Iceland’s tourism sector posted modest growth in 2026, with a sharp rise in Chinese visitor numbers and higher overall spending offsetting declines from several of the country’s established source markets, according to figures from Statistics Iceland.
Foreign hotel overnight stays rose 0.9% year on year to 2.75mn, while tourist card spending grew slightly faster, climbing 1.4% to ISK211bn ($1.55bn). Average spending per foreign overnight stay reached ISK77,000 ($569), up 0.5%, suggesting visitors continued spending more even as overall volumes stayed relatively flat. Hotel occupancy averaged 64.3% across the year, down 1.4 percentage points from 2025.
Seasonality remained pronounced. July was the busiest month, generating 593,254 foreign overnight stays, while January recorded the lowest total at 248,842.
The US remained Iceland’s largest source market by a wide margin, accounting for 28.7% of foreign hotel nights, though American visitor stays fell 8.3% year on year to around 790,000. The UK and Germany followed behind, contributing 345,000 and 234,000 nights respectively.
China stood out as the clear growth story among Iceland’s leading markets, with overnight stays jumping 31.2% to approximately 224,000. Italy also posted strong growth, up 11.1% year on year. Domestic hotel nights, by contrast, declined 6.7% to 318,000.
For the travel insurance and intermediary sector, the figures point to a broadly stable inbound market undergoing a shift in source-market composition and spending behaviour. The combination of flat-to-modest volume growth alongside rising visitor expenditure, paired with a changing traveller mix, underscores the value of tracking both trip numbers and traveller profiles when assessing demand tied to Iceland.