Residence to scorching springs and volcanos, Iceland has wished to lure vacationers with its beautiful pure points of interest. This set off a meteoric rise in customer numbers, hovering from lower than 500,000 in 2010 to an anticipated 2.3 million this 12 months. Whereas that’s created a money cow for Iceland’s tourism business, it’s additionally created recent housing troubles for many who name the nation residence.
However the nation has had sufficient. It now desires to clamp down on “overtourism” with taxes and better charges to test vacationer numbers whereas not harming a profitable sector of its financial system.
“We are trying still to mold the taxation system for the tourism sector for the future,” Icelandic Prime Minister Bjarni Benediktsson advised CNBC on Monday.
A doable new measure can be much like surge pricing, whereby the next tax can be charged throughout peak journey than at different occasions of the 12 months—though that is nonetheless within the works, Benediktsson added. He additionally mentioned a “sustainability balance check” was thought of to take care of Iceland’s nature and native communities.
Earlier this 12 months, Iceland reintroduced a vacationer tax that it scrapped in the course of the COVID-19 pandemic. The modest charge—round 600 Icelandic krona ($4.34)—applies to resorts, campsites, cruise ships, and different types of lodging. Whereas Benediktsson sees the measure as an “important decision,” he additionally thinks extra have to be accomplished.
“We would like to lean more towards a system where the user pays. As I see it, we would want to go more toward accession fees to the magnets, as we call them, around the country,” the prime minister mentioned.
Tourism is essential to the Icelandic financial system because it derives 8.5% of its GDP from the sector, based on information from Statistics Iceland. From Sport of Thrones followers to Blue Lagoon fans, Iceland has piqued the curiosity of many. The variety of guests has elevated in the previous couple of years regardless of interruptions just like the COVID-19 pandemic and volcanic eruptions.
On the identical time, locals have wrestled with discovering houses to lease as extra are swept into short-term leases for guests. Costs have additionally elevated with larger rates of interest, usually pricing tenants out.
Iceland isn’t alone in resisting overtourism—Venice not too long ago imposed a $5 short-term customer charge that might assist curb footfall in a metropolis that’s famously swamped with vacationers for a lot of the 12 months.
Given the curiosity within the historic Italian metropolis, Venice collected €37 million ($39.6 million) from vacationer taxes final 12 months.
Then again, Spain has included a brand new charge that displays on lodge payments, contributing in the direction of a fund for warmth pumps and photo voltaic panels at colleges.
“So far we have spent these taxes on compensating the impact tourists have on the city, including cleaning services, safety and public transport,” Jordi Valls, Barcelona’s head of financial and tourism promotion, advised Bloomberg in February. “This year we’ve decided to go a step further and spend the tax on financing public services from a climate point of view.”
It’s unclear if these fees will flip sufficient guests away to unravel the difficulty of overtourism and its penalties. In Venice, as an example, the brand new cost hasn’t depressed customer numbers simply but. Locals have additionally protested in opposition to the vacationer tax coverage, arguing it won’t have as a lot of an impression.
With the pandemic within the rear-view mirror, hundreds of extra vacationers are anticipated yearly in Iceland. The nation has the tall process of discovering insurance policies that stability encouraging vacationers to nonetheless come to town whereas limiting their numbers and prioritizing the locals.
