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Hotel Prices Increase By 60 Percent

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Hotel Prices Increase By 60 Percent

The price of hotel accommodation has increased around 60 percent in foreign currency over the last two years, Fréttablaðið reports. According to Gústaf Steingrímsson, economist at Landsbankinn bank, both high demand from tourists and increased wages in the hotel industry have had an effect on the price of accommodation. The strong appreciation of the króna accounts for only half of the increase.

Gústaf stated in a conversation with Fréttablaðið that the utilization of hotel rooms has been so good that hotel managers could afford to raise prices. He added that utilization of hotel rooms in the capital area has been generally improving over the past two years, and is very good in comparison with other cities in the world.

The Landsbankinn Economics Department calculated that tourists’ average length of stay was 1.8 nights over the past six months, and has been getting shorter every year for the past five years. The department points to rising prices in foreign currency and that tourists may be opting for cheaper accommodation or home stays.

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