Reykjavík Prepares for Future Demand with New Hotel Projects

2026-02-05 - 12:37

Hotel capacity in the capital region is set to increase in the coming years, even as recent figures show a seasonal decline in guest numbers. Data from Statistics Iceland indicate that hotel overnight stays fell by just over 11% in December compared with the same month a year earlier, marking the third consecutive monthly decrease. What's the Story? Hotel capacity increasing in Reykjavík and South Iceland with multiple new projects under way December overnight hotel stays down 11% year-on-year, according to Statistics Iceland American guests down 26% and Chinese guests up 23% Construction in the Capital. Photo: Golli Tourism Trends Shift Breakdowns by nationality show differing trends among key visitor groups. RÚV reports that American visitors, traditionally the largest group of foreign guests, declined by nearly 26%, while arrivals from China rose by 23%. Foreign travellers account for the vast majority of hotel stays in Iceland. Despite the winter slowdown, development continues. In Reykjavík there are currently around 5,600 hotel rooms, with several new projects under way along Laugavegur, Skúlagata and Borgartún, as well as near Hlemmur. Growth has also been notable in South Iceland, where room numbers have increased across multiple properties. Kristófer Oliversson, chair of the Icelandic Hotel and Hospitality Association and CEO of Centerhotels, has highlighted winter performance as a concern but maintains that demand for quality accommodation remains. He has also pointed to wider market factors, including changes in flight schedules and the collapse of Play.