ICELAND

GENERAL INFORMATION

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GEOGRAPHICAL OVERVIEW

The Nordic island of Iceland covers an area of 103.00km2 and has a population of just over 350,000, making it the most sparsely populated area in Europe. The main airport of the island is Kevlavik Intl Airport, located in the Southwest of the island and around 50km from the Icelandic capital Reykjavik. Around two thirds of the population live in Reykjavik or the surrounding area while the towns and villages in the rest of the country have mostly a population of under 10,000. Iceland can be split up into eight different main areas, seven of those are connected by the 1,300km long ring road, which takes you around the whole island and to many of the biggest attractions of Iceland.

ADMINISTRATION

Iceland is a constitutional republic with a multi-party system, where the head of state is the president while the prime minister is the head of government. The country is divided into eight regions, which are further divided into 77 municipalities that look after most local matters directly.

ECONOMY

The Icelandic economy crashed during the recession and the Icelandic krona has only slowly recovered to its pre 2008 level. The recession hit just shortly before the eruption of the Eyjafjalljökull volcano in 2010, which caused major flight disruptions all across Europe in April and May 2010. While eruptions are rather common and nearly part of everyday life in Iceland, the international attention was new, but the Icelandic tourist board made the most of it It was then when the “Inspired by Iceland” campaign started, which resulted in exploding visitor numbers in the following years. Besides tourism, fisheries and aluminum are the biggest exports of the Icelandic economy. Iceland is the second biggest fisheries nation in the North East Atlantic after Norway.
Despite the recession, prices remained high due to the high amount of imports. State and providers alike recognized the potential in tourism, bringing higher VAT rates for the hospitality sector and high prices for accommodation and providers, which increased up to 20% per year. It remains to be seen when tourism will gain momentum after the pandemic, but it is not expected to reach pre-Covid levels for a couple of years.

General Information

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