Iceland’s Tourism Suffers Amid a Belching Volcano and Flowing Lava

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In a country that relies heavily on visitors, hotels faced repeated evacuations, and one resort was temporarily shut.

The Blue Lagoon resort in the south of Iceland is a scenic network of steaming azure pools surrounded by dark rocks, where tourists dip in the geothermal water, have spa treatments and enjoy what the resort advertises as “a universe of radiant well-being.”

But last week, a stream of radiant lava burst from a crater a few miles from the resort, forcing it to evacuate hundreds of guests, in yet another eruption of a volcano system in the Reykjanes Peninsula that had been dormant for 800 years.

The outbursts began in 2021, and the eruptions and earthquakes in the peninsula have destroyed some houses and forced villagers from their homes. One construction worker went missing in the town of Grindavik after falling down a crack caused by an earthquake.

The effects of the volcanic eruptions have rippled out beyond the peninsula, disrupting the tourism operations of a country that relies heavily on visitors.

Arnar Már Ólafsson, director general of the Icelandic Tourist Board, said that when a looming volcanic eruption led to the evacuation of Grindavik in November, it resulted in global anxiety that brought a drop in tourists.

“A spouting volcano doesn’t sound very inviting,” he said.

Icelandair, the country’s national airline, said it also saw a “significant negative impact on bookings” in the last months of 2023. And the low-cost Icelandic airline Play said that news of the eruption “cooled demand for Iceland as a destination.”

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