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Sustaining nature-based tourism in Iceland

Douglas Sutherland and Jane Stacey

No 1422, OECD Economics Department Working Papers from OECD Publishing

Abstract: Iceland has been experiencing a tourism boom. The number of tourists visiting annually quadrupled between 2010 and 2016 and shows continued strength. The tourism sector is now the major export earner and is also creating new jobs and supporting new businesses. The government budget has also benefitted from high tax revenues. The surge in tourism supported growth after the crisis and the sector has become a major pillar of the economy. But, the breakneck growth of tourism has created a number of challenges. Growing pains have emerged as accommodation supply has lagged in the wake of unexpectedly large number of tourists, contributing to pressure on the local housing market. The environment, particularly in some popular sites, has also come under pressure. The government has reacted to these environmental and social impacts and has worked with the industry to agree on a path forward. Sustaining a nature-based tourism for Iceland will require more coordinated policy across government and a long-term strategic plan that builds on Iceland's strengths. Protecting the unique environmental attractions of Iceland - while mitigating adverse social impacts - will lay the basis for the healthy development of a new important sector. This working paper relates to the 2017 OECD Economic Survey of Iceland (http://www.oecd.org/eco/surveys/economic-survey-iceland.htm).

Keywords: environment; growth; housing; sustainabile development; Tourism (search for similar items in EconPapers)
JEL-codes: F64 O44 Q56 R31 Z32 Z38 (search for similar items in EconPapers)
Date: 2017-10-11
New Economics Papers: this item is included in nep-cta, nep-env and nep-tur
References: Add references at CitEc
Citations: View citations in EconPapers (5)

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