Tourism explosion in Iceland calls for restricted Airbnb rules

Published on : Monday, May 30, 2016

icelandWith increased number of visitors in Iceland, a proposed legislation can turn into a new law which states that residents can offer Airbnb rentals in their properties to 90 days a year before they must pay business tax.



This newly proposed law might take its due course as it is trying to balance the record tourist numbers to its spectacular unspoilt landscape and traditional lifestyle.



The island’s 335,000-strong population is set to welcome 1.6 million visitors this year as per the latest reports, which marks as much as 29% increase than the last year. And, the glaciers, fjords, lava fields, hot springs, hiking trails and midnight sun are the major contributing factors which will draw this unconventional crowd to Iceland. In fact, the rapid rise in visitors also includes the fans of Game of Thrones, a popular international TV series, who are flocking to the drama’s shooting locations.



Tourism has been the salvation of the North Atlantic Island where the economy, built on fishing, was seriously damaged after the catastrophic collapse of its banking industry in the 2008 global recession.

Many Icelanders are cashing in through Airbnb along with the plethora of new hotels that are being constructed to keep up the pace of the tourist influx. Short-term rental websites are also opening at central Reykjavík where majority of tourists stay.



According to one of the latest report, it estimates a 124% increase in Airbnb rentals in one year, with more than 100 flats available on the capital’s main street alone. The result has been a dramatic increase in house price in central Reykjavík, and a paucity of long-term rentals.



The ratio of short-term holiday lets to properties in the central capital was “really high” compared with other countries with larger populations, one of the specialists commented.



In April, the Supreme Court ruled that anyone in an apartment block needed permission from other residents before renting their apartment through Airbnb. Two municipal councils, Kirkjubæjarklaustur and Vík í Mýrdal, have already implemented measures to restrict short-term tourist accommodation. The latter reportedly has rooms for 1,300 guests, but a population of just 540. The director of the Icelandic Tourist Board said that Icelanders were positive towards visitors and tourism itself, despite some concerns. She said the legislation was not an attempt to ban Airbnb as there are many tourists who prefer the stay than hotels but will help to establish control and also follow a set of rules pertaining to the tourism sector.


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