Iceland travel guide

Many Icelanders lost their savings, inflation spiralled, wages fell up to 25 percent, and many Icelandic assets abroad were frozen. Aid came via vast loans from the IMF and Scandinavian neighbours. Iceland also showed typical determination to deal with things their way. First, there was an admirable refusal by the government to bail out its disgraced bankers, forcing them to take the hit and the shame for their greed-fuelled stupidity and arrogance. The government devalued the currency by half, boosting exports for key industries like fishing. And slowly but surely, Iceland has clawed its way back to economic stability.

A key driver of this recovery has been tourism. Back in 2010, Iceland received fewer than half a million tourists, but according to the Icelandic Tourist Board, almost 2.2 million people arrived in 2017. The Iceland government has welcomed tourists, taking the more is more approach and resisting any form of regulation, allowing tourists to view famous sites without paying a penny. It has worked, financially, but the inevitable pay off is that the Reykjavik region now suffers from overtourism; essentially, too many people visiting at the same time and in the same area. It means this region of Iceland experiences all the negatives associated with high visitor numbers – infrastructure deterioration, the rise and rise of Airbnb changing the domestic landscape, and inflated house prices – as well as trousering the tourist buck. It’s a huge issue that has provoked a great deal of head scratching by Iceland’s government and tourism leaders but, so far, little in the way of effective legislation.

In the old Viking days – from the 8th to 12th century – Icelanders would probably have butchered their bankers, raided richer neighbours or sailed off to find new lands (as they did Greenland) – then written a saga about it (sounds good to me...). The 14th century ushered in centuries of largely unwelcome Danish rule, gradually eroded from the late 19th century onward. But final independence only came in 1944, after a spell of occupation by British then American forces during WW2. A formal US military presence remained through the Cold War, only ending in 2006. During those decades, Iceland rebuilt and modernised. A key factor was a booming fishing industry – which brought Iceland and the UK to blows in the 1970s 'Cod Wars' that saw nets cut and ships rammed on both sides. Fishing remains a key driver of Icelandic wealth – and attitudes to things like whaling.