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!

What Do the Numbers and Letters on a Boarding Pass Mean?

iStock.com/Laurence Dutton
iStock.com/Laurence Dutton

Picture this: You're about to embark on a vacation or business trip, and you have to fly to reach your destination. You get to the airport, make it through the security checkpoint, and breathe a sigh of relief. What do you do next? After putting your shoes back on, you'll probably look at your boarding pass to double-check your gate number and boarding time. You might scan the information screen for your flight number to see if your plane will arrive on schedule, and at some point before boarding, you'll also probably check your zone and seat numbers.

Aside from these key nuggets of information, the other letters and numbers on your boarding pass might seem like gobbledygook. If you find this layout confusing, you're not the only one. Designer and creative director Tyler Thompson once commented that it was almost as if "someone put on a blindfold, drank a fifth of whiskey, spun around 100 times, got kicked in the face by a mule … and then just started puking numbers and letters onto the boarding pass at random."

Of course, these seemingly secret codes aren't exactly secret, and they aren't random either. So let's break it down, starting with the six-character code you'll see somewhere on your boarding pass. This is your Passenger Name Reference (or PNR for short). On some boarding passes—like the one shown below—it may be referred to as a record locator or reservation code.

A boarding pass
Piergiuliano Chesi, Wikimedia Commons // Public domain

These alphanumeric codes are randomly generated, but they're also unique to your personal travel itinerary. They give airlines access to key information about your contact information and reservation—even your meal preferences. This is why it's ill-advised to post a photo of your boarding pass to social media while waiting at your airport gate. A hacker could theoretically use that PNR to access your account, and from there they could claim your frequent flier miles, change your flight details, or cancel your trip altogether.

You might also see a random standalone letter on your boarding pass. This references your booking class. "A" and "F," for instance, are typically used for first-class seats. The letter "Y" generally stands for economy class, while "Q" is an economy ticket purchased at a discounted rate. If you see a "B" you might be in luck—it means you could be eligible for a seat upgrade.

There might be other letters, too. "S/O," which is short for stopover, means you have a layover that lasts longer than four hours in the U.S. or more than 24 hours in another country. Likewise, "STPC" means "stopover paid by carrier," so you'll likely be put up in a hotel free of charge. Score!

One code you probably don’t want to see is "SSSS," which means your chances of getting stopped by TSA agents for a "Secondary Security Screening Selection" are high. For whatever reason, you've been identified as a higher security risk. This could be because you've booked last-minute or international one-way flights, or perhaps you've traveled to a "high-risk country." It could also be completely random.

Still confused? For a visual of what that all these codes look like on a boarding pass, check out this helpful infographic published by Lifehacker.

Have you got a Big Question you'd like us to answer? If so, send it to bigquestions@mentalfloss.com.

Taco Bell is Opening a Taco-Themed Hotel in Palm Springs This Summer

Taco Bell Corp.
Taco Bell Corp.

For some, having a Taco Bell and its cheese-filled menu within driving distance is enough. For others, only a Taco Bell destination vacation will do. This August, the popular fast food chain is going to convert an existing Palm Springs, California, hotel into a burrito-filled Taco Bell getaway for a limited time.

The Bell Hotel will have all the usual amenities—rooms, food, gifts, and a salon—operating with a taco-themed cosmetic facelift. The nail salon, for example, will feature Taco Bell-inspired nail art. (Though we're not entirely sure what that consists of—possibly nails that resemble hot sauce packets.) The gift shop will feature Taco Bell apparel. Guests can also enjoy the standard variety of Taco Bell menu items. According to Thrillist, some new additions to their line-up are expected to be unveiled.

The as-yet-undisclosed hotel in Palm Springs will be operating as a Taco Bell partner for five nights total. As with pop-up stores and other publicity campaigns, the expectation is that guests will share their bizarre Taco Bell resort experience on social media and create some buzz around the brand. Taco Bell is no stranger to audacious marketing, as in the case of their Taco Bell Cantina in Las Vegas, which books weddings. Recently, the company also began making home deliveries via GrubHub.

The Bell Hotel website is now accepting sign-ups so fans can be notified when reservations open. The facility is expected to open August 9.

[h/t CNBC]

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