Iceland is famous for many things: the otherworldly hue of its Blue Lagoon, its volcanic landscape and lava flows, the staggering number of waterfalls and glaciers, the fact that there are more than twice as many sheep as people, and in the past decade, the sheer number of visitors.
In 2009, Iceland welcomed 464,000 tourists. By 2019, that number had ballooned to more than 2 million in a country with a population of only 360,000 and a landmass roughly the size of Ohio. In recent years, some areas, like Fjadrárgljúfur canyon, have had to close to visitors because the environment can’t accommodate the crowds.
But in an effort to protect its natural environment, Iceland just announced plans to introduce a tourism tax. These tourist taxes can be used for everything from promoting art and culture (as is the case for Germany) to funding sustainability programs (like in Bhutan).
For now, the details of what that will look like are scant. Prime Minister Katrín Jakobsdóttir told Bloomberg last week it would “not be high, to begin with” and would be implemented as city taxes for people staying in Iceland. There’s no word yet on when it’ll roll out or how it will be implemented.
The Nordic nation joins a growing number of destinations (both on the country and city level) that have recently introduced or are planning tourism tax schemes. In 2023, Manchester in the United Kingdom implemented a fee that would add an extra £1 (roughly US$1.21) to a traveler’s hotel bill each night they stay, and Barcelona, Spain, increased its existing tourism tax from €1 to €3.50 per night (US$1.05 to $3.67). Similarly, Edinburgh announced it is waiting on approval from the Scottish parliament to enact a £2-a-night tax, and Hawai‘i state leaders nearly passed a law requiring that visitors pay a $50 “green fee.” In the coming year, Amsterdam will introduce the highest tourism tax in Europe at 12.5 percent of each night’s hotel stay, and Venice will require day-trippers to pay 5 euros (US$5.38).
