Iceland, known for volcanoes, glaciers and the northern lights, is becoming a booming tourism destination as we wrote in the most recent Sojern Data Point column. The country has seen an impressive increase in tourism, with the number of people visiting Iceland each year surpassing its total population. At Sojern, we wanted to focus on Iceland tourism in order to understand its recent successes and the potential causes.
Creativity drives growth
Our data revealed that Iceland is an emerging market for the U.S., showing a 148% increase in interest for all of the U.S. at the beginning of this year compared with last (January to April 2015 vs. all of 2016) as we reported in our previous column. Comparing the Icelandic Tourism Board's reported growth in U.S. visitors in January and February over the last six years, there's another picture of Iceland's emerging status for U.S. travelers: From 2010 to 2015 the increase consistently hovered around 30%, with one minor drop in 2013, mostly likely due to the financial crisis. In 2016, however, travel to Iceland has skyrocketed, increasing 81%.
Seeing numbers such as these, the first questions to ask are "Why?" And "What can I learn to inspire outsize growth in my business?" Besides a general upturn in the economy, Icelandair in particular made some creative moves in its campaigns in ways most airlines have not.
Icelandair has run a stopover campaign for the last 56 years, enabling U.S. travelers to stay in Iceland for up to seven nights without any additional airfare costs. Most recently, Icelandair stepped up its advertising for this campaign, including a Stopover Buddy in its promotions.
The Stopover Buddy is an Icelandair employee who will, for no additional charge, take a traveler around Iceland, serving as a personal tour guide. What's even better is that the airline has classified the guides into categories. Like outdoor adventures? Get a lifestyle guide. Want to take in some great wine and cheese? Get their food guide. No matter what your vacation preference, it will pair travelers with an Icelandic native guide.
The Stopover Buddy campaign ran from February to April 2016 and seems to be in large part responsible for the meteoric rise in travel to Iceland. Is there anything you want to see but don't find offered? If you tell the airline, it will come.
New routes mean big business for Iceland
In mid-March 2016, Icelandair opened a new route from Reykjavik to Chicago. This, coupled with the Stopover Buddy campaign, delivered huge results for bookings to Iceland. The country took the top spot for emerging destinations from Chicago. Not only that, it dominated with an increase in intent of 152%. The next closest, Ukraine, saw an increase of 70%, while the last five spots in the top 10 list all saw around a 30% increase.
Iceland didn't merely shine as an emerging market, but thanks in large part to the new route, it blew the rest of the competition out of the water.
Driving consistent interest and changing the off-season
Icelandair's creativity as well as its well-timed expansion obviously paid off in the opening months of 2016. But how do we know if that will continue?
As it turns out, Icelandair wasn't the only one running campaigns during the off-season. Icelandic low-fare carrier Wow Air also ran a sale for its routes from Los Angeles and San Francisco, offering $99 tickets to Iceland. In order to look at the different effects of both campaigns, we isolated the origin cities of each airline so that we could better understand and contrast them.
The two airlines' routes have little overlap: Wow Air only flies to Iceland out of Los Angeles, San Francisco, New York, Boston and Washington. Icelandair doesn't fly out of Los Angeles or San Francisco and has dozens more routes to Iceland. Parsing traffic from cities going to Iceland, then, gives us a solid picture of the different impact of campaigns.
Both airlines ran their campaigns in January, and we saw interest grow in both company's origin cities. During the week of their campaigns, Wow cities hit a 70% increase in searches compared with the week before, whereas Icelandair cities only hit a 35% increase. Wow's increase in searches, however, only lasted one week, whereas Icelandair maintained its interest for two weeks.
Following the January campaign, up until May 2016, bookings for Wow cities returned to their averages from last year, while Icelandair enjoyed a sustained increase of 18% in bookings. It seems that many travelers were interested when they heard about Wow's sales, hence the higher interest in searches. But unlike Icelandair's efforts, it didn't translate into sustained interest in travel.
Learning from Iceland
Sales events are a tried-and-true way of increasing your market share, but they aren't necessarily long-lasting in their effects. Doing something truly creative, such as the Stopover Buddy, can produce longer lasting and monumental changes in a market. While everyone doesn't have the time or resources to undertake such an elaborate campaign, there is still something to be learned from it.
At its core, the campaign looked to show tourists the different facets of a culture, to give experiences rather than just amenities. It's also a campaign that is about welcoming tourists and making them feel like they belong.
Using those guiding principles, it's certainly possible to create similar, smaller moments in our travel marketing efforts. With the Stopover Buddy campaign coming back in the fall, Iceland is poised to continue its growth and continue enjoying the return from its creative travel marketing.