Iceland suffered a sharp economic downturn in spring 2008. The country's bank loans had been too dependent on cheap foreign capital, which dried up after the "credit crunch" hit the U.S. economy. Iceland's currency, the krona, declined 22% on average against foreign currencies. In mid-May, other Scandinavian state banks helped stabilize the krona, and exchange rates rebounded by about 5%. We don't mean to celebrate Iceland's recent misfortunes, but the fact of the matter is that Iceland's recession is a windfall for travelers. Iceland remains one of the world's most expensive countries, but costs are now far less prohibitive. Keep in mind, however, that goods imported to Iceland -- notably gasoline and food -- remain just as expensive as before.
With the weak krona, you might expect to see Iceland swarming with bargain-hunting tourists. Thus far, however, the numbers are roughly equal to last year's, and pressures on tours and accommodations are no worse than usual. Iceland is indeed claiming a larger share of world tourism this year, but world tourism has declined somewhat overall, for a net zero effect. Despite Iceland's banking crisis, no major hotels or tourist businesses have been forced to close. As for the Icelandic people, they've faced far worse catastrophes than this, and basically go about their business as before.
Because of the krona's instability, this year more and more Icelandic tour companies and accommodations will accept credit card and cash payments in dollars and especially euros. (North Sailing, a whale watching company in Húsavík, is one example.) When you do have a choice of currencies, check current conversion rates to see which is a better deal at the time of purchase. If you commit to pay at a later date, choosing the dollar or euro may carry less risk.
Despite protests, the Icelandic government set a commercial whaling quota of 40 minke whales for 2007, down from 45 in 2006. (Willing visitors can still get their fill of whale sushi.) Iceland's fast-growing whale watching industry is lobbying for a whaling ban.
The Hollywood 3-D remake of Journey to the Center of the Earth -- set in Iceland, and partially filmed there -- was released in summer 2008. In what was a special effect bonanza, a geologist (played by Brendan Fraser) and his hot Icelandic guide (played by Iceland native Anita Briem) enter the earth's core through west Iceland's Snæfellsjökull mountain, and heroically fend off a host of giant lizards.
In more timeless news, a clam discovered off the north Icelandic coast is the longest-lived animal yet discovered. Nicknamed Ming, for the Chinese dynasty in power when it was born, the ocean quahog clam was aged between 405 and 410 years -- at least 31 years older than the previous record holder (also a clam). Ming was alive when Shakespeare wrote Hamlet, but did not survive the shock of being dredged from the ocean floor. The British charity Help the Aged has granted scientists £40,000 to study Ming's secrets of eternal youth.
Reykjavík
In the capital's old harbor neighborhood, the new Icelandic-French restaurant Orange (Geirsgata 9; tel. 561-1111; www.orange.is) is grabbing attention with playful theatrics. Goldfish bowls and futuristic LED lighting set the mood, while dishes range from eel or pigeon to veal or langoustine, and desserts include ice cream concocted at your table with the aid of liquid nitrogen.
Orange's excellent food transcends all the gimmickry, but Fish Market (Aoalstr??ti 12; tel. 578-8877) is still the pick of the new restaurants, without straining so hard for effect. Head chef Hrefna Rósa Sætran trained at the Seafood Cellar (our favorite Reykjavík restaurant) and her ingenious concoctions include a "Philadelphia maki roll": a sushi roll with tuna, cream cheese, cilantro and fried onion shavings from Bæjarins Bestu, Iceland's premier hot dog stand. Icelandic lamb is served with a fantastic tamarind sauce; another triumph is the deep-fried monkfish with Chinese spinach. Reservations are an absolute necessity in summer, even on weekdays.
A new Hreyfing fitness center (Álfheimar 74; tel. 414-4000; www.hreyfing.is) -- in a rather inconvenient Reykjavík neighborhood, near the south tip of Laugardalur Park -- includes the first outpost of Iceland's top tourist attraction, the Blue Lagoon Spa (www.bluelagoon.com). (The Blue Lagoon's management is looking to London next.) The floating massages are sublime, and natural materials (algae, silica, lava) are brought in from the lagoon itself for regenerative treatments.
West Iceland
The remote Westfjords region -- which already has a museum dedicated to sorcery and witchcraft -- is adding museums dedicated to pirates and sea monsters. In Patreksfjörour, near the Westfjords' southwest corner, Sjóræningjahúsio ("Pirate House") (Vatneyri; tel. 845-5366; free admission; June to mid-September) is already up and running in a former smithy. It specializes is English piracy in Iceland during the late 16th century -- not the Algerian variety that wreaked havoc later on. For this year Sjóræningjahúsio is just a small gallery with a cafe and playground, but in 2009 a labyrinthine "fun house"-style exhibit (and an admission price) will be added.
Nearby, in the tiny fjord village of Bildudalur, the sea monster museum is preparing for its 2009 launch. Bildudalur is certainly the museum's natural home, since the fjord is a mecca for sea monsters, every one of which has been spotted there -- including a notorious "sea cow" garlanded in sea shells.
North Iceland
Akureyri, Iceland's "second city," has launched the informative new travel website www.visitakureyri.is. The site lays out all accommodation and dining options, as well as nightlife venues, museums and galleries, and other activities, including new historical walking tours on Thursday, Friday and Saturday evenings in summer (3000kr). Also be aware that the information center's phone number has changed to tel. 553-5999. Unfortunately the city's stylish Guesthouse Hoepfner has closed.
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