Farmer volcano and flowing lava dent tourism in the Icelandic region

The Blue Lagoon resort in southern Iceland is a picturesque network of steaming azure pools surrounded by dark rocks, where tourists dip in the geothermal waters, receive spa treatments and enjoy what the resort advertises as ‘a universe of radiant well-being’ .

But last week, a stream of radiant lava erupted from a crater several miles from the resort, forcing the resort to evacuate hundreds of guests, in yet another eruption of a volcanic system on the Reykjanes Peninsula that has been dormant for 800 years.

The eruptions started in 2021, and the eruptions and earthquakes on the peninsula have destroyed some houses and displaced villagers from their homes. One construction worker went missing in the city of Grindavik after falling into a crack caused by an earthquake.

The effects of the volcanic eruptions have spread beyond the peninsula, disrupting tourism activities in a country that relies heavily on visitors.

Arnar Már Ólafsson, director general of the Icelandic Tourist Board, said that when a threatened volcanic eruption led to the evacuation of Grindavik in November, it resulted in global unrest, causing a drop in tourist numbers.

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

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

The Tourism Board has not released an estimate of the financial losses, and the airlines, while saying they have experienced significantly slowed revenue, have not quantified them.

Airline officials and the director of the Bureau of Tourism emphatically stated in interviews and in national news media that the response was unwarranted because the eruptions posed no immediate threat to visitors or flights. They accused the news media of “alarmism.”

“The international press makes it seem like Iceland is ruined,” said Birgir Jónsson, CEO of Play at the time, said in an interview published in December by a financial magazine.

Tourists used to flock to the Reykjanes Peninsula to view the Northern Lights or bathe in the waters of the Blue Lagoon resort. But since the earthquakes in November, the Blue Lagoon had to close for a few days. It said in a statement on Wednesday that it was also closed from March 16 until at least Thursday and would continue to follow authorities’ safety guidelines.

The Northern Light Inn, a family-owned hotel, has had to evacuate its guests four times since January and close for weeks, said Fridrik Einarsson, the inn’s owner. Now they are compensating for the drop in tourists by serving lunches to the construction workers building protective walls in the area.

“If this continues for a long period of time, it will ultimately be a very, very challenge for us,” said Mr Einarsson.

Mr Ólafsson said any threat to the Blue Lagoon geothermal resort undermines an important part of Iceland’s tourism industry.

“Without the Blue Lagoon it would be a different destination,” he said, “like Egypt without the pyramids or Paris without the Eiffel Tower.”

The resort is especially popular with visitors from the United States, and according to the Blue Lagoon website, hundreds of thousands of people visit the spa every year. The spa is now protected by barriers.

The resort owes its existence to the geothermal energy generated by the volcanic system, which heats the water. But that same system is now also the biggest threat.

Many say this paradox is at the heart of Iceland’s identity as an adventure travel destination where tourists seek out untouched nature in the form of waterfalls, glaciers and hot springs. And 130 volcanoes.

During last year’s volcanic eruptions, when tourists flocked to places where they could see the glowing river of lava, the government had to warn people to avoid the area as the situation could become dangerous.

Now concerns have subsided somewhat, Icelandic tourism operators say, and demand for tourists has risen again since January. But for those left on the peninsula, there appears to be no immediate end in sight to the disruption of their businesses.

When Mr. Einarsson, the inn’s owner, evacuated his guests to another hotel last week because of the volcanic eruption, he said they could see lava from the parking lot.

“It’s a very beautiful experience to see a volcano,” he said.

Mr. Einarsson called his relationship with volcanoes a “tricky love and hate situation.”

On the one hand, he said, “people are understandably concerned about staying in a hotel next to an eruption site.” On the other hand, he said, people come to Iceland for the nature, and nature wouldn’t be the same without the country’s volcanoes.

“And I wouldn’t be in the business,” he said.

Egill Bjarnason contributed reporting from Gran Canaria, Spain.