The area around Dyrhólaey where this picture was taken is rocky with black sandy beaches. Many of the rocks around Dyrhólaey have these kinds of holes in them.
In fact the rock Dyrhólaey is a rock that sticks out into the sea and it has a big hole in it and it gets its name from this hole as it forms a kind of door (dyr) in the rock.
This hole is so big that when the sea is calm boats can sail through it and once a small airplane was flown through it. Unfortunatly I did not have time on this trip to get into postition to get a picture of the hole.
I´m hopin I will be around there taking pictures on my annual phototrip on Dec. 26th and then I´ll get some photos of it.