Tourism is the major export earner in Iceland, accounting for ISK 520 billion in 2018 – equivalent to 39% of total export revenue. The sector directly contributed 8.6% of GDP in 2017, and employed some 30 000 people – representing 15.7% of the workforce. Travel exports represented 47.7% of total service exports in 2018.
After nine consecutive years of growth in tourism arrivals, the trend has recently slowed. International tourist arrivals totalled 2.0 million in 2019, representing a 14.2% decline from 2018. This is due mainly to reduced air access but also a strong Icelandic krona. The top three source markets by volume are the United States (23.4% of international tourists), the United Kingdom (13.2%), and Germany (6.7%). Together, these three markets account for 43.3% of total tourist arrivals. (Source OECD)
Domestic tourism is relatively stable, with domestic overnight stays totalling 1.1 million in 2018, representing 13% of total overnight stays. By putting the tourist numbers in relation to the population of Iceland, the result is much more comparable picture: With 1.3 tourists per resident, Iceland ranked 37th in the world. In Northern Europe, it ranked 4th.
The Department of Tourism at the Ministry of Culture and Business Affairs is responsible for developing and executing an official tourism policy, proposing legislation in the field of tourism and co-ordinating the work of various governmental bodies with regard to tourism issues.
The Icelandic Tourist Board, the Tourist Site Protection Fund, The Route Development Fund and the Tourism Task Force are bodies that operate under the auspices of the Ministry. The Ministry also works in close co-operation with various other Ministries when it comes to matters that affect tourism.
The government has several agreements with Business Iceland regarding the promotion and marketing of Iceland in general and specifically as a tourism destination