Iceland is a wondrous and magical place no child will ever forget. Most tour companies welcome children (with the exception of the most rigorous trips, of course) and charge 50% less for children under 12. Discounts are usually available for transportation and tourist attractions, and sometimes for accommodations as well. Air Iceland, the main domestic airline, offers 50% off for children ages 2 to 11 when tickets are booked over the phone; even greater discounts may be available online.
A widespread Icelandic custom is for hotels, guesthouses, and farm accommodations to offer "family rooms" sleeping three to five people, sometimes with cooking facilities. Even youth hostels commonly have family rooms. Often an accommodation has only one or two such rooms; the only way to be sure is to ask. In the Fosshótel chain (tel. 562-4000; www.fosshotel.is), one child under 12 stays free per room (Fosshótel's prices generally aren't cheap, however). The recommended Icelandic Farm Holidays network of farm accommodations (tel. 570-2700; www.farmholidays.is) is usually cheaper than hotels and offers children a glimpse of Icelandic country life.
Whale-watching is an obvious choice. Horseback riding is great even for totally inexperienced children, since Icelandic horses are small, even-tempered, and manageable. Horse farms are spread all over the country, so a hired ride is usually within easy reach. Bird-watching may seem like the last thing your child would be interested in, but sidling up to a remote cliff edge and gazing down at the crashing surf, while puffins perch close by and other birds glide upward in the wind currents, is quite a thrill for anyone. Virtually every village in Iceland has a geothermally heated swimming pool, many with water slides, toys, and games for children. Remember: Iceland cannot possibly install guard ropes and warning signs at every location that poses danger to children, so mind them at all times.
Iceland is a safe and personal enough country that parents may feel comfortable leaving their children with local babysitters. You can always ask the staff at your accommodation to recommend someone.
Family Travel Forum (www.familytravelforum.com), a comprehensive site, offers customized trip planning and has plentiful information on Iceland. The recommended book Frommer's 500 Places to Take Your Kids Before They Grow Up includes a few Iceland locales.
Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.