Varmahlid is a hamlet on road #1 by the crossroads to Saudarkrokur and Akureyri. The village developed around services for travellers and its oldest hotel and restaurant date from 1931. Now Varmahlid offers more hotels and guesthouse accommodations, a supermarket, petrol station, bank, post office, tourist information centre and other facilities. An abundance of geothermal hot water is under the area. Hence a number of greenhouses in the hamlet cultivate tropical and sub-tropical fruits and vegetables. The forestation is in its early stages where woods are being grown for future exploitation. Varmahlid is a school centre for the region. Salmon and trout are caught in nearby rivers and lakes and many places of interest are to be found in the region, which is one of the most historical parts of Iceland. North of Varmahlid is the folk museum "Glaumbaer", which attracts thousands of visitors annually.