Iceland’s cruise industry is preparing for a notable downturn in the coming years following the introduction of a new infrastructure fee. Cruise Iceland, an association representing the interests of Icelandic ports, tourism stakeholders, and shipping agents, has projected a 14% decline in nationwide cruise bookings for 2026, with an even sharper contraction of 30% expected in 2027. The figures, reported by BB.IS, reflect growing concerns over the impact of the newly instituted charge of US$18 per cruise passenger for every 24-hour period spent within Icelandic territory.
At a recent briefing, Cruise Iceland presented an economic analysis suggesting that, contrary to expectations, the fee may result in a net fiscal loss to the national treasury. If cruise arrivals were to fall by 20%, the government stands to lose approximately US$3.6 million annually. A 30% drop, as currently forecast for 2027, could lead to losses amounting to US$12.5 million.
Adjustments to cruise itineraries are already being noted, with some operators reportedly curtailing their stays in Icelandic ports in favor of alternative destinations such as the Faroe Islands. This shift is particularly concerning for more remote ports, including those in the Westfjords, which are at heightened risk of being excluded from future routes.
Cruise Iceland has clarified that it does not oppose the principle of an infrastructure fee. However, the organization stresses the necessity of a phased and structured implementation. Representatives have noted that cruise lines require sufficient lead time to revise pricing models and schedule adjustments accordingly. In lieu of the current model, the association has advocated for a tiered fee structure based on port calls rather than the length of stay, which they argue would better support continued engagement with Icelandic destinations.
The introduction of the fee also raises broader considerations regarding taxation equity between cruise passengers and those arriving by air. In 2023, cruise visitors comprised approximately 13% of Iceland’s total tourist arrivals, accounting for 309,890 out of 2.4 million travelers. This policy shift invites renewed scrutiny of how different visitor segments contribute to national tourism revenues and infrastructure costs.