Laugarvatn means a "lake for bathing." The lake itself in southwest Iceland is only two square km in size and quite shallow. But, the lake bottom is riddled with hot springs, making it suitable for bathing throughout the year. Curiously enough, these qualities didn't attract people to settle in the area. For centuries, only farmland and moors surrounded the lake until 1928, when a boarding school was built at Laugarvatn.
Soon a small village developed. Realizing the lake's potential, the newcomers built a small sauna hut on the lakeshore. It became increasingly popular amongst the Icelanders, and Laugarvatn developed into the number one summer holiday destination on the island. So much so that a permanent caravan site developed on the outskirts of the village.
Further schools were built in Laugarvatn: A college of further education and a school for homemakers. The latter was shut down late last century, and its buildings were sold to the University of Iceland. It now houses the Sports and Health Science faculty.
Laugarvatn is a great place to take a break and relax when traveling around Iceland. It has an excellent swimming pool with a very good sauna. You will find hotels and guesthouses, restaurants and a grocery shop, cafés, handicraft shops, and a great camping site.