The Icelandic government has reintroduced a tourist tax for hotel and alternative accommodation rooms – a fee that applied to visitors before the COVID-19 pandemic.
As of January 1, 2024, travellers to Iceland are again obliged to pay taxes for their accommodation in the island country. Additionally, this year sees a notable expansion of the tax’s scope, as it will now be applied to cruise ship passengers.
The new measure implemented the following charges per room for tourists:
- Visitors will pay an additional €3.98 per room booked in hotels, guesthouses, and other accommodations.
- Nights spent at campsites, mobile homes, and caravans will be charged €1.99 more than they currently do.
- Cruise ships making stops at Iceland’s ports will be €6.63 more expensive.
Yves Marceau, vice president of G Adventures, expressed concerns over the increased financial burden on travellers, stating that the tax will further increase the already high cost of visiting the island.
Iceland, renowned for its adventure and nature tourism, attracts visitors with its iconic attractions such as the Golden Circle, South Coast, hiking trails, lava flows, and the mesmerising Northern Lights. The Blue Lagoon, one of the most popular tourist sights in Iceland, has been partially reopened this week, enabling visitors to use the spa area.
The reinstatement of the tourist tax is aimed at addressing the social and environmental consequences of Iceland’s booming tourism industry, which has faced challenges related to over-tourism. Kristijan Svajnzger, general manager of Europe for Intrepid Travel, pointed out the necessity of managing the impact of tourism on both society and the environment.
Prime Minister Katrin Jakobsdottir highlighted the strain on Iceland’s natural resources due to over-tourism in an interview with Bloomberg in September. The decision to reintroduce the tax is part of a strategy to reduce the adverse effects of the country’s tourism success.
Despite the challenges posed by the pandemic, 2023 proved to be a robust year for tourism in Iceland. The country welcomed nearly 800,000 international tourists during the summer, representing a substantial increase of around 25 per cent compared to the same period in 2022, as reported by Iceland Review.
The country had one of the fastest tourism recoveries in Europe for 2023, experiencing a boost in arrival numbers and overnight stays surpassing the levels observed in 2019, according to data from the European Travel Commission.
Guy Bigwood from the Global Destination Sustainability Movement has pointed out that more destinations are introducing higher taxes as they try to align their sustainability goals, and by imposing such fees, they can generate more funding to reach their green goals.
Tourism taxes and especially assessments or levies can help with this.
This change introduced by the Icelandic government was warned earlier by Prime Minister Katrín Jakobsdóttir, who says that the fee will be reasonable and contribute to sustainability programs, aligning with Iceland’s goal to become carbon-neutral by 2040.
