Few places on earth offer the same sense of remoteness, connection and tranquility as Iceland.
That essential Iceland experience has a marked effect on hotel guest length of stay, on-property spend and excursion add-ons, according to Óskar Vignisson, general manager of the 79-room Black Sand Hotel. The property is scheduled to open later this month on a peninsula in the Ölfus region of Iceland where the Ölfusá River reaches the Atlantic Ocean.
The Black Sand Hotel has been designed to harmonize with the black-sand volcanic beach and raw beauty of Iceland’s south coast, Vignisson said. And it's been an 11-year process to open the oceanfront hotel.
“One of the owners, when he acquired land of the hotel, saw an opportunity and had a vision to open the first beachfront hotel here. Design took some turns, and there was a lengthy process of development,” he said. “At one stage we were supposed to be double the room count, but the cost of that is quite significant, and we did not want to risk the area’s effect and personality.”
The Black Sand Hotel, which includes nine suites, is mainly on one floor, a design effect that permits the contours of the landscape and hotel to meld.
Another gap its owners and hoteliers saw was opening up Iceland’s southern shores to guests, travelers and explorers in cooperation with tourism bureaus and tour operators.
“We are targeting bookings that have the hotel being a base for South Shore exploration, and tour operators agree with the notion that this is a more scenic route from [Keflavik International] airport than is the route to Reykjavik, and a less busy one. We’re anticipating an average stay of two to three nights,” he said.
Weather plays a huge part in hotel management in Iceland, Vignisson said.
“It affects daily operations and requires short-term flexibility. Those do affect revenue and profit margins, so higher [average daily rate] is targeted, the premium experience. We just have to be more considerate in how we offer value. We are mindful of the fragility of our environment,” he said.
Construction of the Black Sand Hotel started in spring 2023.
“It moved to full-on in the middle of 2024. It was quite a process, a little more than we planned in some cases. Challenges are related to the infrastructure, as there is nothing else around us,” Vignisson said. “We had to lay our own water pipes and electricity lines. We were really blessed to have the complete cooperation of the municipality.”
Iceland heavily relies on tourism, so external factors such as economics, foreign-exchange fluctuations and ongoing wars often have a trickle-down effect on demand. That noise also has the effect of framing Iceland as the perfect escape.
“This is a truly unique setting, and we have the ability to create a memory. To hear the wows fuels what we do. There is the solitude, and being meters from the ocean, we have the calm. Guests can disconnect,” Vignisson said.
Being remote also allows Black Sand Hotel to provide offerings that boost in-house spending, such as an on-site restaurant and a spa.
Youthful tourism
Tourism in Iceland is relatively young, no more than 20 years old in any form that could be recognized today, Vignisson said.
“We feel we are young, but now there is the education and experienced, and we can take on a lot more. Reykjavík now is taking on more groups,” he said.
Vignisson has been in hospitality for almost 15 years, starting in the traditional manner with roles in housekeeping and food and beverage. He helped open one of Iceland’s first international hotels, the 50-room Reykjavik Konsulat Hotel, Curio Collection by Hilton, during the first wave of branded hotels in 2017 and 2018. He also worked in hotels internationally, notably at the 231-room Le Méridien Barcelona.
For four years, Vignisson marketed and planned tourism in Iceland’s largest national park, Vatnajökull, a few hours’ drive along the same coast as Black Sand Hotel.
Among Iceland's other tourism-related wins, Icelandic Air has a new route to Miami, which began on Oct. 25 and will open Iceland up to the South American continent. United Airlines also plans to fly daily Iceland routes year-round to Washington, D.C. Lastly, Vignisson anticipates more flight routes connecting Iceland to mainland Europe.
Reykjavík also has a healthy pipeline of hotels, including properties from Hyatt Hotels Corp., IHG Hotels & Resorts and Marriott International opening in the next few years.
One potential pitfall for Iceland's hotel and tourism growth could have been labor, but it turned out this was not a headache for the Black Sand Hotel, Vignisson said.
“We thought [labor] would be more challenging. We opened applications for 10 positions and received 300,” he said.
He emphasized that the hotel wanted to employ locals.
“There are a few towns within [a drive of] 20 minutes. For all staff, our only firm rules were that they would relocate and have a driving license. Fortunately, there is plenty of housing hereabouts,” he said.
Bringing employees remote areas of Iceland presents a difficulty in that no one wants to see too much development. The fear is that Iceland — and in particular the Black Sand Hotel's Ölfusá Delta and Flói regions — erode what it is that makes it so special.
“Here, you feel you are in another planet. There is no light pollution. It is an up-and-coming region in terms of tourism, a little bit of a lost area that now is being discovered. Even by locals,” he said.
Guests are discovering Iceland in shoulder and off-seasons, too.
“Iceland has been marketing winter and the shoulder season specifically. In our location, there are domestic opportunities for local travelers, weekend escapes and group travel from Reykjavík and elsewhere,” he said.
One of Vignisson's favorite areas of Iceland is the region in which his father grew up, Kirkjufell, northwest of Reykjavík. It is such origins — shared by most Icelanders — that he said are ingrained in hoteliers to provide guest education, thoughtful tour organization and environmental safeguards.
“During construction we saw there are Arctic terns nesting here. We are protecting them,” he said.