Chinese Tycoon to buy vast tract of Iceland for eco resort in enigmatic move

Mr Huang of Zhongkun Group plans to buy a vast tract of Icelandic land for a 100 million dollar tourism project: why?

Who would have thought a couple of years ago that an Iceland/China combo would be at the leading edge of world tourism?

China is now number three source market for international tourists and is sure to take the top spot shortly – it is already number one for domestic tourists. In green tourism the country is by far the world’s leader in high speed trains and train lines and is rapidly taking the top spot for motorcoach production.

Iceland has the reputation for being a quiet ecotourism destination that many USA-bound tourists have visited on low ‘Over the pole’ flights and now seen on their TV sets belching out holiday-destroying volcanic ash.

So what’s the interest?

Why has Huang Nubo, a real estate investor and former Chinese government official, struck a provisional deal to acquire 300 square kilometers (0.3% of Iceland’s total area) of wilderness in north-east Iceland where says he plans to build an eco-tourism resort and golf course?

Here are a few answers and a few questions:

• When climate change takes its toll – Iceland will be very close indeed to the USA by sea and maybe a key hub for Asian cargo when Arctic waters are clear for shipping.
• There is no reason why China shouldn’t take a real interest in Iceland – it has vast natural resources, will get warmer by the year and China last year agreed a $500m currency swap deal with Iceland which was widely viewed as a sign of Beijing’s desire to build links with Reykjavik. The two countries are already discussing co-operation on Arctic shipping as part of Beijing’s broader interest in the potential to ship goods to Europe and the US east coast across the North Pole as Arctic ice recedes.
• Everybody knows that water is the next big issue – what better than pure Icelandic water from one of Iceland’s biggest rivers (on the site)
• It is certainly a big and thoughtful tourism investment. Although people close to him say his interest in Iceland is motivated by his love of nature rather than geopolitics., Mr Huang is not an innocent investor his company, Zhongkun Group, owns resorts and tourist facilities across China. He describes himself as a poet and adventurer, having climbed Mount Everest and reached the north and south poles.

And a few questions… from Iceland: Westfjords says:

• “If the hype is to be believed, the five star hotel is to be targeted at wealthy Asian tourists. One of the fears expressed is that they will want to turn the land in to some hideous Chinese mass tourism style theme park, like a similar project in Sweden.
• “If this is the case, then how are the masses of Asian tourists going to get there? One of the concerns expressed is that the construction of five star hotels in the Icelandic countryside would mark the death of the current network of family run guesthouses that characterise the Icelandic countryside.”
• “But the reality is that small family run guesthouses are the main form of tourism business in Iceland because the conventional tourist season has been too small to justify any investment until now in major hotels outside of Reykjavik and Akureyri. Indeed, a lot of hotels that I am aware of in Icelandic countryside are mired in bad loans and run at a huge loss.”
• “But of course, there are a lot of unanswered questions: like why exactly they need thirty thousand hectares of land to construct the hotel. Hopefully the governments promised investigation will look in to these issues.”

Time will tell…

Valere Tjolle
Valere is editor of the Sustainable Tourism Report Suite 2011 Special Offers HERE