Package Holidays - Iceland

Iceland

Highlights

By 2024, the Package Holidays market in Iceland is predicted to generate a revenue of US$59.84m.
The market is expected to grow with an annual growth rate of 4.47% (CAGR 2024-2029), resulting in a projected market volume of US$74.48m by 2029.
In Iceland, the number of users in this market is expected to reach 68.61k users by 2029, with a user penetration of 15.3% in 2024, which is expected to increase to 17.7% by 2029.
The average revenue per user (ARPU) is expected to be US$1.04k.
Furthermore, 84% of the total revenue in this market will be generated through online sales by 2029.
When looking at the global comparison, the highest revenue is expected to be generated China, amounting to US$49bn in 2024.
Iceland's package holiday market is booming due to its unique natural wonders, including glaciers, hot springs, and the Northern Lights.

Key regions:

Market definitionIn-Scope/Out-of-scopeMarket structureReportsMethodology

The Package Holidays market in Iceland has been experiencing notable growth and development in recent years.

Customer preferences: Travelers in Iceland are increasingly seeking convenience and ease when planning their holidays, leading to a rise in demand for package holidays. The all-inclusive nature of package holidays, which typically include accommodation, transportation, and activities, appeals to customers looking for a hassle-free travel experience. Additionally, package holidays often offer competitive pricing compared to booking each component separately, making them an attractive option for budget-conscious travelers.

Trends in the market: One prominent trend in the Icelandic package holidays market is the growing interest in experiential travel. Travelers are looking for unique experiences that allow them to immerse themselves in the local culture and natural beauty of Iceland. As a result, tour operators and travel agencies are expanding their offerings to include activities such as glacier hiking, ice cave explorations, and traditional Icelandic food tastings. This trend towards experiential travel is driving innovation in the package holidays market, with companies designing curated experiences to cater to the evolving preferences of travelers.

Local special circumstances: Iceland's unique geography and natural attractions play a significant role in shaping the package holidays market in the country. The country's stunning landscapes, including geothermal hot springs, volcanic craters, and cascading waterfalls, make it a popular destination for outdoor enthusiasts and nature lovers. Tour packages that highlight Iceland's natural wonders and offer opportunities for adventure activities have been particularly well-received by tourists. Additionally, Iceland's compact size and well-developed tourism infrastructure make it easy for travelers to explore the country's top attractions within a short period, further boosting the demand for package holidays.

Underlying macroeconomic factors: The growth of the package holidays market in Iceland is also influenced by broader macroeconomic factors such as increasing disposable income and a strong focus on tourism promotion. As disposable incomes rise, more Icelanders are able to afford leisure travel, contributing to the overall demand for package holidays. Furthermore, the Icelandic government has been actively promoting tourism as a key driver of economic growth, leading to investments in tourism infrastructure and marketing efforts to attract international visitors. These initiatives have helped raise the profile of Iceland as a travel destination and have contributed to the expansion of the package holidays market in the country.

Data coverage:

The data encompasses B2C enterprises. Figures are based on bookings, revenues, and sales channels of package holidays.

Modeling approach:

Market sizes are determined through a bottom-up approach, building on a specific rationale for each market. As a basis for evaluating markets, we use financial reports, the Global Consumer Survey, third-party studies and reports, data from industry associations (e.g., UNWTO), and price data of major players in respective markets. To estimate the number of users and bookings, we furthermore use data from the Statista Consumer Insigths Global survey. In addition, we use relevant key market indicators and data from country-specific associations, such as country-related GDP, demographic data (e.g., population), tourism spending, consumer spending, internet penetration, and device penetration. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, ARIMA, which allows time series forecasts, accounting for stationarity of data and enabling short-term estimates. Additionally, simple linear regression, Holt-Winters forecast, and exponential trend smoothing methods are applied. A k-means cluster analysis allows for the estimation of similar countries. The main drivers are tourism GDP per capita and respective price indices.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change.