What Growth in Tourism Means for Iceland’s Rental Industry

International visitors traveling to Iceland from 2011 to 2015. Chart courtesy of Auto Europe.
International visitors traveling to Iceland from 2011 to 2015. Chart courtesy of Auto Europe.

Today, Iceland can claim its spot as king of the “hot destinations” hill. Its steady progression up the tourism ladder makes it seem like something more than just a passing fad.

According to a recent report from the official Tourist Board of Iceland, international tourism to the country was up 30% from 2014-2015 and has more than doubled in the past five years.

A majority of these visitors came from the U.S. (20% of total), tailed closely by visitors from the U.K. (19% of total) and Germany (8% of total).

Iceland has become popular as a destination that’s unique from the typical European experience, and auto rentals have prevailed as the preferred way to travel about the country.

In most tourist destinations, travelers are typically presented with a range of options in local transportation. While trains, taxis, buses, and even ferries all compete against car rental in countries like France and Italy, public transit is not nearly as established in Iceland.

Having a private vehicle is a key factor in visiting many of Iceland’s most famous attractions, and the numbers seem to prove it.

At Auto Europe, net bookings from the U.S. for vehicle rentals in Iceland grew 195% from 2011 to 2015 — a trend that mirrors the 127% growth in international visitors traveling to Iceland during the same period.

The need for car rentals in Iceland has been skyrocketing, and a look at Google Trends data confirms that more people are searching online for car rentals in Iceland than ever before.

Interest in "Car Rental Iceland" queries from 2011 to 2016. Courtesy of Google Trends Graph.
Interest in "Car Rental Iceland" queries from 2011 to 2016. Courtesy of Google Trends Graph.

One of the more intriguing aspects of Iceland’s growing car rental market is the types of vehicles that are in demand. Most tourists visit Iceland to explore its landscape.

While the Colosseum and Tuscan hillsides inspire travel to Italy, volcanoes and waterfalls draw travelers to Iceland. Touring these natural attractions involves driving on dirt and gravel roads where four-wheel-drive is required.

At Auto Europe, we’ve observed that 4x4, SUVs, and campervan rentals have accounted for nearly 30% of total rental bookings in Iceland over the past five years (37% in 2015 alone).

Here are some key takeaways on tourism and car rental in Iceland:

• Demand for auto rentals is rapidly increasing (195% growth over five years among destination Iceland bookings at Auto Europe).

• Travelers from the U.S. and U.K. make up the largest portion of incoming visitors (20% from the U.S. and 19% from the U.K.).

• Most U.S. travelers visit in the summer months while most U.K. travelers visit in the fall and winter months.

• 4x4 vehicles and camper vans are the most sought-after vehicle categories (making up 37% of all Iceland bookings in 2015 at Auto Europe).

By Chris Slesarchik, SEO specialist at Auto Europe

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