Just over a fourth of all foreign passengers travelling through Keflavík Airport were from the US, and US traveller numbers were up by nearly a fifth between years. Next in line were British nationals, who accounted for just over 14% of the total and whose numbers increased by nearly one-third YoY. Third place, at just over 6%, goes to Chinese tourists, with an increase of nearly 8% between years.

It is gratifying to see such an influx of visitors from the UK, who are Iceland’s most valuable wintertime tourists, as last year’s dip in their numbers caused considerable concern. It is no less satisfying to see the surge in visits by US nationals, whose numbers had subsided in recent months. Visitors from China have been coming to Iceland in steadily increasing numbers since the pandemic, and they have become important year-round customers for the sector.

Q1 exceeds expectations

In Q1, the number of foreign nationals travelling to Iceland via Keflavík Airport was virtually on a par with the same quarter of 2025, although it should be noted that the Q1/2025 total represented a YoY decline of slightly more than 7%. Even so, a number of factors suggested that this year would bring another decline on the heels of a weak Q4, and tourism companies were discernibly pessimistic at the year-end.

Other available data for the start of 2026 point in more or less the same direction. Overnight stays at registered accommodations increased by 6% in February, and foreign visitors’ payment card turnover has been normalising after an abrupt drop in the final months of 2025. We were struck by the press release from Statistics Iceland (SI) on overnight stays in hotels, which also showed a 6% YoY increase in February, but SI also specified that the increase was due almost entirely to Chinese tourists’ stays in South Iceland. It will be interesting to see whether card turnover figures and overnight stays for March, set for publication later this month, turn out as positive as airport departure numbers have.

Brisk peak season ahead

The outlook is for a quite decent peak season this year. A key attraction, of course, is the solar eclipse that will be visible from the westernmost part of Iceland on 12 August and could be quite spectacular to see if weather conditions permit. In this context, it is interesting to examine developments in Google searches containing keywords relating to travel to Iceland.

As the chart indicates, the frequency of such searches skyrocketed in August 2025, when foreign media reported heavily on the eclipse, then one year away. Interest in visiting Iceland appears to have remained relatively strong ever since. This aligns well with recent comments from tourism operators, who have said that prospects for the coming high season are relatively bright and the status of bookings generally good.

The outlook for goods and services exports has improved

At the beginning of the year, we projected that the number of tourists visiting Iceland would fall by nearly 4% between 2025 and 2026. This was due not least to the bleak outlook for the winter season, but we also expected a YoY decline in the first half of the summer. Developments year-to-date have been far more favourable than we dared hope, at least as regards visitors numbers and overnight stays. Prospects for the peak season have also improved relative to our January forecast. The outlook for this autumn is still highly uncertain, however, owing not least to the impact of the Persian Gulf war on airfares and potential global appetite for travel.

We have therefore updated our tourism forecast. Now we expect visitor numbers to be virtually the same in 2026 as in 2025, when just under 2.27 million passengers departed Iceland via Keflavík Airport. It is also possible that the number of tourists will increase slightly YoY because of the eclipse.

At the same time, the outlook for goods exports has improved since the start of this year. The Norðurál aluminium smelter at Grundartangi looks set to return to full production earlier than we had anticipated, and the capelin season was more bountiful than we had expected. In addition, the price of aluminium and many marine products is quite high at present, partly offsetting the recent spike in fuel prices.

The outlook is for the contribution of net trade to output growth to be somewhat more favourable than we projected at the beginning of the year, and for GDP growth to be a bit stronger than the 0.6% in our January forecast. We now expect GDP growth to measure about 1%, or slightly more. Although this is a subdued growth rate in historical context, it can be viewed as a defensive victory after the recent turmoil in Iceland and abroad.