Tourism direct GDP (2024) | Tourism direct employment (2024) | Travel exports (2024) |
|---|---|---|
8.7% of total GDP (up 0.5 percentage points since 2023) | 15.8% of total employment (equal to levels in 2023) | 45.6% of total service exports (up 1.8 percentage points since 2023) |
OECD Tourism Trends and Policies 2026
National tourism strategy: Tourism Policy and Action Plan until 2030
National tourism administration: Ministry of Industries
National tourism budget: ISK 2.4 billion (2025)
Key tourism policy priorities and actions:
Introducing a resource and infrastructure fee at publicly owned nature sites – To support infrastructure, conservation and, in part, research and destination marketing.
Strengthening the framework for managing tourist destinations – Including provisions for access and safety.
Strengthening the governance of tourism – Clarifying the legal and institutional framework, including roles, responsibilities and co-ordination.
Tourism is a key pillar of Iceland's economy and was the top foreign exchange-generating export industry in 2024. The sector directly contributed ISK 400 billion or 8.7% of the country’s GDP in 2024 and accounted for approximately 32 840 jobs or 15.8% of the workforce, remaining relatively stable compared to 2023, where this number was 32 570. Travel generated ISK 448 billion in international receipts in 2024, equivalent to 45.6% of total service exports (43.8% in 2023).
Iceland welcomed 2.3 million international visitors in 2025, a similar number to 2024 (up 0.3%), and the top three source markets were the United States (29.2%), the United Kingdom (10.1%), and Germany (6.7%). In addition, around 330 000 cruise ship passengers visited Iceland in 2025, representing a 2.6% decrease from 2024.
Around 84% of the Icelandic population travelled domestically in 2025, a similar share as in recent years. In 2025, residents took on average 5.7 trips within the country, spending approximately 17 nights away from home in total.
The Icelandic Tourist Board’s economic forecast model projects 2.22 million international tourist arrivals in 2026, a 2.2% decrease from 2025. A slight decline is expected to continue, with arrivals forecast at 2.20 million in 2027 and 2.19 million in 2028. There is considerable uncertainty regarding future cruise passenger numbers; however, current forecasts suggest around 301 000 passengers in 2026 and 272 000 in 2027.
The Ministry of Industries is responsible for developing tourism policy and co-ordinating the work of governmental bodies in Iceland. The Department of Resources is the lead department and oversees the operation and performance of the Icelandic Tourist Board.
The Icelandic Tourist Board is responsible for implementation of government tourism policy, planning and support for regional development, licencing and monitoring of licenced activities, data collection, processing and presentation, safety, quality and consumer protection in relation to tourism, and administration of the Tourist Site Protection Fund and Route Development Fund.
The Tourism Council serves as an advisory body to the Minister and is composed of representatives from the Ministries of Finance, Environment, and Infrastructure, as well the Icelandic Association of Local Authorities and the Icelandic Travel Industry Association.
Visit Iceland is the official destination marketing organisation. It is part of Business Iceland, a public-private partnership established to promote Icelandic exports, foreign direct investments and Iceland as a tourism destination.
Local municipalities are responsible for planning and management of many visitor attractions. With the support of the Icelandic Regional Development Institute, municipality associations operate development agencies to deliver tourism projects. DMOs in each region are public-private entities responsible for developing and implementing regional destination management plans and co-ordinating tourism priorities. They work in collaboration with stakeholders, including Business Iceland and the Icelandic Tourist Board, which provides financial support.
The general overall budget allocated to tourism in 2024 was ISK 2.2 billion. In 2025, this figure increased to ISK 2.4 billion, with the following breakdown: ISK 831 million to the Icelandic Tourist Board; ISK 523 million to the Tourist Site Protection Fund; ISK 823 million to tourism services and ISK 240 million to the Route Development Fund.
Source: OECD, adapted from the Ministry of Industries, 2026.
Iceland’s Tourism Policy and Action Plan until 2030 aims to position the country as a leading sustainable tourism destination, fostering a profitable and competitive tourism sector in harmony with nature and society. The plan is organised around the four main guiding principles of Economy, Society, Visitors and Environment. ISK 1.2 billion from the general budget has been secured for implementation of the Plan through 2030.
To promote value creation, safety and visitor management in tourism, the Icelandic Government plans to introduce a resource and infrastructure fee at publicly owned nature sites, with a bill expected to be presented in autumn 2026 and implementation envisaged in 2027. The fee is intended to support the development, maintenance and conservation of destinations, while also contributing, in part, to research and destination marketing at the national level. In parallel, work is underway to strengthen the governance of tourism, including a clearer legal and institutional framework, defined responsibilities and improved co-ordination.
Managing unbalanced tourism distribution and pressure remains a key priority for Iceland, with some destinations at times perceived as overcrowded, while others would benefit from increased visitation. In this context, provisions are being developed to better manage access, safety and site-specific conditions at tourist destinations, including planning and risk management considerations.
There is also a push for more innovative and sustainable development of tourism businesses, with the Icelandic Tourism Cluster leading new initiatives to build the capacity of SMEs (see box below).
Strengthening innovation and sustainability capacity among tourism small- and medium-sized enterprises (SMEs) is a central challenge for Iceland. These businesses often lack access to resources, funding or knowledge to develop new products, or to adopt circular and regenerative approaches, despite growing expectations around climate responsibility, digital development, and social value creation.
Iceland’s Tourism Policy and Action Plan until 2030 places a strong emphasis on innovation, capacity-building, and collaboration. It calls for more co-ordinated support for tourism SMEs in developing scalable, sustainable solutions and integrating them into broader innovation frameworks. In line with these objectives, the Icelandic Tourism Cluster has led several initiatives to help foster this necessary transformation, including:
Ratsjáin (The Radar) is a national competence programme designed and implemented in 2025. It supported 58 SMEs to enhance sustainability performance through coaching, peer learning, and the development of tailored strategies.
The Nordic Regenerative Tourism Project works across six Nordic countries to co-create tools such as the First Mile method, citizen science engagement models, and a regenerative evaluation matrix. These tools aim to embed regenerative principles into both tourism business models and public planning.
Funding and technical support was provided to 18 Icelandic SMEs help to adopt circular economy and regenerative practices as part of the EU-funded CE4RT programme.
These Cluster-led projects contribute directly to the objectives of Iceland’s tourism policy and illustrate how collaborative platforms can accelerate sustainable transformation in tourism, particularly among SMEs.
Iceland seeks to strengthen tourism education at all levels and is expanding access to learning opportunities. A recent review of tourism education programmes highlighted the need for a more coherent system, better alignment with industry needs, and clearer education pathways. Planned actions also emphasise multicultural awareness and inclusion, alongside the development of work-based learning opportunities.
Tourism is also managed through Destination Management Plans for each of Iceland’s seven regions. The Plans are joint policy statements intended to steer growth and development that define the roles and responsibilities of stakeholders and outline the resources necessary to carry out their responsibilities.