Core Insights - Iceland's tourism industry has experienced explosive growth, with international overnight visitors increasing from under 500,000 in 2010 to approximately 2.3 million last year, making tourism the largest source of foreign exchange income for the country [2][3] - The share of tourism in Iceland's GDP rose from 3.5% in 2010 to 8.1% last year, highlighting its significance in the economy [2] Growth Factors - The liberal market reforms initiated by former Prime Minister Oddsson in 2002 led to rapid privatization of state banks, resulting in a temporary economic boom and a 900% increase in the stock market from 2002 to 2008 [3][4] - The 2008 financial crisis prompted the Icelandic government to actively attract foreign tourists, capitalizing on the weakened currency and lower prices, making Iceland an attractive travel destination [4] - The 2010 volcanic eruption brought global media attention to Iceland, leading to a successful promotional campaign "Inspired by Iceland" that significantly boosted tourism from 2011 to 2014, with annual visitor numbers increasing by nearly 20% [5] Media and Film Industry Influence - Iceland's film production rebate policy, which has evolved to offer up to 35% reimbursement on production costs, has attracted major film productions, enhancing the country's international visibility [6] Strategic Airline Services - Icelandair's "Stopover" service allows travelers to stay in Iceland for 1 to 7 days without additional ticket costs, contributing to a 60% increase in passengers utilizing this service from 2012 to 2016 [7] Emerging Market Trends - There is a growing interest among Chinese tourists in exploring lesser-known destinations, with Iceland becoming a popular choice due to its unique natural landscapes [8] Current Challenges - Iceland faces challenges from overtourism, with some popular sites receiving nearly 6,000 visitors daily, risking damage to natural landscapes [9] - The government plans to reinstate a previously suspended accommodation tax to fund environmental protection efforts, as international visitor growth has slowed to 2% last year compared to over 30% in 2023 [9]