Iceland’s government is preparing to introduce a “considerably higher” tourist tax in the coming weeks as the Nordic island nation grapples with an unprecedented influx of international visitors that continues to break previous records. Euronews reports that according to data from Statistics Iceland, the country welcomed 1.792 million international tourists from January to September 2025. This figure marks a 2.2 percent increase from the same period in 2024 and a substantial jump from pre-pandemic levels in 2019, when 1.597 million visitors arrived.
The country’s tourism boom has persisted despite several potential setbacks, including the closure of budget airline Play and the volcanic eruption at Sundhnúksgígar fissure. The surge in visitors has placed increasing pressure on Iceland’s delicate ecosystems and infrastructure. As a result, officials now seek additional funding mechanisms to manage sustainable tourism growth.
Factors Driving Iceland’s Tourism Appeal
Iceland’s consistent growth in visitor numbers stems from several key factors, according to tourism experts. As reported by Euronews Travel, an analyst from the Icelandic Tourist Board explained that while global cross-border tourism has been increasing internationally for decades (except during the COVID-19 pandemic), Iceland’s growth has outpaced both international and European averages.
The country’s unspoiled natural landscapes and rural settings offer tourists experiences that are distinctive and unlike anything they may have encountered elsewhere. Additionally, Iceland has become increasingly fashionable among higher-income travelers looking to check the destination off their bucket lists, with social media influencers contributing significantly to promoting the country’s stunning landscapes.
Proposed Tax Increase
Iceland reinstated its accommodation tax for tourists on January 1, 2024, as part of efforts to mitigate tourism’s environmental impact. Under the current system, hotels and guesthouses charge ISK 600 (approximately $4.94) per room, while campsites and mobile homes charge half this amount, at ISK 300. Cruise passengers calling at Icelandic ports also face an ISK 1,000 ($8.23) tax per person.
The current government is planning to propose a “considerably” higher tourism tax in the coming weeks, as reported by both Euronews Travel and Travel and Tour World. According to an analyst from the Icelandic Tourist Board, the tourism sector’s success has prompted authorities to seek a greater share of the value generated by this industry.
While specific details about the proposed increase have not yet been released, the measure appears aimed at capturing more revenue from the booming tourism industry while potentially addressing sustainability concerns.
