35,369 Icelandic króna, which can be exchanged for United States $285.93. That is actually more expensive by $14.34 for the same date this year than in the previous year — but then again, I am seeking a room rate only one week from the time this article was written. I might have found a less expensive room rate had I searched a few more weeks in advance.
Also, airfares may be more expensive since the collapse of WOW Air — but not by all that much. Icelandair is offering nonstop flights round trip between New York and Reykjavik for as low as $362.83 — including all taxes and fees — for many dates later this year.
WOW Air offered an airfare of $45.00 one way to Iceland in February of 2019, which amounted to only $144.99 round trip — but that total did not take into account all of the ancillary fees which were not included. Fees were charged for virtually everything — from baggage to seat assignments to food.
Additionally, tourism to Iceland is expected to decline for the first time in more than a decade. That alone can be a compelling reason if you plan on visiting the more popular parts of Iceland — including the Golden Circle.
Summary
Rarely does the failure of a single company have enough of an impact to affect the entire economy of a country — even if only minimally — so not very many people predicted what was to happen with WOW Air and Iceland in general.
You can potentially save money by traveling to Iceland this year instead of in recent years — so now may be the best time to go there with fewer visitors and a more favorable currency exchange rate. If you decide to take this opportunity, do your research to ensure that you will indeed be saving money overall.
All photographs ©2018 by Brian Cohen.
