Tourism in Iceland has grown considerably in economic significance in the past 15 years. As of 2016, the tourism industry is estimated to contribute about 10 percent to the Icelandic GDP; the number of foreign visitors exceeded 2,000,000 for the first time in 2017; tourism is responsible for a share of nearly 30 percent of the country's export revenue.
Reykjavík is the capital and largest city of Iceland. It is located on the southern shore of the Faxaflói bay in southwest Iceland and has a latitude of 64°08′ N, making it the world's northernmost capital of a sovereign state. Reykjavík has a population of around 139,000 as of 2025, and the surrounding Capital Region has a population of around 249,000, constituting approximately 64% of Iceland's population.
According to Landnámabók, the settlement of Iceland began in Reykjavík when Ingólfur Arnarson arrived from Norway in the year 874. For over 900 years following this, there was no urban development; the city was officially founded in 1786 as a trading town and grew steadily as it transformed into its current state as the centre of Iceland's cultural, economic, and governmental activity. It is popular with tourists and is consistently ranked as one of the cleanest, safest, and most environmentally friendly cities in the world.