New project: Can a Tourist Tax Enhance Sustainability?

The Icelandic Tourism Research Centre (ITRC) participates in a new project that explores tourist tax to secure a sustainable future for northern communities. The project Regenerative Economic Transfers for Universal Resilience in the North – RETURN has recently been funded by the European Union's Interreg program, The Northern Periphery and Arctic (NPA).

The RETURN project, which has received €1.6 million in funding, is a collaboration between eight research institutions and several tourism organizations, environmental NGOs, and regional governmental organizations across the NPA region. The project starts on April 1st 2025 and will run for three years. The project aims to strengthen communities‘ ability to developing tourism as a regeneratve force that supports local economies and societies in the long term.

Tourism has become a key driver of economic development in northern regions, but its growth brings significant challenges. A critical issue is the disconnect between tourism revenues and their reinvestment in the destination communities and ecosystems that attract visitors. In many cases, the responsibility for maintaining infrastructure, services, and environmental protection falls to residents, many of whom are not directly involved in the tourism sector.

“Tourism has the potential to be a long-term livelihood for northern communities, we need systems that ensure tourism benefits both nature and society. RETURN seeks to develop tourism in a sustainable and mutually beneficial way between visitors and destinations,” said Ari Laakso, science communicator at Arctic Centre, University of Lapland, and the initiator of the RETURN project.

A key objective of the project is to assist local governments and authorities in developing transparent and effective methods for using tourism-generated revenue to fund infrastructure, conservation efforts and service improvements. This approach not only ensures that the benefits of tourism are distributed fairly but also encourages a greater sense of responsibility and participation among tourists.

The RETURN research team consists of experts from across the NPA region, including Iceland, Greenland, the Faroe Islands, Sweden, Norway, Ireland, Scotland, and Finland. The project is led by the University of Lapland in Rovaniemi.

The ITRC team consists of Dr. Johannes Welling, researcher, and Guðrún Þóra Gunnarsdóttir, director who serves as the contact person for Iceland - gudrunthora@unak.is. In addition, the Icelandic Association of Local Authorities and Visit West Iceland play an important role as associated partners in the RETURN project.

For more information about the project, please contact RETURN Project Manager Mr. Ari Laakso, ari.laakso@ulapland.fi, +358(0)40-4844293.