HALLDأ“R BENJAMأچN أ‍ORBERGSSON | SENIOR VICE PRESIDENT ... 3 NUMBER OF TOURISTS PER YEAR...

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  • CAPITAL MARKETS DAY HALLDÓR BENJAMÍN ÞORBERGSSON | SENIOR VICE PRESIDENT | ICELANDAIR GROUP

  • 2

    NUMBER OF TOURISTS ~ 800 K

    Ι Is there a call for concerns regarding number of tourists in Iceland?

    190 201 202 232

    263

    303 296 278

    320

    360 374

    422

    485 502 494 487

    566

    672

    781

    1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

  • 3

    NUMBER OF TOURISTS PER YEAR

    Ι Around 800 thousand total tourists arrivals last year.

    800,000 PER YEAR

    = 1,000 visitors

  • 4

    # TOURISTS IN ICELAND PER SUMMER DAY

    Ι On average there were around 45K tourists in Iceland

    on any given summer day 2013.

    45,000 EACH

    SUMMER

    DAY

    = 1,000 visitors

  • 5

    # TOURISTS IN ICELAND PER WINTER DAY

    Ι On average there were around 10K tourists in Iceland

    on any given winter day in 2013.

    10,000 EACH WINTER DAY

    = 1,000 visitors

  • THE BIGGER PICTURE

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    50

    2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

    Summer (Jun-Aug) Winter (Sep-May)

    Ι Average number of tourists on any given day in Iceland

    Our own calculations

    In thousands

  • HEAD COUNT IN ICELAND IN THE SUMMER TIME

    0

    50

    100

    150

    200

    250

    300

    350

    400

    2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

    Ι Average number of persons in Iceland in the summer time

    Tourists

    Icelanders

    ∆ 30,000

    ∆ 36,000

    325k

    45k

  • THE NET EFFECT IS EVEN SMALLER

    Ι Luckily, Icelanders travel abroad in the summer time.

    Ι On average, there are ~20 thousand Icelanders abroad on any given day in the summer.

    Ι Therefore, the net effect is much smaller

    Ι Best estimate

    +25K to total population

    Ι 325 + 25 = 350 K as total headcount

  • 7% EFFECT ON DOMESTIC HEADCOUNT AT PEAK

    13.222 19.203 24.343

    -

    50.000

    100.000

    150.000

    200.000

    250.000

    300.000

    350.000

    400.000

    2012 2013 2014

    Marginal addition of tourists net of Icelanders abroad Iceland population

  • TOURISTS PER NATIVE?

    Ι Is that a helpful measure?

    Ι At best Iceland is placed at the middle of the league of nations with population < 5 million.

    0

    5

    10

    15

    20

    25

    30

    Andorra

    Monaco

    Iceland San Marino

    Croatia

    Source: World Bank

  • 103,000 KM2

  • TOURISTS PER SQUARE KILOMETRE

    0

    50

    100

    150

    200

    250

    300

    350

    400

    Luxembourg Netherlands Cyprus Switzerland Denmark Croatia France Sweden Iceland Honduras

    Source: World Bank

  • 10,300 km2

    LET‘S BE MORE FAIR IN OUR APPROACH

    Ι Let’s exclude 90% of the land mass due to dense population and rough terrain

  • LET‘S BE MORE FAIR IN OUR APPROACH

    Ι Let’s exclude 90% of the land mass due to dense population and rough terrain

    0

    50

    100

    150

    200

    250

    300

    350

    400

    Luxembourg Netherlands Cyprus Switzerland Denmark Croatia France Iceland, 90% exluded

    Sweden Iceland Honduras

    81

    Source: World Bank

  • 3,000 km2

    … OR TAKE IT TO THE EXTREMES

    Ι Let’s exclude 97% of the land mass due to dense population and rough terrain

  • … OR TAKE IT TO THE EXTREMES

    Ι Let’s exclude 97% of the land mass due to dense population and rough terrain

    0

    50

    100

    150

    200

    250

    300

    350

    400

    Luxembourg Netherlands Iceland, 97%

    excluded

    Cyprus Switzerland Denmark Croatia France Iceland, 90% exluded

    Sweden Iceland Honduras

    268

    Source: World Bank

  • PREVALENT WORDS ABOUT ICELAND ARE POSITIVE

    Ι The overall conversation is positive. We do not see terms like sold out, congestion, spoiled, or expensive.

    Ι Iceland has mainly positive mentions

    Ι Tourists are simply not talking about congestion in Iceland or at Iceland’s top tourist sites

    Source: Ubervu

  • WE CAN ALWAYS DO BETTER

    Ι Golden Circle with thousands of guests per day.

    Ι Need to manage traffic better at top sites – number of tourists is not the problem – lack of management and infrastructure

    Ι Urge use of market mechanisms with price as the incentive for changed behaviour key to success.

    Ι Number of tourists should ideally continue to increase.

  • WELCOME MORE GUESTS:

    ECONOMICALLY BENEFICIAL FOR US ALL

    HE PROFITS FROM IT …

    … SO DOES SHE

  • TOURISM & AVIATION LOCOMOTIVE OF GROWTH

    -45%

    -29%

    -14%

    -6%

    -4%

    -3%

    0%

    1%

    -50% -40% -30% -20% -10% 0% 10%

    Construction

    Finance

    Retail and wholesale

    Other

    Tourism and transportation

    IT and telecommunications

    Fisheries

    Metal production

    60%

    11%

    11%

    10%

    10%

    9%

    -2%

    -8%

    -20% -10% 0% 10% 20% 30% 40% 50% 60% 70%

    Tourism and transportation

    Other

    Fisheries

    Construction

    Retail and wholesale

    IT and telecommunications

    Metal production

    Finance

    Ι Contribution to economic downturn 2008-2010 Ι Contribution to economic growth 2010-2013

  • TOURISM IS THE SOURCE OF GROWTH

    -5%

    -4%

    -3%

    -2%

    -1%

    0%

    1%

    2%

    3%

    4%

    2010 2011 2012 2013

    Economic growth excluding tourism Economic growth with tourism

    Ι Limited economic recovery if we exclude tourism

  • 7% GDP ADDITION SINCE 2010

    90

    92

    94

    96

    98

    100

    102

    104

    2009 2010 2011 2012 2013

    GDP with tourism GDP excluding tourism

  • WHAT DOES THIS ALL MEAN?

    Ι Iceland is not sold out – we are far from reaching our upper limit

    Ι The upper limit is not static – it is dynamic and evolves and expands over time

    Ι However, we can smooth the transition by focusing on managing peek sites better

    Ι Tourism is the locomotive of the Icelandic economy