Tourists flock to crisis-stricken Iceland

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.

More than 10,500 Canadians visited the country last year, a rise of 68 per cent 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 plummeted by 44 per cent in 2008.

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.

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.

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 Saturday in a general election. "Tourists have replaced the local people in the bars of the capital," says 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," Mr Valdimarsson says, adding: "Fortunately there are tourists."