According to specialist travel operator iceland2go, tourists are beginning to view Iceland as a more inexpensive destination as the eurozone becomes increasingly expensive.
Ray Steward, marketing manager at the firm, said:"Reykjavik as a city break destination has been somewhere where people have perhaps wanted to go to but have been put off by the cost.
"Now people are thinking that it is comparable with most European capital cities so why not go this year."
Hotels and restaurants are also lowering their prices to attract more custom and more holidaymakers have been visiting for short breaks as a result, he added.
Mr Steward recommended a trip to the country as a great chance to do something different, such as see the spectacular Northern Lights or book a Super Jeep tour.
His comments follow news the airline Iceland Express has announced that it will be reinstating its Stansted to Reykjavik service following increased customer demand for flights.
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