Icelanders streaming to Boston

It is predicted that over 5,000 Icelanders will visit Boston this season — the vast majority on Christmas shopping trips. The American city has seldom, if ever before, been so popular among Icelandic travellers.

The years 2006 and 2007 were record breakers for Icelandair flights to the USA; but demand crumbled following the banking crash of 2008 — especially for Christmas shopping trips. The depression was short-lived, however, as demand began to increase again last year and is higher still this year.

Guðjón Arngrímsson, Icelandair’s information officer, told RÚV that Boston is particularly popular this year and that although December figures are not yet available, it seems as though over 5,000 Icelanders will have flown to the city in October, November and December. Guðjón says Boston’s popularity has taken the company by surprise and that it is clearly a result of word-of-mouth that it is a cheap place to go shopping.

In fact Christmas shopping is not just happening in shops. Icelanders are also buying online and having their purchases delivered to their hotels before they arrive. The phenomenon has become so widespread that many hotels have started charging commission if guests have more than one package delivered by post.

It is noteworthy that so many Icelanders find it financially preferable to buy their Christmas presents overseas at a time when the value of the Icelandic króna is still significantly lower than before the banking crash. The Association of Icelandic Retailers recent called on the government to cut VAT in the country to make shops in Iceland more competitive. Internet sales to Iceland are also hampered by the extremely high import tariffs charged by Customs which often make cheap foreign goods more expensive than they are in Icelandic shops.

People shopping for Christmas presents like clothes, toys and electronics for large families, do indeed often find that the price difference makes a trip overseas worthwhile for Icelanders. Foreigners in Iceland, however, are still benefiting from the weakness of the króna and purchase tax refunds for tourists which mean shopping in the country can still be cheap — especially on designer brands.

Despite the popularity of Boston this year, thousands of Icelandic shoppers are also streaming to cities like London, New York, Berlin and Copenhagen, while retailers inside the country continue claiming this means there is something wrong with the system.