Tourism continued to play a key role in the economy in 2024, accounting for 8.7% of GDP, up from 8.2% in 2023, according to preliminary results from the Tourism Satellite Accounts (TSAs). Accommodation services once again led the sector, contributing around 2.6% of GDP. Despite an increase in tourism’s share of GDP, its contribution to economic growth has fallen and now stands at -0.4% (see further discussion below).
Nearly one in ten hours worked in 2024 linked to tourism
In 2024, tourism directly generated an estimated 31.8 million working hours, equal to about 9.9% of all hours worked. This compares with 10.1% in 2023. Accommodation services remained the largest source of tourism employment, accounting for 3.2% of total hours worked.
Internal tourism consumption increased by 6.4%
In 2024, total tourism consumption in Iceland, by both foreign and domestic visitors, reached nearly 870 billion ISK, up 6.4% from the previous year. Tourism expenditure (tourism consumption excluding imputed rent for holiday homes and employer expenses) amounted to just over 840 billion ISK, an increase of 7.9%. However, when measured at constant prices, tourism expenditure rose by only 2.8%, 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 519 billion ISK in 2024, up 4.2% from the previous year. Accommodation services represented the largest share, around 26%, with spending in this activity by inbound tourists growing 9.5%. Other major activities were F&B serving services and air passenger transportation, which together accounted for approximately 29%, though they declined by 1.4% and 3.6%, respectively, compared with 2023.
At constant prices, inbound tourism expenditure in Iceland fell 0.5% year-on-year. Spending on accommodation services rose 3.5% at constant prices, contributing 0.9% to the annual change in inbound tourism expenditure. In contrast, other major categories saw declines: for example, F&B serving services fell 5.6% at constant prices, contributing negatively by 0.7% to the overall change.
Domestic tourism expenditure in Iceland exceeded 321 billion ISK in 2024, up 14.5% from the previous year. Accommodation and travel agencies accounted for the largest share, just over half of all domestic tourism spending, rising 14.7% and 11.5%, respectively. At constant prices, domestic tourism expenditure grew by 8.6%.
The contribution of tourism to economic growth was -0.4%
Preliminary results from the TSAs show that the gross value added of Iceland’s tourism industry fell by 1% in 2024 compared with the previous year. At constant prices, the decline was larger, at around 6.3%. This drop was largely driven by accommodation services and air passenger transportation, which together contributed negatively by 4% to the annual change in tourism gross value added.
In 2024, the tourism industry’s contribution to economic growth was negative, at 0.4%, nearly half of the contraction recorded in the national accounts for that year. The contribution of tourism to economic growth has thus decreased from the previous year when it was 1%. Labour productivity in the tourism industry fell by just over 5% compared with 2023, following strong growth after the Covid-19 pandemic. It should be noted that these figures are based on preliminary estimates from the 2024 production accounts and may be revised in the next publication.
Constant price results
A new table has been published presenting the main results of the Tourism Satellite Accounts at constant prices. It covers tourism expenditure and tourism gross value added at constant prices (the reference year is 2020), labour productivity in the tourism industry, and tourism’s contribution to economic growth.
Methodological changes
Since the last publication of the Tourism Satellite Accounts, the methodology for estimating domestic tourism expenditure in Iceland has been updated, specifically for accommodation and F&B serving services. These changes have a notable impact on these two categories, though the overall effect on total domestic tourism expenditure is generally small, except for 2018 and 2019, when the estimates decreased by 10% and 11%, respectively. The revisions always increase accommodation expenditure and decrease spending on F&B serving services.
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 2024, 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.