Iceland Faces Cruise Booking Decline Amid Passenger Fee

Iceland’s cruise tourism industry is poised for a sharp decline, with Cruise Iceland forecasting a 14% drop in bookings for 2026 and an even more dramatic 30% fall anticipated in 2027, according to BB.IS. The primary concern is a recently introduced infrastructure charge of USD 18 per cruise traveler for every 24 hours spent in the country.

Unveiled during a presentation last week, Cruise Iceland's findings suggest that the fee may ultimately result in a financial setback for the government. Should cruise activity decrease by 20%, the treasury could face annual losses of around USD 3.6 million. A 30% dip could drive those losses as high as USD 12.5 million.

Cruise operators have reportedly begun modifying itineraries, spending less time in Icelandic ports and opting instead for alternative locations like the Faroe Islands. Smaller ports, especially in regions such as the Westfjords, are particularly vulnerable to being excluded from future schedules.

Cruise Iceland—a coalition comprising local ports, tour companies, and maritime service providers—has made it clear that they do not reject the idea of an infrastructure fee outright. However, the group insists that such charges need to be implemented thoughtfully. “Sufficient notice must be given so cruise companies can plan accordingly in terms of pricing and logistics,” the organization noted. They are pushing for a fee model based on port visits rather than time docked, which they argue would better support sustained cruise interest in Iceland.

The newly imposed fee also raises the issue of tax fairness, as it applies solely to cruise passengers and not to those arriving by air. In 2023, 309,890 cruise visitors were recorded out of a total 2.4 million international arrivals, making up about 13% of all inbound travelers.