Iceland Announces Tourist Tax To Protect ‘Unspoiled Nature’

The word “overtourism” crops up in the travel headlines a lot these days as cities strive to protect their assets from too many visitors. Now, a whole country is fighting overtourism to protect its “unspoiled nature.” Iceland has announced the introduction of a new, nightly fee as a form of tourist tax. This comes as the Nordic nation has experienced a sharp rise in tourists over the past decade.

Iceland to introduce tourist tax

There’s no doubt about it, Iceland is a strikingly beautiful and unique country with vast landscapes including mountains, waterfalls, Northern Lights and more. As the world gets to know what the Nordic country has to offer, it is becoming even more popular.

Between 2010 and 2018, Iceland’s visitor numbers soared by more than 400 percent, as they reached over 2.3 million. Since the COVID-19 pandemic, visitor numbers have quickly reached 1.7 in 2022.

Iceland’s Prime Minister Katrín Jakobsdóttir spoke with the news agency Bloomberg last week. She explained that the new tourism tax could be helpful in combating the impact travelers have on Iceland’s climate and environment.

“Tourism has really grown exponentially in Iceland in the last decade and that obviously is not just creating effects on the climate,” Jakobsdóttir said. adding:

Also, most of our guests visit our unspoiled nature and obviously that creates a pressure.

The Prime Minister said that one way to tackle the climate impact of increased visitors is to raise taxes for those who stay in the country. However, she added that the levies won’t be too high “to begin with.”

Meanwhile, Iceland has set itself some ambitious climate goals including reaching net zero by 2040.

How will the new tax work?

Jakobsdóttir, 47, explained that the new scheme will be introduced as city taxes payable by people who stay in Iceland. Meanwhile, companies in Iceland’s tourism sector are working on improving sustainability. She gave the example of utilizing the circular economy and using electric vehicles. Jakobsdóttir added that it is happening, but that it is a challenge.

When asked how tourist tax can help the country’s environment, it was explained that tourists place a burden on infrastructure, facilities and public services in the destinations they visit.

The new tax can help the country to cope with the burden of overtourism and discourage visitors in order to limit crowding. Moreover, the tax can be utilized to fund public transport infrastructure. It can further be used to reverse damage made by visiting crowds, as well as support sustainability initiatives.

Other countries imposing tourism taxes

Iceland isn’t the first country to introduce tourist taxes. Similar schemes have already been introduced in major tourist destinations like Amsterdam, Berlin, Paris and Rome. Recently, Santiago de Compostela in Spain announced plans to introduce a regional tax to avoid crowding.

Meanwhile, Venice has finally set a launch date for a daytripper visitor fee, set to launch in the summer of 2024. Meanwhile, Manchester in the UK has announced the start of a nightly tax for visitors earlier this year.

On an even bigger scale, Bhutan has introduced a heavy tourist tax that makes it clear the country prefers to welcome rich visitors.

No doubt, as countries see benefits from the tourism tax, others will eventually introduce similar schemes.