The town is named after Saint Thorlak who was a bishop at Skálholt. Its main importance is as a port as it has the only harbour on Iceland's southern coastline between Grindavík in the west and Höfn in the east. The port serves a direct weekly cargo ferry to Rotterdam, operated by faroese Smyril Line. It is also one of two departure points for ferries to the Vestmannaeyjar archipelago. Services include restaurants, tourism, golf course, motocross field, camping, sport complex and a swimming pool. The town has several fish processing enterprises.
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