With Iceland\’s economic meltdown sending its currency into freefall, tourists who saw this remote North Atlantic island as prohibitively expensive are now flocking to its dramatic volcanic scenery.


“Last year you got 60 kronur for one dollar, today you get 105 kronur,” said Will Delaney, a 22-year-old student from Canada who, like thousands of others, has taken advantage of the current exchange rate to see Iceland.

More than 10,500 Canadians visited the country last year, a rise of 68 percent from 2007, contributing to an overall total of 502,000 tourists in the nation of just 320,000, according to Iceland\’s tourism board.

“The collapse of the banks had an effect on the currency, which fell quite a lot,” said tourism board director Oloef Yrr Atladottir.

In fact, the value of the Icelandic currency plunged 44 percent in 2008.

The drop “was not negative for the tourism industry because before the crisis Iceland had become a very expensive destination. It has become a more affordable destination now,” Atladottir said.

Delaney holds that it is now feasible to visit Iceland for just a couple hundred dollars, something unimaginable a year ago, before the crisis hit.

“I\’m staying two weeks. I\’m both working and travelling,” said the student of sustainable resources and renewable energy.

“Iceland is a very good model to study with the geothermal power, and I can travel outside Reykjavik to explore the fantastic landscapes.”

Iceland is known for its breathtaking scenery, including the Blue Lagoon hot springs, spouting geysers, plunging waterfalls, and glaciers and volcanoes, as well as the Thingvellir national park, a UNESCO world heritage site.

Advertisements for national carrier Icelandair have popped up in newspapers everywhere and special promotions are all over the Internet.

Tourism industry springs into gear

Iceland\’s tourism sector, which employs around 8,200 people, has pulled out all the stops to avoid collapse after the country\’s financial sector crashed late last year.

The country\’s three major banks, which had all invested aggressively abroad, were brought down in October by the global credit crunch, forcing the government to take control of them.

Iceland was pushed to the verge of bankruptcy as the economy and currency nosedived, and the right-left coalition government, seen as partially responsible for the crisis, was ultimately forced out of office.

The country\’s economy is now beginning to show signs of recovery, thanks to an international bailout, as Icelanders prepare to go to the polls on April 25 in a general election.

“Some companies in the tourism industry are in difficulty as all over the world. But we haven\’t experienced any mass bankruptcies or closures in the past months,” Atladottir said.

That\’s saying a lot, given that unemployment has more than tripled in the first quarter, soaring to 7.1 percent from 2.3 percent, official statistics show.

“Tourists have replaced the local people in the bars of the capital,” said Johann Mar Valdimarsson, a 26-year-old bartender at a Reykjavik pub.

“Before the inhabitants spent their evening here. Now they start drinking at home and they come here later for a last drink,” Valdimarsson said, adding:

“Fortunately there are tourists.”

He saw the number of tourists dip in October when the crisis erupted, but pick up again in November. And they have kept on coming ever since.