Iceland’s Cruise Industry in Trouble: Navigating the Challenges of New Fee Policy

Iceland’s cruise industry is bracing for a significant downturn due to a new infrastructure fee that has been implemented. The Cruise Iceland association, which represents various stakeholders in the industry, has predicted a 14% decline in cruise bookings for 2026, with an even more substantial contraction of 30% anticipated for 2027. The decline is attributed to the new fee of US$18 per passenger for each 24-hour period spent in Iceland.

Recent economic analyses presented by Cruise Iceland suggest this fee could ultimately result in a net loss for the national treasury. Should cruise ship arrivals decline by 20%, the government could lose around US$3.6 million annually; a 30% drop, as forecasted for 2027, could mean losses of up to US$12.5 million.

Adjustments to itineraries have already begun, with some cruise lines reducing their stay in Icelandic ports in favor of other destinations like the Faroe Islands. This shift poses a risk to more remote ports in the Westfjords, which may be excluded from future cruise routes.

While Cruise Iceland does not oppose the principle of an infrastructure fee, they emphasize the need for a gradual and well-structured implementation. They argue that cruise lines need ample time to adjust their pricing and scheduling. Instead of the current model, they propose a tiered fee based on the number of port calls rather than the duration of stay, which they believe would foster ongoing engagement with Icelandic ports.

This fee also raises questions about tax equity between cruise travelers and those arriving by air. In 2023, cruise passengers accounted for about 13% of Iceland’s total tourist arrivals, contributing significantly to the country’s tourism economy.

For more details on Iceland’s cruise sector, you can view additional information on the Cruise Iceland report.

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