Even though the eclipse was a major attraction this year, the Icelandic Tourist Board’s recently published figures on departures from Keflavík Airport (KEF) indicated that visitor numbers increased only marginally between years in August. Some 314,000 foreign nationals departed via the airport during the month, and while it is the largest number on record, it is only 0.4% above the August 2024 total. We had hoped that the difference would be larger, given the keen worldwide interest in the solar eclipse that passed over Iceland in the middle of the month.
The solar eclipse had limited impact on tourist traffic
Tourist numbers were virtually the same this August as they were a year earlier, solar eclipse notwithstanding. The outlook is for a slight year-on-year decline in 2026. Data centres are the main source of growth in services-generated foreign exchange revenues and will probably remain so.
As usual, Americans constituted the largest foreign nationality group at the airport, accounting for just over a third of the total in the Tourist Board’s figures for August. Notably, US tourists increased in number by more than a fourth YoY. On the other hand, visitors from the Nordic region, Italy, and various other countries declined markedly in number between years.
No less interesting is the fact that Canadians were the second-largest group, at just over 7% of the total, overtaking countries such as the UK and Germany, which have generally ranked only behind the US among visitors to Iceland. Furthermore, Canadians accounted for nearly 7% of all visitors over the summer as a whole, up from roughly 5% in 2025 and 4% in 2024.
This shift is not terribly surprising, however. Canadians’ travel patterns have changed somewhat in recent years, and various indicators show that they travel less to the US than they used to. This is due not least to the scrapping between the two countries’ leaders and the tariff war, which understandably has hit Canadians rather hard. At the same time, Iceland has strengthened its position as a destination for Canadian tourists, bolstered by the strong connections between the two countries.
German travellers were hard on Canadians’ heels, with roughly 7% of the August total, followed by visitors from France, at just over 6%, and Italy and the UK, with slightly over 5% each.
Slightly fewer tourists expected this year
Foreign nationals’ departures via KEF have declined by 1% YoY thus far in 2026. This is in line with our early-June forecast of a marginal contraction in tourist numbers this year. It is highly uncertain how the rest of the year will develop, though, as tourist numbers shrank by over 10% YoY in the final quarter of 2025.
Other tourism-related indicators accord broadly with the Tourist Board’s passenger figures. Over the first seven months of 2026, for instance, foreign nationals’ overnight stays at registered accommodations were virtually unchanged between years, and turnover with foreign payment cards in Iceland grew by only a little more than a percentage point at constant exchange rates.
During the summer, we discussed the possible reasons for this apparent levelling off. Factors we mentioned include a weakening of Iceland’s position in the stiff competition for international tourists; reduced airline seat capacity after the collapse of airline Play; increased spending consolidation among potential travellers; weaker economic developments in some key markets; and last but not least, the fact that Iceland’s novelty as a travel destination seems to be wearing off. Tourism has established itself as a key export sector and taken its place beside other firmly rooted industries such as fishing and metals manufacturing.
Tourism comes of age
Tourism still stands head and shoulders above other services sectors in terms of export revenue generation. From mid-2025 through mid-2026, it brought in ISK 635bn, or 60% of total services export revenues for the period. On the other hand, the composition of services export revenues has been changing markedly in the recent term, not least because of growing activity at Iceland’s data centres. The information and communications technology (ICT) industry has therefore shouldered its way into second place among key sectors above non-tourism transport and communications services. Export revenues from the ICT industry totalled ISK 129bn over the aforementioned period, or 12% of total revenues, while other transport and communications services generated ISK 110bn, or 10%, over the same period.
We think there is little doubt that computer-related services will contribute a rapidly growing share of export revenues in the coming term. The data centre industry is still developing apace, and leading companies in the sector have plans for further growth, as demand for their services is booming at present.
The tourism industry is positioned somewhat differently. The sector has shed its short pants and donned long trousers and is competing fiercely with its counterparts in neighbouring countries, and conditions for competition have tightened recently with the appreciation of the ISK, rapidly rising wage costs, and increased taxation. Although there is little probability that tourism will relinquish its position as Iceland’s leading services sector in the years just ahead, the sources of new export growth will presumably be found in data centre services, other intellectual property-based sectors such as pharmaceuticals, and land-based aquaculture.
