The Reasons Why Iceland Is So Expensive

iStock.com/Leopatrizi
iStock.com/Leopatrizi

More Americans are taking vacations to Iceland, and many are returning home with sticker shock. According to Iceland Magazine, “consumer prices in Iceland are on average 66 percent higher than in Europe,” with costs in the land of fire and ice outpacing famously expensive countries such as Switzerland, Norway, and Denmark.

Just look at the prices for food in Iceland’s capital of Reykjavík: A pre-made sandwich at a grocery store can cost more than $10, while a single teabag (with “free” hot water) can run you $4. A meal for two at a casual restaurant regularly costs in the ballpark of $80 to $100 while a beer at a pub downtown goes for about $12 during regular hours. In other words: Visiting Iceland is sort of like being trapped in an airport ... except this airport has volcanoes.

As for what makes the country so expensive, there’s no single explanation. It’s a combination of politics, economics, and geography.

Let’s start with geography. Since Iceland nearly tickles the Arctic Circle, its climate is not conducive to farming. There are few native crops and the growing season is short. According to a report from the European Consortium for Political Research [PDF], Icelanders produced “64.9 percent of their own food and beverages in 2010.” The rest of that food was imported. The same goes for most other goods.

The cost of importing those products—usually from the UK, Germany, the U.S., and Norway—gets passed on to the consumer. In Iceland, imported sweets and alcohol are slapped with an extra cargo fee and all wheat products are subject to a relatively high tariff. So prepare to shell out for that bread.

The country’s currency also keeps costs high. In 2008, Iceland was plagued by a financial crisis that saw the country’s three banks fail and the value of the national currency, the króna, plummet. But the country has seen a miraculous recovery. Since 2009, the króna has strengthened by a whopping 40 percent against the euro. In 2017, it was deemed the world's best-performing currency. That has caused the purchasing power of the U.S. dollar to decrease.

Taxes also add to the cost. Like most countries, Iceland has a valued-added tax, or VAT. (In the United States, a close equivalent would be the state sales tax.) The VAT for goods in Iceland is 24 percent, while the VAT for foodstuffs is taxed at a discounted rate of 11 percent. For Americans, these tax rates are very high. Most states don’t even charge a sales tax on food at all.

(However, while taxes are a contributor, they are not the cause of high costs in Iceland. Many countries have similarly high VAT rates and are not as expensive. Germany, for example, has a 19 percent VAT—and a 7 percent VAT on foodstuffs—but is home to significantly cheaper groceries than those sold in the United States. It’s also important to know that, as an international visitor, you can get some of your VAT refunded.)

Rather, the biggest contributor to costs in Iceland is the country’s high standard of living. In Iceland, the average pre-tax income is about $60,000, with a median income of about $47,000. (In the U.S., the average income is about $48,150 with a median of around $31,000.)

In Iceland, approximately 92 percent of the country’s working population is part of a labor union. Consequently, people who work jobs that Americans might consider “low-wage”—especially jobs in the service industry—earn much higher wages and enjoy more benefits. In fact, the national monthly minimum wage for most industries is 300,000 ISK, or about $2500 per month. That’s equivalent to $15 an hour. But since employees earn more, customers generally pay more for goods.

And, of course, any tourist complaining about high prices should take a moment to point a finger at the mirror. Since 2010, Iceland has seen tourism multiply fivefold. With a growing number of people competing for a limited supply of goods, prices have continued to rise; the dastardly supply and demand curve strikes again!

Meet LiLou: The World's First Airport Therapy Pig

Kseniia Derzhavina/iStock via Getty Images
Kseniia Derzhavina/iStock via Getty Images

There's a new reason to get to the airport early—you might run into a therapy pig who's there to make your trip a little easier. As Reuters reports, LiLou the Juliana pig is a member of San Francisco International Airport's "Wag Brigade," a therapy animal program designed to ease stress and anxiety in travelers.

Aside from her snout and potbelly, LiLou can be recognized by her captain's hat and red "hoof" polish. She spends the day with guests who are happy to take a break from the pressures of traveling. She might comfort them by posing for a selfie, playing a song on her toy keyboard, or offering them a head to pet.

After bringing joy to people's day, LiLou goes home to her San Francisco apartment where she lives with her owner, Tatyana Danilova. In her free time, she goes on daily walks and snacks on organic vegetables. She even has her own Instagram account.

Airports around the world are embracing the benefits therapy animals can bring to customers. The Wag Brigade program at San Francisco includes a number of dogs, and earlier this year, the Aberdeen Airport in Scotland debuted its own "canine crew" of dogs trained to make travelers feel safe and happy. Therapy miniature horses have even been used at an airport in Kentucky. According to the San Francisco Airport, LiLiou is the world's first airport therapy pig.

To see LiLou turn on the charm, check out the video below.

[h/t Reuters]

The Most Popular Tourist Attractions in Each State

Hot air balloons drifting over the Rio Grande River in Albuquerque, New Mexico.
Hot air balloons drifting over the Rio Grande River in Albuquerque, New Mexico.
Greg Meland/iStock via Getty Images

In 2018, Americans took about 1.8 billion trips for leisure purposes alone, the U.S. Travel Association reports. But what types of attractions do they visit during those trips? Thanks to new data from Groupon and Viator, a TripAdvisor company, we now have the answer.

Map of the Northeast of the United States, showing a few of the most popular tourist attractions in that region
Groupon

Groupon mapped out each state’s most popular travel experience and classified them according to price, type, and region. Tourists in the northeast United States tend to gravitate toward what Groupon describes as “exploration and discovery” activities, like the Founding Fathers Tour of Philadelphia, Maine's Portland City and Lighthouse Tour, and the day trip from Boston to Martha’s Vineyard.

Map of the Midwest region of the United States, listing a few of the most popular tourist attractions in those states
Groupon

The Midwest is by far the cheapest place to vacation, with the cost of attractions in the region averaging about $48. Michigan, Indiana, Ohio, and North Dakota are great states to visit if you’re looking for a top-ranked food tour, while South Dakota, Iowa, Nebraska, and Illinois offer plenty of educational tours and experiences (including a movie site tour for Field of Dreams fans).

Map of the Southern region of the United States, listing some of the most popular tourist attractions in that area
Groupon

Experiences in the South are fairly varied. Visitors have plenty of options, whether they’re looking for a historic tour of Asheville, North Carolina's Biltmore Estate (the largest privately owned house in the United States) or a day of thrills at Virginia’s Busch Gardens amusement park. Tourists in the South do seem to prefer watery activities, though—the region is popular for dinner cruises and dolphin watching.

Map of the Western region of the United States, listing some of the most popular tourist destinations in the area
Groupon

Perhaps unsurprisingly, the West is easily the most expensive region for visitors, averaging about $176 per attraction. Tourists in this region tend to gravitate toward experiences like helicopter tours and hot air balloon rides, all of which push the region toward the pricey end of the scale. Still, if you’re looking for astounding natural beauty, there are few places with more variety than the American West.

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