Figure 2.28 The demand for tourism services and the appreciation of the Króna have again made Iceland as one of the most expensive destinations. Relative Prices of Restaurants and Hotels European Union=100
EU
Iceland
Denmark
Norway
Finland
Switzerland
Sweden
200 180 160 140 120
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
0
2003
100
Sources: Eurostat; Central bank of Iceland; Iceland Chamber of Commerce
Figure 2.29 Reykjavík has become one of the most expensive cities in the world to live in Cost of Living Index Index (New York = 100)
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Reykjavík
Copenhagen
New York
London
130
Price increases in tourism related services and a 24% appreciation of the Króna in the last five years are putting a lid on the growth.
120 110 100 90 80
0 2011
2012
2013
2014
2015
2016
2017
2018
Sources: Numbeo; Landsbankinn; Iceland Chamber of Commerce
The next few months and years will set the tone for how Iceland’s largest export will fare in a new landscape.
Breidd grafs: 18cm // Hæð milli action og lýsitextar: 0,9cm Finally, price increases in tourism challenges for the tourism sector. The related services and a 24% appreciation next few months and years will set the of the Króna in the last five years are tone for how Iceland’s largest export putting a lid on the growth.25 Iceland will fare in a new landscape. It is also an opportunity to set the foundations is now among the most expensive for a moderate growth with focus destinations in the world (Figures 2.28 on productivity, rather than capacity and 2.29), reflecting the market forces increases. of supply and demand at play. This has halted the tourism boom and created 25 Trade weighted index, 12 July 2013 to 13, July 2018. 54
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