Steamy Arctic nights

White nights and boiling geysers in the Arctic's nightlife capital make for a wild weekend in Reykjavik, which has grown more…

White nights and boiling geysers in the Arctic's nightlife capital make for a wild weekend in Reykjavik, which has grown more affordable since the country's financial troubles started, writes Elgy Gillespie

ICELANDIC WRITERS such as Halldór Laxness, Arnaldur Indridason and Yrsa Sigudardóttir, as well as the singer Björk, have riffed feelingly about the effects of insomnia and its tendency to make you party like a rock star until you lose all sense of decency and sobriety. These days the party mood may be a distraction from the financial disaster facing a country that has discovered its banks are bankrupt.

I was in Reykjavik in high summer, when you won't get much sleep, what with the clubs still rocking at 8am during the almost continual daylight. Officially the sun sets at 12.05am and rises before 3am in Iceland's just-inside-the-Arctic Circle midsummer, but you may not notice.

Insomnia plays upon the hot-and-cold of Icelandic imaginations. It feeds the stereotypes of islanders who, Björk says, "believe in spirits and elves . . . and I've played up that a bit myself".

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Luckily, if the other moonshine takes its toll in the Land of the Midnight Sun, a natural cure is at hand. A dozen hot springs bubble all around the capital, including Sundhöllin's "hot holes" and Hverageri's Laugaskar spa. In winter, homes are heated with natural gas from "hot spots" from the earth's core, and you may even catch the Northern Lights between October and January. This spectacular sight will cost you about 20 per cent less this winter than last, now that the krona has slumped to a rate of about 6.65 to the euro.

If you've read your Jules Verne, you'll remember Iceland is a lava "lid" that overlays recent volcanic upheaval, resulting in boiling geysers known as the "Icelandic plume". Verne's Journey to the Centre of the Earth describes descending volcanic tubes to find a hollow inner world with dinosaurs and sea. Okay, that was fuzzy science, but you'll find that chronic insomnia and strolling around lava enhance this kind of notion.

Just half an hour's bus ride from Keflavik International Airport, and bubbling away in a black lava field, is the world's most popular spa, the ultramodern Blue Lagoon. Simply put, it's blissful. You can walk in between changing flights here, clutching passport and cash; plenty do. For €12 or €13, or 1,700 Icelandic kronur, you get a "smart" armband, then find yourself in futuristic changing rooms, using the band's embedded chip for lockers, swimsuit, towels, moisturisers, hair gel, dryers and more.

Beyond these, you wade into a series of volcanic rock pools of steaming seawater, at about 38 degrees, that glistens with pearly, milky, silica-rich mud, and I vanished in their enshrouding mists.

White silica pore-refining facials make everyone a dead ringer for Marcel Marceau. There's a mini-waterfall that pummels your tired neck and shoulders, plus lava-cave steam bath and silica-mud bath, salt-glow body polish and a blitz guss, which turns out to be - aghhhh - an icy Icelandic hose down.

Floating around the massage pool, awaiting my turn, I overheard whispers from other white faces in the mists. Sound carries strangely here, intimate murmurs in Danish, Italian, Japanese and Turkish, interrupted by random squeals. Surprise goosings from bubbling jets from deep below earth's crust created another kind of out-of-body experience - literally boiling geezers.

The minerals alleviate arthritis, psoriasis, eczema, whatever ails you, hence the on-site clinic. Psoriasis treatment is a specialty. In summer you get views from surrounding walkways 24 hours a day. Lava stretches endlessly. Turn the other way and you peer into the steamy crater that feeds the lagoon and hear the Atlantic beyond. There's a spotless cafe (try the yogurt, or skyr) to boot.

Once rejuvenated it's time to grab a bus to downtown Reykjavik. Imagine a picturesque village capital of red and yellow homes that's small enough to enable you to walk everywhere - population 111,000 - and puts you in mind of Noddy's Toytown. First on the list is the concrete bulk of Hallgrimskirkja, the somehow comical Valkyrie-style church looming above the main shopping drag of Laugavegur.

Iceland is full of wackiness and elves-and-trolls humour. You'll find some at the Bad Taste Gallery, or at the amusing Grai Kotturinn Gallery, which has a great cafe. Reykjavik is also full of fine and fun art; try the Museum of Photography and National Gallery of Art. Check books by the photographer Ragnar Axelsson for the visual side of things.

Or just kill time in the bookshops of this highly literate island, where Icelandic classics come ready translated into English. Ever wondered why Iceland enjoys so many writers, playwrights and journalists - known as blathamathurs in native Norse? ("Th" is really the Norse letter "eth".)

Only long winters, insomniac summers and notorious hot-and-cold hoax-playing Icelandic imaginations explain it.

Arnaldur Indridason, in his masterly Jar City, and the Nobel laureate Halldór Laxness talk about the Icelandic gene pool. But DNA studies of islanders reveal Irish contributions - womenfolk carried off by Vikings from 11th-century Wexford and Dublin, perhaps?

So Icelanders are partly Irish, and does that clarify things at all? If so, we deserve compensation for our female ancestors in passports, Icelandic poitín - and puffins. I'd always romanticised our marauding Viking cousins, but whatever about their appetite for life, their appetite for puffin was news.

Puffin? It's one national dish in what turns out to be a very robust diet. Dinner is at 9pm, by which time most natives have sunk a few at home. Puffin comes marinated in Brennivín, local potato alcohol. The a-la-carte menu at Laekjarbrekka ("river hill"), on Reyjavik's Bankastraeti, is a sight for bloodshot eyes: reindeer carpaccio with capers and duck confit, trout-roe caviar with beetroot, salmon with cauliflower mousse and cornbread . . .

Laekjarbrekka also boasts the most beautiful waiters on earth. They don't need to go to waiter school and they discourage tipping. "It's so expensive in Iceland, and service is included," they say apologetically.

Founded by a Danish baker called Knutzden (Denmark colonised Iceland), this 1834 inn has a corrugated red-tin roof with black-and-white-trimmed windows, lace curtains against wine-red walls, kitschy engravings and Cupid-encrusted bar, all a heartwarming sight.

Lobster bisque is the equivalent of about €8, sparkling water about €2.75; gourmet lamb with Icelandic herbs, lobster platter and shellfish appetisers each came to about 1,900 kronur, or €12 apiece in today's money. Go for smoked or marinated puffin from the low-calorie puffin menu (90 calories). I would like to say puffin tastes like chicken, but to me it tastes like puffin.

Among Icelandic desserts, skyr is the creamiest mix of yogurt and curd cheese imaginable, served with rhubarb. After my Adonis brought me free port and chocolates with the bill and espresso, my four-course blowout with four glasses of wine was €80 but today would cost €70, or 10,500 kronur. I forced a modest tip on him.

Drifting downhill to Cafe Rosenberg for live music, I found atmosphere and reasonable prices; ditto at funky nearby Caruso Provid Cafe. Clubbing is inevitable here, so pony up for €13 beers and stay awake. Classier joints include Kaffibarinn, an intimate bar; the young and thirsty fill Cafe Oliver and Sirkus, which is a bit of a circus, right enough.

I "stayed" at Thar Guesthouse, but truth be told I hardly saw it, and you won't need a fancy hotel.

Last but not least: remember to claim back VAT on buys before departure, then go for a hot dog with everything on it at Baejarins Beztu Pylsur hot-dog stand, on Pósthússtræti. This one carries the personal testimonial of Bill Clinton. They deny categorically it caused his heart attack, but then they would, wouldn't they?

Where to stay, eat and go in Reykjavik

Where to stay

High-end city centre: Hotel Odinsve, Thorsgata 1, 101 Reykjavik, 00-354-511-6200. Double rooms are 31,900 kronur (€264 last summer, equivalent to €213 now, and half that in winter).

The official site for booking accommodation in Iceland is www.randburg.com/is/tourism/acco/.

Camping is very popular in summer. It costs about 700 kronur, or €6 - €4.75 now - per night.

I stayed at a comfy private guest house through Hostelworld.com, adjacent to Thorsgata, which cost €70 for a double room, including a shared bathroom.

Where to eat

Learn these words by heart: hangikjot (smoked lamb), lundi (puffin) and skyr (yogurt).

Laekjarbrekka, Bankastraeti 2, 101 Reykjavík, 00-354-551-4430, info@laekjarbrekka.is. This is a classic Icelandic restaurant for an authentic dining experience and is situated in the heart of Reykjavík.

Restaurant Einar Ben, Veltusundi 1, 101 Reykjavík Iceland, 00-354-511-5090. This is an old 18th-century city favourite on the main square with a lobster, shark and shellfish menu. Its Red Bar, upstairs, serves drinks and snacks.

There is also a good choice of bars and gastro bars in Reykjavik. Icelandic for "I want beer" sounds like Yeg vill byor. There is no word for please, but thanks is takk.

Café Rosenberg (Laejargata 2, 101 Reykjavik) is a pub and restaurant with live music and reasonable prices for drinks or casual dining.

Perlan (or Pearl Cafe, Oskjuhild, 105 Reykjavik) is an elegant restaurant with a cheaper cafe bar below selling beers and ice cream, and with a knockout view.

Súfistinn is a cafe upstairs at the Málog Menning bookstore. You can take a book with you.

Organic Kaffi Hljómalind (Laugavegi 23, 101 Reykjavik) is one of the very few co-ops in Iceland. It gives its profits to charity.

Where to go

National Museum of Iceland is at Sudurgotu 41, 101 Reykjavik. Saga Museum, Perlan, 105 Reykjavik, 00-354-511-1517.

Maritime Museum is in a big Viking boat on the harbour.

There are too many museums to list. All charge about 500 kronur (about €3).

For modern art visit i8 Gallery (Klapparstígur 33, 101 Reykjavik, 00-354-551-3666).

Shopping

Be warned: designer boutiques abound, but stores close on Sundays. Laugavegur is the main drag; it has the ritziest names and craft shops.

Skolavordustigur, in the city centre, is a fashion mall for Icelandic specialities such as fish-skin handbags and hand knits.

Kringlan shopping mall has chainstore clothing. Smáralind has high-end boutiques.

There's a big flea-market scene here. Kolaportid weekend flea market, at the Old Harbour, does stay open on Sunday; it sells vintage clothing, second-hand books and unusual home buys.

Remember to claim back VAT at the airport.

Airport transfer

Transport is with the Flybus, which provides an €8 hourly bus service to the Blue Lagoon and regular half-hour trips into Reyjkavik. Left luggage is a desk in the BSI Terminal.

Around town

When checking an address, if it's 101 Reykjavik it means city centre - where bohemian bars and cafes are minutes away on foot near the bus station at Laekjartog, the main square. North Reykjavik is the harbour area, with fun fish cafes. South Reykjavik has expensive shops and hotels.

All these areas are within comfortable walking distance of each other.

Budget travel

Stick to hot dogs (pylsas) and forgo restaurants and hotels if on a tight budget. You can have a ball on a day trip, with a giant hangover, fuzzy dice, fuzzy memories and Icelandic yogurt for souvenirs.

Hostelworld.com will get you a sleeping-bag spot online, or affordable guest houses. For high-end hotels see the website listings below.

Currency

1,000 kronur buys about €6.65 - a better exchange rate for visitors than before the global banking crisis. When I visited the rate was €8 per 1,000 kronur.

For easy currency conversion, print out round sums from www.xe.com/ucc/ to stuff into your wallet.

Clubbing

Sirkus, Klapparstígur 31, 00-354-563-1750.

Kaffibarinn, Bergstadastraeti 1, 00-354-551-1588, www.kaffibarinn.is.

Café Oliver, Laugavegur 20a, city centre, 00-354-552-2300, www.cafeoliver.is.

Hot dogs

Laekjartorg Square, down by the Old Harbour, has the best hot dog stalls. Icelandic for "One hotdog with everything on" is Eina meth öllu (pronounced "ayna meth utloo").

Tourism centre

Reykjavik Tourist Information Centre, Bankastraeti 2, 101 Reykjavik, 00-354-5623045.

Usefully, the 24-hour Reykjavik tourist card will get you into everywhere for €8, or 1,250 kronur.

Useful websites

www.icelandreview.com

www.icelandtouristboard.com/news

blog.icelandexpress.com/iceland

www.grapevine.is

Icelandair (www.icelandair.co.uk) flies to Keflavik International Airport, about an hour from Reykjavik, from Dublin, Cork, Shannon and Belfast. Flights go through London Heathrow. Other carriers also offer connecting flights. SAS (www.flysas. com), for example, offers routes through Copenhagen. For a full range of options, try internet booking sites such as www.ebookers.ie or www.lastminute.com