Iceland Eyes Tourist Tax Hike to Fund Sustainable Travel
As Iceland braces for record arrivals, the government is proposing a steep increase to its tourist tax to combat over-tourism and bankroll sustainability initiatives in one of the world’s most fragile ecosystems.
Iceland, renowned for its unspoiled landscapes, dramatic geothermal activity and spectacular Northern Lights, is considering a substantial increase to its tourist tax. The move is intended to address record visitor numbers and raise additional funds for sustainable tourism initiatives across the country. Since 1 January 2024, foreign visitors have paid a nightly visitor’s tax varying by accommodation type or when making a port call in Iceland.
An ever-popular destination
Latest figures underline continuing demand. Between January and September 2025, 1.792 million international travellers visited Iceland, according to Statistics Iceland—an increase on the 1.743 million recorded in 2024 and significantly ahead of the 1.597 million of 2019. While cost-cutting airline Play’s temporary shutdown and the Sundhnúksgígar volcanic eruption may have deterred a small share of potential visitors, the overall impact on travel plans has been minimal.
Jóhann Viðar Ívarsson, analyst at the Icelandic Tourist Board (Ferðamálastofa), points to growth in cross-border global tourism and cites the country’s unique natural scenery as key drivers. He also notes the role played by influencers in shaping the country’s appeal, particularly among higher-spending audiences.
Surging numbers place pressure on national infrastructure. Keflavík International Airport is undergoing expansion to improve global connectivity and ease internal travel, while a new four-star hotel near the airport is planned to make visits smoother and more comfortable.
A stay tax to back sustainable travel
Facing the environmental strain of mass tourism and the need for costly infrastructure upgrades, Iceland reintroduced a visitor’s tax on 1 January 2024. The levy is designed to curb the environmental impact of the tourism boom.
Current tariffs are set as follows:
600 ISK (€4.23) per night for hotel and guesthouse stays
Half that amount for camping and motor-home sites
1,000 ISK (€7.04) per cruise-ship passenger calling at Icelandic ports
Now, the government intends to introduce a “substantially higher” tourism tax aimed at swelling revenue streams to prepare for a sustainable tourism future—though the exact figure has yet to be announced.
From 12 October 2025, the Entry/Exit System (EES) took effect in Iceland. The new procedure records data for nationals from non-Schengen countries on short stays each time they cross external EU/EEA borders; Iceland applies the system in line with its Schengen associate status.
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