Restaurant bankruptcies surge in Reykjavik with 75% increase over two years

The number of restaurant bankruptcies in Reykjavik has dramatically increased over the past two years. According to the director of restaurant associations, there has been a 75% rise in bankruptcies between 2022 and 2023.

One example is Amber Astra, which closed shortly after its grand opening in May. The harsh reality of running a restaurant is echoed by Jon Myrdal, who describes the experience as exceedingly challenging. “Starting a restaurant is a dream for many, but it often leads to despair,” he states. “Many begin without any real understanding of the business. For those of you considering opening a small, charming restaurant with 25 seats, it’s basically a prison. You’ll never earn enough to hire the staff that would allow you to live a decent life. You need a significant number of customers to enjoy a normal existence as well. It’s no joke.”

The rising trend of bankruptcies has been noted as more severe in the last two years compared to previous periods. According to the director, stability within the restaurant sector is lacking. Currently, about 950 to 960 restaurants operate in the market, with 470 of them being less than five years old, highlighting concerns over industry stability. As he states, the bankruptcies seen in 2022, 2023, and into 2024 have surpassed those experienced during the COVID-19 pandemic.