As a travel podcaster, I’ve explored many countries, but my recent journey through Iceland revealed a story more fascinating than I could have imagined. In this third episode from Iceland, I’ll be diving deep into the country’s recent history, particularly the dramatic economic transformation that reshaped this remarkable island nation.
From Financial Meltdown to Marketing Masterstroke
In 2008, Iceland experienced one of the most severe financial crises in modern history. Their banking system completely collapsed, with the country’s three largest banks expanding so aggressively that their combined assets ballooned to about ten times the size of Iceland’s entire economy. When the global financial crisis hit, these banks couldn’t pay their debts, and international credit markets froze.
The impact was devastating. The Icelandic króna nosedived in value, causing crazy inflation. Families lost jobs, savings disappeared, and many struggled to pay their mortgages. As Alda Sigmundsdóttir, a local author I interviewed, described it, “It was financial devastation.”
The Unexpected Tourism Catalyst
But here’s where the story takes an incredible turn. In 2010, just as the country was reeling from economic collapse, nature intervened. The Eyjafjallajökull volcano erupted, throwing ash clouds into the atmosphere, and shutting down European airspace for five days. What could have been a disaster became a marketing opportunity.
The Icelandic government launched the “Inspired by Iceland” campaign, asking every citizen to help make a promotional video go viral. And it worked brilliantly. Instead of scaring people away, the volcanic eruption put Iceland on the global map.
From Half a Million to Millions:
The Tourism Explosion
The numbers are staggering. In 2010, Iceland welcomed about 500,000 tourists. By 2018, that number had skyrocketed to 2.6 million – more than five tourists for every single Icelander. The country’s population is just around 370,000 people.
Locals like Asbjørn and Helga, who I met during my travels, have mixed feelings about this tourism boom.
“It’s terrible. Some places cannot keep all these tourists. We don’t have enough roads, parking places, or facilities to handle such massive numbers.”
The Pandemic’s Silver Lining
Interestingly, the COVID-19 pandemic provided an unexpected respite. Alda shared a surprisingly positive perspective:
“It was heaven for us Icelanders. We had our country back.”
Tourism companies offered incredible deals to locals, creating what she described as a “national festival” where Icelanders explored their own country.
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The Westfjords:
Iceland’s Hidden Wilderness
As my conversation with Helga and Asbjørn continued, I discovered a part of Iceland that most tourists never see: the Westfjords. This north-western region is like a giant claw reaching into the North Atlantic, a wild and remote landscape that only about 10% of visitors ever explore. When Asbjørn and Helga, locals from this region, spoke about the Westfjords, their eyes lit up with pride.
“Get out of Reykjavik! There are not so many tourists there.”
The Westfjords is a place where you can truly experience Iceland in its raw, unfiltered form. It’s a geographical marvel. With twisting roads that hug coastal cliffs, it feels like you’re driving on the edge of the world. Imagine a landscape with sheer 444-meter cliffs, diverse beaches (both black and yellow sand), and an abundance of wildlife. Puffins nest in the cliffs, arctic foxes roam the tundra, and whales and seals populate the surrounding waters.
Dynjandi waterfall, described as the region’s crown jewel, cascades like a bridal veil – a sight that’s every bit as magical as it sounds. As Asbjørn put it:
“Everything is slower here. You sleep better, you have more time to talk.”
Driving the Ring Road:
An Epic Adventure
For those truly wanting to explore Iceland, a complete circuit of the island. The entire ring road is about 1,700 kilometers, and you should take least a week and a half. But consider adding the Westfjords to the trip and do what I call “The Ultimate Ring Road Road-trip”.
The Magic of Northern Lights
One of the most enchanting aspects of Iceland is the Northern Lights. Asbjørn’s enthusiasm was infectious when he talked about them. “Every time you see it, you stop and look up and enjoy it,” he told me. The key ingredients? A northern wind, temperatures below zero, and a clear sky.
Cultural Insights:
Icelandic “Hygge”
My conversations with locals like Alda revealed fascinating aspects of Icelandic culture. Take driving habits, for instance. Alda laughingly critiqued her compatriots’ tendency not to use indicators or follow traditional lane discipline. Or their approach to social interactions – Icelanders are apparently notorious for being “homebodies” who take immense pride in their homes.
The concept of “hygge” – that cosy, comfortable atmosphere – isn’t just Danish. Icelanders have embraced it too, especially during their long, dark winters. Candles, warm interiors, and meaningful conversations are their way of surviving and enjoying the harsh season.
Practical Travel Tips
If you’re planning to visit Iceland, consider these insights:
- Visit during the shoulder seasons to avoid overtourism
- Explore beyond Reykjavik, especially the Westfjords
- Be prepared for unpredictable weather
- Take time to interact with locals
- Don’t rush – Iceland is about experiencing, not just seeing
A Personal Reflection
Iceland offered me more than just beautiful landscapes. It provided a window into a resilient culture that has transformed economic challenges into opportunities, cherishes its natural beauty and maintains a unique way of life.
This journey through Iceland was nothing short of extraordinary. Want to hear more? Check out the full podcast episode and join me for the last episode from Iceland next week, where I talk more to Alda, Helga and Asbjørn.
My name is Palle Bo, and I gotta keep moving. See you.
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