During the first weekend in August, Icelanders take to their cars and head out of town to camp in the wilderness or join in one of the many organized events that are held throughout the country. These range from family-style gatherings to outdoor rock festivals.
Below is some more information about the holiday weekend courtesy of Visit Iceland.
Verslunnarmannahelgi Weekend (Jul 30-August 1)
This is the Icelandic version of Labor Day Weekend, a time when normal urban folk travel in the thousands out to the countryside to spend the weekend in tents and summerhouses. There are numerous events organized throughout the country this weekend, the most famous of which is a huge concert festival on the Westman Islands. If you stay in Reykjavik, you’ll have the bars and restaurants to yourself.