If there’s one thing major international destinations are seeing as visitor flows recover or even surpass pre-pandemic levels, it’s that managing tourism success is a matter of balance. The balance between its weight in GDP and the inconvenience it causes to residents, its relevance to local economies and its environmental and social impact… In this complex rope, Japan, Amsterdam, Hawaii, Venice, Barcelona, ​​​​the Canary Islands and the Balearic Islands… The increasing influx of tourists Iceland, which is working on how to adjust its fiscal policy so it doesn’t saturate the island nation.

Authorities have already rolled back a tourism tax this year that was imposed before the pandemic and have acknowledged they are working on changes to tax models. Purpose: To benefit from tourism… overtourism.

“User pays”. CNBC’s news today reveals that Icelandic officials want to change the tax model they apply to tourism in order to achieve the desired (and complex) balance between tourism and sustainability.

“We are still trying to shape the tax system of the tourism sector for the future,” admits the country’s Prime Minister Bjarni Benediktsson. Although the leader doesn’t go into detail or say exactly what officials have in mind, he does offer some hints about where they want to go in the future.

more control. “We want to move more towards a user-paying system,” he continues. Benedkiktsson acknowledges his determination to focus on what he calls tourist “magnets.” “By doing this, we were able to control the traffic. So we could have a higher rate when demand was greatest and control the rates by changing them both during the day and between months or at different times of the year,” the new manager explains. He was appointed Prime Minister of Iceland, which makes it clear that in any case the plan is still in its early stages. “Processing in progress”.

Purpose: balance. Benedicktsson’s priority is to ensure that the tourism sector grows in harmony with both society and nature. For this purpose, the Government is working on its own “sustainability balance sheet”.

“We have set up a system where we look at some indicators: Is nature in balance somewhere? Is society happy with development? Is it green, yellow, red? […] “For example, if we see that there are places in Geysir, where our hot springs are located, that are suffering from the number of visitors, we have to take action.”

One more indicator. This isn’t the first time the Icelandic Government has hinted it will use taxes to avoid the effects of tourist saturation. In September, while Katrín Jakobsdóttir was still in office as prime minister, officials agreed to look at tax policy as a way to protect themselves from overtravellers. “Tourism in Iceland has increased exponentially in the last decade, and this not only affects the climate,” Jakobsdottir warned at the time in an interview with Bloomberg Television.

“In addition, most of our guests visit nature, and this creates pressure,” the leader emphasized. Bloomberg pointed out that one of the strategies the government will put on the table to reduce the excessive tourist burden is to increase taxes on visitors staying in the country. Although Jakobsdottir explained that the rates applied will not be high, at least initially.

recovery odds. Shortly afterwards, at the beginning of the year, the Government decided to reintroduce the tourist tax, which also applied to accommodation before the health crisis. Rates rebounded in January when they were expanded to include cruise passengers. As Schengen News noted, the change meant that visitors would start paying an extra 4 euros per room booked in hotels, guesthouses or other accommodation; In addition, there was an extra bonus for those who spent the night in campsites or caravans and for passengers on transatlantic ships. (6.63).

In an interview with CNBC, Iceland’s current Prime Minister celebrated the reintroduction of the tourist tax imposed under his predecessor as an “important decision” for the country, but noted that the Government needed to go further. if you want to achieve balance.

From percentages… and explosions. Icelandic tourism faces a complex scenario. In the last few months the country has suffered volcanic eruptions that have affected some of its most tourist areas. In fact, just a few weeks ago, a volcano in the southwest erupted for the fifth time since December, threatening the seaside town of Grindavik and forcing the evacuation of the Blue Lagoon geothermal spa, a popular destination with visitors. Despite this challenge, Iceland’s tourism sector is rebounding strongly from the COVID hit.

Data collected by CNBC shows that officials expect the country to reach 2.3 million visitors this year, in 2025 this figure will be 2.4, and in 2026 the figure will increase again, reaching 2.5 million. Statita tables clearly show that the flow of visitors to the island nation has increased at a steady rate over the last decade, except for years marked by Covid-19.

And at a good pace. It recorded only 1.77 million tourists in 2010; This figure is well below the 2.5 million figure it will reach by the middle of this decade if predictions are correct. Its economic weight became such that in 2023 the tourism sector represented 8.5% of GDP; this was significantly above the 7.5% in 2022, or the 8.2% it represented pre-COVID.

Pictures | Benjamin R. (Unsplash) and Ruslan Valeev (Unsplash)

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