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!

Why Are Shower Doors in Hotel Rooms Getting Smaller?

sl-f/iStock via Getty Images
sl-f/iStock via Getty Images

Shower doors are shrinking in posh hotels, and minimalism is to blame, Condé Nast Traveler reports.

In lieu of hanging shower curtains or providing full shower doors, many newer hotels are opting for glass panels that cover only half the length of the shower. That’s frustrating for many travelers, who complain the growing trend is inconvenient and leaves bathroom floors sopping wet and slippery after shower use.

According to Condé Nast Traveler, the half-door trend began in European hotels in the 1980s. “A lot of it comes down to people trying to design hotel rooms with limited space,” boutique hotel designer Tom Parker told the magazine. “It’s about the swing of the shower door, because it has to open outward for safety reasons, like [if] someone falls in the shower. You have to figure out where the door swing’s going to go, make sure it’s not [hitting] the main door. It’s just about clearances.” A smaller door also has the added benefit of making the space appear larger than it really is, according to the magazine.

The trend is also connected to the birth of minimalist “lifestyle hotels,” which cater to a younger, hipper clientele that gravitates toward sleek lines and modern design. Plus, half-size glass doors are easier to clean than shower curtains, which tend to trap bacteria and need to regularly be replaced, which can add up to significant additional costs for a hotel.

Theoretically, even half-door showers are designed to minimize water spillage. Designers try to level the floors in bathrooms so water doesn’t pool in random areas, and they place shower heads and knobs in areas that are more protected by glass paneling. And where design doesn’t work, hotels try to pick up the slack.

“Hotels tend to mitigate the risks by offering non-slip interior shower mats, cloth bath mats for stepping out of the shower, grab bars, [and] open showers or no-sill showers which avoid having to step up and over the ledge,” designer Douglas DeBoer, founder and CEO of Rebel Design Group, told Condé Nast Traveler.

But the half-door trend still has yet to gain much love from hotel guests. “The older generation much, much prefers having a shower door,” Parker told Condé Nast Traveler. “I’m like a 70-year-old man at heart anyway. I like [a shower door] if it’s in keeping with the style of the rest of the room.”

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Miami’s Dixie Highway Will Become Harriet Tubman Highway

A stretch of Old Dixie Highway in Homestead, Florida.
A stretch of Old Dixie Highway in Homestead, Florida.
Joe Raedle/Getty Images

Earlier this week, commissioners in Florida’s Miami-Dade County unanimously voted to rename parts of the Dixie Highway after Harriet Tubman.

CNN reports that Modesto Abety, former CEO of the county’s Children’s Trust, had written a letter explaining how his granddaughter had asked him why "Dixie"—a word referring to the Confederate states, south of the Mason-Dixon line—was still featured prominently on highway signage. She suggested it might be more fitting to rename the roads after Harriet Tubman, instead. Inspired by the letter, Commissioner Dennis Moss began the process of doing just that.

“[Harriet Tubman] was the antithesis of slavery,” Moss told CNN. “I thought that suggestion was a good suggestion.”

According to the Miami Herald, the update will only apply to the parts of the highway that run through Miami-Dade County—Old Dixie Highway in South Dade and West Dixie Highway in Northeast Dade—but commissioners are encouraging the rest of Florida to follow suit.

Even if that happens, there will still be quite a (literal) long way to go before we see “Harriet Tubman Highway” on the entire Dixie Highway: The roadway spans a total of 5786 miles across 10 states, all the way from Florida to Michigan.

That said, the lack of major opposition to the name alteration in Miami-Dade County bodes well for the future of Tubman-christened roads everywhere. Some locals did voice concerns about the cost of changing signs and business addresses, but the commissioners felt the importance of eliminating a term so closely associated with slavery would outweigh those costs.

“The time is always right to do what is right,” Moss told CNN, quoting the sermon Martin Luther King Jr. gave at the National Cathedral just four days before his assassination in 1968.

[h/t CNN]

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