Iceland Breaks Visitor Record Could a Higher Tourist Tax Be on the Horizon
Iceland has marked a significant milestone in tourism this year, attracting an unprecedented number of visitors. The Nordic island, known for its stunning landscapes such as glaciers, geothermal hot springs, and waterfalls, has also become a prime spot for viewing the Northern Lights. This growing appeal is bolstered by continuous daylight during summer. Despite some concerns about a decline in visitor numbers, the statistics tell a different story.
Iceland’s Tourism Boom
Recent reports from Statistics Iceland indicate a burgeoning tourism industry. From January to September 2025, the country welcomed around 1.792 million international visitors. This figure shows an increase from the 1.743 million visitors in 2024 and a notable rise from 1.597 million in 2019.
Visitor Statistics
- 2023 to 2024: 2.2% increase in foreign visitors
- Last 12 months to September 2025: Additional 3.5% spike
- 2025: 1.792 million international visitors
- Comparison to 2024: Up from 1.743 million
- Comparison to 2019: Up from 1.597 million
The hospitality sector is also experiencing a surge, as bookings for hotels and B&Bs have reached record highs. Although setbacks have occurred, such as the closure of the budget airline Play and recent volcanic activity, the tourism sector remains resilient.
Factors Boosting Iceland’s Tourism
Jóhann Viðar Ívarsson, an analyst at the Icelandic Tourist Board, attributes the increase in tourist numbers to Iceland’s unique natural offerings. The combination of pristine nature, rural charm, and a sensory experience sets Iceland apart from other destinations. He notes that rising interest from affluent travelers, amplified by social media, contributes to this trend.
Airport Expansion Plans
To accommodate the increasing visitor numbers, the Keflavík International Airport is undergoing significant expansions. The upgrades include:
- Enhanced facilities for bicycles, buses, and taxis.
- A circular junction to improve traffic flow.
- New walking paths for passengers.
- Construction of a new 4-star hotel.
- Expansion of the airport’s South Building and East Wing terminal.
Potential Increases in Tourist Tax
Iceland has reinstated an accommodation tax aimed at reducing the environmental impact of tourism. Effective January 1, 2024, hotels and guesthouses charge ISK 600 (approximately €4.24) per room, while campsites levy a reduced fee. Cruise passengers also incur a tax of ISK 1,000 (€7.06) when arriving at Icelandic ports. However, Ívarsson underscores that these funds do not significantly contribute to the government budget. He hints at a proposal for a considerably higher tourism tax in the near future, reflecting the sector’s growth.
Local Recommendations
As tourist numbers rise, the Icelandic Tourist Board urges visitors to explore less-traveled areas beyond the capital, Reykjavík. Notable suggestions include the Westfjords during summer when access is easier and the scenery is breathtaking. The unique experience of a summer night in the north, where the sun barely sets, is highly recommended by local experts.
For further insights, Emegypt will continue to monitor developments in Iceland’s tourism sector.
