Tourist Board numbers indicate that as usual, US nationals represented the largest nationality group, at nearly 35% of the total. Even so, the number of visitors from the US was down by a fifth YoY, to its lowest since June 2022. Next in line were travellers from Germany (just over 8%), the UK (6%), Canada (just under 6%), and China (just over 5%) in fifth place.

American and British tourists have long constituted the lion’s share of visitors to Iceland. Fortunately, the seasonal patterns for these two nationality groups are complementary: British visitors come mostly during the winter, while Americans tend to favour the summer and autumn. Chinese tourists have grown more numerous in the recent term as well, and it will be interesting to see how their numbers develop when direct flights between Beijing and Keflavík begin this autumn.

Although the Tourist Board’s figures on the number and proportion of tourists from various countries are interesting, the tallies are not flawless. They are based on random samples taken at airport security check counters, and they obviously exclude travellers who fly into Akureyri or arrive on cruise ships. Thus it is useful to look at other coincident indicators relating to the tourism industry.

Whether one considers departures from Keflavík, turnover with foreign payment cards used in Iceland, or the number of overnight stays, the indicators all point in the same direction: The tourism sector has been treading water thus far in 2026, and signs of growth are few. For instance, turnover with foreign cards was virtually unchanged YoY in H1/2026, at constant exchange rates, and foreign nationals’ overnight stays have increased by only half a percentage point over the same period. And furthermore, visitor numbers according to tallies taken at Keflavík Airport were all but unchanged between H1/2025 and H1/2026.

These indicators support the conclusion that Iceland’s tourism sector is not enjoying the same favourable winds as before. As far as we can tell, this inertia does not stem from any single cause; instead, it appears to reflect several interrelated factors:

• Iceland’s competitive position has grown weaker. A strong ISK, high prices, and the past few years’ steep cost increases have made Iceland an expensive destination in international context. This very probably undermines the competitiveness of the Icelandic tourism sector, not least its position vis-à-vis other destinations in the Nordic region, which are also on the costly side but have been growing in popularity in the recent term.
• Reduced flight offerings have put limits on traveller numbers. The departure of airline PLAY has cut into seat capacity, particularly in the budget travel market. Although other airlines have made up some of the difference, it still appears that seat capacity has been a less robust driver of growth than in the past several years.
• Tourists appear to be spending more cautiously. Developments in payment card turnover suggest that real spending per tourist has contracted marginally. This could indicate shorter stays, increased frugality, or a change in travel patterns, with visitors choosing cheaper accommodation or scaling back their spending on recreation and restaurants.
• Weaker revenues from some key markets are an important factor. During certain times of year, arrivals from several of Iceland’s most important markets – the US, the UK, and Germany – have tapered off. Because these markets typically generate handsome average revenues per tourist, a relatively modest decline can have a marked impact on the sector’s total revenues.
• The tourism sector is maturing. After a decade of booming tourist arrivals, from the post-crisis years until the pandemic, it is natural that growth should lose pace. The novelty of travelling to Iceland has worn off to a degree. In this situation, developments in spending, length of stay, and value creation per tourist become an increasingly important metric of the tourism industry’s performance, and raw visitor numbers carry less weight.

Although it is too early to draw sweeping conclusions, the available data imply that the challenges facing the tourism sector are different than before. Interest in visiting Iceland still looks strong, but indicators suggest that because of higher costs, reduced flight offerings, and changes in travellers’ spending patterns, that interest in Iceland no longer delivers an increase in visitor numbers, overnight stays, and export revenues. If this trend continues, the contribution of tourism to export growth and GDP growth will probably be considerably more modest than we have come to expect in the past

In our macroeconomic forecast from the start of this summer, we discussed developments and prospects for tourism, among other topics. At that time, we projected a small contraction in tourism for this year. The outlook was for a quite decent peak season, not least because of the solar eclipse that is set to attract large numbers of visitors in August. Prospects for the autumn were poorer, and a contraction in the final four months was the main reason we projected a 1% year-on-year drop in visitor numbers. Thereafter, we expected subdued growth in 2027-2028, with visitor numbers roughly on a par with the 2018 record of just over 2.3 million.

We consider that forecast still valid, although it is possible that 2026 as a whole will be a slightly weaker year for tourism than we envisioned then.