Tourism continued to play an important role in the economy in 2025, accounting for 8.8% of GDP, up from 8.2% in 2024, according to preliminary results from the Tourism satellite accounts (TSAs). Accommodation services once again led the sector, contributing around 2.6% of GDP. Furthermore, the tourism industry is estimated to have contributed 0.1 percentage points to economic growth in 2025, compared with a contribution of -0.4 percentage points in the previous year.
Nearly one in ten hours worked in 2025 linked to tourism
In 2025, tourism directly generated an estimated 30.5 million working hours, equal to about 9.5% of all hours worked. This compares with 10.2% in 2024. Accommodation services remained the largest source of tourism employment, accounting for 3.2% of total hours worked.
Internal tourism consumption increased by 4.2%
In 2025, total tourism consumption in Iceland, by both foreign and domestic visitors, reached nearly 914 billion ISK, up 4.2% from the previous year. Tourism expenditure (tourism consumption excluding imputed rent for holiday homes and employer expenses) amounted to just over 870 billion ISK, an increase of 3.9%. However, when measured at constant prices, tourism expenditure rose by only 0.8%, showing that price increases had a significant impact on growth at current prices.
Inbound tourism expenditure at constant prices decreased
Inbound tourism expenditure in Iceland reached nearly 540 billion ISK in 2024, up 0.2% from the previous year. Accommodation services represented the largest share, around 27%, with spending in this activity by inbound tourists growing 7.5%. Other major activities were F&B serving services, air passenger transportation, transport equipment rental, and travel agencies, which together accounted for approximately 51%, though combined they declined by 0.6% compared with 2024.
At constant prices, inbound tourism expenditure in Iceland fell 2.5% compared with the previous year. Spending on accommodation services grew by 3.5% at constant prices and transport equipment rental grew by 12.2%. In contrast, other major categories saw declines: for example, F&B serving services fell 2.1% at constant prices and air passenger transportation fell 8.1%. Domestic tourism expenditure in Iceland exceeded 329 billion ISK in 2025, up 10.7% from the previous year. Accommodation and travel agencies accounted for the largest share - just over half of all domestic tourism spending—rising 26.5% and 12.6%, respectively. At constant prices, domestic tourism expenditure grew by 6.8%.
The contribution of tourism to economic growth was 0.1 percentage points
Preliminary results from the Tourism satellite accounts show that the gross value added of Iceland’s tourism industry grew by 5.5% in 2025 compared with the previous year. At constant prices, the increase was significantly less, or around 1.0%. The growth was largely driven by accommodation services, transport equipment rental, and travel agencies.
In 2025, the tourism industry’s contribution to economic growth was around 0.1 percentage points, with national accounts indicating that economic growth was 1.3% in that year. The contribution of tourism to economic growth has thus increased from the previous year when it was -0.4 percentage points. Labour productivity in the tourism industry grew by 8.8% compared with 2024, following a decline of 6.5% in the previous year. It should be noted that these figures are based on preliminary estimates from the 2025 production accounts and may be revised in the next publication.
About the data
The Tourism satellite accounts are used as a measurement of tourism within the national accounting framework and cover both inbound tourism and domestic tourism in Iceland.
In parallel to the publication of the results of the Tourism satellite accounts for 2025, the results of previous years have been revised. As Tourism satellite accounts are based on the results of both the expenditure and production approaches to compiling GDP, it should be emphasised that revisions made to those results also affect the Tourism satellite accounts.