Egilsstaðir

East Iceland's main service town and transport hub, sitting beside Lake Lagarfljót — which locals say has its own Loch Ness-style monster (the Lagarfljótsormur). The town itself is functional rather than charming, but it's the natural base for exploring the Eastfjords and has the region's only domestic airport with flights to Reykjavík (about 1 hour).

The real draw is the surrounding region. The Eastfjords drive south from Egilsstaðir to Höfn is one of Iceland's best road trips: narrow fjords, tiny fishing villages (Seyðisfjörður, Fáskrúðsfjörður, Djúpivogur), and almost no other tourists. East Iceland is also the only place in the country with wild reindeer herds — you'll sometimes see them grazing by the road.

Egilsstaðir is 650 km from Reykjavík (about 8 hours' drive on Route 1, or a 1-hour flight). The town has supermarkets, fuel stations, and a few decent restaurants. Seyðisfjörður, 25 km east over a mountain pass, is much prettier and worth the detour — it's also where the ferry from mainland Europe arrives.