Dwelling to scorching springs and volcanos, Iceland has needed to lure vacationers with its beautiful pure sights. 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 trade, it’s additionally created contemporary housing troubles for individuals who name the nation residence.
However the nation has had sufficient. It now needs to clamp down on “overtourism” with taxes and better charges to examine vacationer numbers whereas not harming a profitable sector of its economic system.
“We are attempting nonetheless to mildew the taxation system for the tourism sector for the long run,” Icelandic Prime Minister Bjarni Benediktsson informed CNBC on Monday.
A potential new measure could be much like surge pricing, whereby a better tax could be charged throughout peak journey than at different instances of the 12 months—though that is nonetheless within the works, Benediktsson added. He additionally mentioned a “sustainability stability examine” was thought-about to take care of Iceland’s nature and native communities.
Earlier this 12 months, Iceland reintroduced a vacationer tax that it scrapped throughout the COVID-19 pandemic. The modest payment—round 600 Icelandic krona ($4.34)—applies to inns, campsites, cruise ships, and different types of lodging. Whereas Benediktsson sees the measure as an “necessary resolution,” he additionally thinks extra have to be executed.
“We want to lean extra in the direction of a system the place the person pays. As I see it, we might wish to go extra towards accession charges to the magnets, as we name them, across the nation,” the prime minister mentioned.
Tourism is necessary to the Icelandic economic system because it derives 8.5% of its GDP from the sector, in response to knowledge from Statistics Iceland. From Recreation of Thrones followers to Blue Lagoon fanatics, 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 properties to hire as extra are swept into short-term leases for guests. Costs have additionally elevated with larger rates of interest, typically pricing tenants out.
Iceland isn’t alone in resisting overtourism—Venice just lately imposed a $5 short-term customer payment 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 payment that displays on lodge payments, contributing in the direction of a fund for warmth pumps and photo voltaic panels at faculties.
“Up to now now we have spent these taxes on compensating the influence vacationers have on the town, together with cleansing providers, security and public transport,” Jordi Valls, Barcelona’s head of financial and tourism promotion, informed Bloomberg in February. “This 12 months we’ve determined to go a step additional and spend the tax on financing public providers from a local weather viewpoint.”
It’s unclear if these prices will flip sufficient guests away to unravel the problem 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 towards the vacationer tax coverage, arguing it won’t have as a lot of an influence.
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 the town whereas limiting their numbers and prioritizing the locals.
