Iceland’s Cruise Industry Hits Rough Waters with New Fee Policy

Iceland’s cruise industry faces a significant downturn due to a new infrastructure fee, which has raised concerns among stakeholders. The Cruise Iceland association has estimated a 14% decline in nationwide cruise bookings for 2026, with projections indicating a staggering 30% drop in 2027. This decline is a direct response to the newly implemented charge of $18 per passenger for every 24 hours spent in Icelandic territory.

During a recent briefing, Cruise Iceland presented an economic analysis suggesting that the fee might actually lead to a fiscal loss for the government. They pointed out that if cruise ship arrivals decrease by 20%, the loss to the national treasury would be around $3.6 million annually. A more severe 30% decrease, as is currently anticipated for 2027, could escalate the losses to approximately $12.5 million.

As a result of the fee, many cruise lines are reportedly altering their itineraries to shorten stays in Icelandic ports, opting instead for destinations like the Faroe Islands. This adjustment raises alarm for remote ports, particularly in the Westfjords, which risk being excluded from future routes altogether.

While Cruise Iceland has not fundamentally opposed the concept of an infrastructure fee, they advocate for a more structured and gradual implementation. They emphasize that cruise lines need adequate notice to adjust pricing models and itineraries. The association has proposed a tiered fee structure based on the number of port calls instead of the duration of stay, arguing that this approach would encourage ongoing engagement with Icelandic destinations.

This situation also brings to light broader issues regarding tax equity between cruise passengers and those arriving by air. In 2023, cruise visitors constituted around 13% of Iceland’s total tourist arrivals, with 309,890 cruise passengers out of a total of 2.4 million travelers.

The introduction of this fee has led to renewed discussions about how various visitor segments affect national tourism revenues and the costs of infrastructure.

For more information, visit Reykjavik’s details on CruiseMapper.

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