The capital Reykjavik is by far the largest city in Iceland. Over ******* people live in the capital. The second largest city, Kópavogur, is located just outside of Reykjavik and has close to ****** inhabitants. Also the third largest city, Hafnarfjörður, can be found close to the capital. More than ******* people live in Iceland.

Graph and download economic data for Geographical Outreach: Number of Branches in 3 Largest Cities, Excluding Headquarters, for Commercial Banks for Iceland (ISLFCBODCLNUM) from 2011 to 2015 about branches, Iceland, banks, and depository institutions.

Iceland ATMs in Largest Cities - Historical chart and current data through 2015.

This statistic shows the degree of urbanization in Iceland from 2013 to 2023. Urbanization means the share of urban population in the total population of a country. In 2023, 94.04 percent of Iceland's total population lived in urban areas and cities. The population of Iceland Iceland is currently 94 percent urban, making it the eighth most urban country in the world. However, even though the majority of the population lives in urban areas, the island itself is not densely populated. The population overwhelmingly lives in the nation’s capital and largest city, Reykjavik, which is located in the southwest corner of the island and is considered the northernmost national capital in the world. Reykjavik is only home to around 120,000 people and has more of a suburban feel to it than that of an urban metropolis. Reykjavik has become the home base for the country’s booming tourist industry for those who want to venture out to explore the island’s vast wilderness. In 2014 alone, there were around 4.4 million tourists who stopped on the island for a short stay (413264). The two second largest cities, Kopavogur and Hafnarfjour, are also located very close to the capital, and are each home to around 30,000 people- significantly less than the population of Reykjavik. In total, the small island nation reports a population of around 330,000 people as of 2015, and these figures are not likely to grow significantly in the future, as the fertility rate is less than the natural replacement rate and annual population growth is also low.

Most of the workforce in Iceland is employed in the area in and around the capital, Reykjavik. Almost two thirds of Iceland's total workforce of 204,900 people work in the capital area, underlining the centralization in Iceland. The southern region has the second largest workforce with 18,000 employees. With only 4,000 workers, the northwestern and Westfjords regions have the smallest number of employees.

In 2021, the flights from Kangerlussuaq to Nuukwere and from London to Los Angeles were the busiest city pairs operated at the country's airports. The number of flights amounted to ***** from Kangerlussuaq to Nuukwere and *** from London to Los Angeles.

Icelandic Restaurant Market Outlook

According to our latest research, the global Icelandic restaurant market size reached USD 2.18 billion in 2024, demonstrating a robust expansion driven by increased interest in Nordic cuisine and culinary tourism. The market is expected to grow at a CAGR of 7.2% from 2025 to 2033, reaching a forecasted value of USD 4.09 billion by 2033. This growth is underpinned by rising consumer demand for authentic and experiential dining, the proliferation of Icelandic-themed restaurants in international markets, and a strong focus on sustainability and local sourcing within the industry.

One of the primary growth factors fueling the Icelandic restaurant market is the global surge in culinary tourism. As travelers seek unique and authentic experiences, Icelandic cuisine—renowned for its fresh seafood, lamb, dairy products, and traditional preservation methods—has gained significant attention. The growing popularity of Iceland as a travel destination has inspired both local entrepreneurs and international investors to establish Icelandic restaurants not only in Reykjavik but also in major cities across North America, Europe, and Asia Pacific. This trend is further amplified by the increasing presence of Icelandic chefs in global culinary competitions and media, which has elevated the profile of the cuisine and attracted a broader customer base eager to explore new gastronomic frontiers.

Another key driver for the market is the shift in consumer preferences toward healthier, locally sourced, and sustainable food options. Icelandic cuisine is often associated with purity and freshness, as it relies heavily on ingredients such as wild-caught fish, free-range lamb, and organic dairy products. This aligns well with the global movement towards clean eating and environmental consciousness. Many Icelandic restaurants emphasize traceability and sustainable fishing and farming practices, making them especially attractive to eco-conscious diners. The integration of contemporary and fusion cuisine offerings has also allowed these establishments to appeal to a wider demographic, blending traditional flavors with international influences to create innovative menus that cater to evolving tastes.

Technological advancements and the digitalization of restaurant services have also played a significant role in the market’s expansion. Icelandic restaurants are increasingly adopting online reservation systems, contactless payments, and digital marketing strategies to enhance customer convenience and engagement. The rise of food delivery platforms has enabled these restaurants to reach a broader audience, particularly in urban centers where demand for international cuisine is high. Additionally, the use of social media and influencer marketing has proven instrumental in promoting Icelandic food culture, generating buzz around new restaurant openings, seasonal menus, and special events. This digital transformation has not only increased operational efficiency but also contributed to higher customer retention and brand loyalty.

Regionally, Europe continues to dominate the Icelandic restaurant market, accounting for the largest share due to the proximity to Iceland and a strong tradition of Nordic culinary appreciation. However, North America and Asia Pacific are emerging as high-growth regions, supported by increasing urbanization, rising disposable incomes, and a burgeoning interest in global cuisines. In North America, cities such as New York, Toronto, and Los Angeles have witnessed a surge in Icelandic restaurant openings, while in Asia Pacific, cosmopolitan hubs like Tokyo and Singapore are seeing growing demand for niche dining experiences. This regional diversification is expected to further drive market growth, as operators tailor their offerings to suit local tastes while maintaining the authenticity that defines Icelandic cuisine.

Type Analysis

The Icelandic restaurant market is segmented by type into Fine Dining, Casual Dining, Quick Service, Café & Bistro, and Other