I'm pondering going to Iceland for 2-3 weeks sometime during May/June. The vague plan I have at present is to rent a car and do a loop around the island. Ideally I'd like to make up my itinerary as I go, not booking any accommodation in advance. However, from what I've read so far, June is starting to be high season. What does this mean effectively for accommodation (especially hostels or equivalent)? Can I just rock up in small villages during the afternoon and expect to get a single room most of the time, with fallback to a bed in a dorm no more than once or twice a week? Or should I really be booking things in advance? (And if so, how much in advance?)
Also, what effect (if any) should I expect the economic troubles to have had in Iceland as far as traveller infrastructure is concerned?
There is absolutely no need to book a room in advance when visiting Iceland. I've done your itinery, pretty much - and it'll be easy for you. Just bear in mind, although they had some trouble with finances awhile back (no need to detail it - as I'm sure you know what went on in full), it's still one of the world's most expensive countries - and I mean it's really so expensive. You may be better off bussing it round the island, rather than hiring a car - especially if there is more than one of you going.
On the positive side of things, it's a truly remarkable destination and so incredibly beautiful.
Thanks! That helps take away a lot of 'worry' about advance planning.
As for it being an expensive country, I figure that with me getting nearly 50% more Icelandic Króna for my Euro than I'd get a year ago, and twice as many as two years ago, there's really no better time to visit than right now.