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Gray Line Cancels Blue Lagoon Tours, Lays Off Fifteen Employees

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Gray Line Cancels Blue Lagoon Tours, Lays Off Fifteen Employees

Photo: Gray Line Iceland / Facebook

Tour bus operator Gray Line Iceland will be laying off 15 employees next month due to an anticipated decline in business, Kjarninn reports. An announcement from the company explained that this decline will come as a result of the fact that the company will no longer be offering transportation to and from the Blue Lagoon.

The 15 individuals who will be laid off make up about 5% of Gray Line’s employees. According to the company’s press release, this is the first time in Gray Line’s 30-year history that a decline in business has necessitated layoffs.

Gray Line states that their Blue Lagoon trips—which included transportation to and from the spa, as well as an admission ticket—have been among their central offerings for 20 years. However, the company’s previous agreement with the Blue Lagoon regarding the sale of admission tickets has not been renewed, which, Gray Line contends, undercuts the value of the service they’re offering their customers. “If we’re going to offer scheduled trips to the Blue Lagoon,” stated the press release, “it’s absolutely essential that customers be able to purchase admission tickets at the same time.”

Gray Line’s announcement continued by saying that Blue Lagoon’s decision not to renew their admission ticket agreement “...is, to a certain degree, not a total surprise, given that a tour bus operator owned by Blue Lagoon shareholders has started to offer its own tour packages there. This group of shareholders seems to have agreed to rid themselves of competition in order to create room for their own company,” stated the press release.

Indeed, as Viðskiptablaðið recently reported, the owners of Blue Lagoon recently announced that they intend to start offering their own transportation between Keflavík airport and the spa in collaboration with the tour operator Hópbílar. Hópbílar, Viðskiptablaðið explains, is owned by enterprise investment fund Horn III, which is itself operated by Landsbréf, a subsidiary of Landsbankinn bank. The fund Horn II, which is also operated by Landsbref, is one of the Blue Lagoon’s largest shareholders.

Gray Line concluded its press release by saying that it regrets having to lay off its employees, but “in light of the growth of the tourism industry, there’s no doubt that most, if not all, of them will find work somewhere else before too long.” All of the laid-off employees have been given one to three months’ notice to allow them to find other jobs.

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