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!

10,000 People Gathered at Stonehenge to Welcome the Summer Solstice

Finnbarr Webster, Getty Images
Finnbarr Webster, Getty Images

There are plenty of reasons to welcome the start of summer. Today, people visiting Stonehenge took that celebration to a whole new level.

The BBC reported that an estimated 10,000 people made the pilgrimage to the 5000-year-old site to partake in summer solstice festivities. "Stonehenge was built to align with the Sun, and to Neolithic people, the skies were arguably as important as the surrounding landscape," Susan Greaney, a senior historian at English Heritage, said in a statement. "At solstice we remember the changing daylight hours, but the changing seasons, the cycles of the Moon, and movements of the Sun are likely to have underpinned many practical spiritual aspects of Neolithic life."

These spiritual aspects are just one of the many fascinating facts about the summer solstice; the day is an extremely old calendar event recognized by ancient cultures across the globe. They include the Druids and other pagans, whose tradition of observing the solstice at Stonehenge has long been upheld by modern revelers.

Scientifically speaking, Stonehenge is an optimal viewing place for the solstice due to its structure. According to TIME, the site’s architects appeared to have kept both the summer and winter solstices in mind during its construction, as the positions of the stones are specifically tuned to complement the sky on both occasions.

The solstices were sacred to the pagans, whose modern-day followers continue to honor their rituals. Pagans in particular refer to the day as Litha, and mark it with activities such as meditation, fire rites, and outdoor yoga.

“What you’re celebrating on a mystical level is that you’re looking at light at its strongest," Frank Somers, a member of the Amesbury and Stonehenge Druids, said in 2014. "It represents things like the triumph of the king, the power of light over darkness, and just life—life at its fullest."

Those who were unable to make the journey can head over to the Stonehenge Skyscape project's website, where English Heritage’s interactive live feed fully captured the experience.

Hotels.com Wants to Pay You $10,000 to Test Out Some of America’s Fanciest Hotel Pools

iStock/FTiare
iStock/FTiare

Getting paid to hang out by the pool all summer may sound like a job that's too good to be true. But popular hotel booking site Hotels.com is looking to hire one lucky "Poolhop" to do just that—and pay them $10,000 for their efforts.

According to the official job application, "The Poolhop’s responsibilities are simple; travel to some of the most incredible hotel pools across the country, sip on fruity drinks, snap some photos, sport a hotel robe, and report back to reward-loving Hotels.com fans."

Along with the $10,000 stipend, the Poolhop's perks will include paid airfare and accommodations at six hotels across the country, one year of Hotels.com Gold Rewards member status, and “eternal bragging rights.” The only serious requirements are that applicants be at least 21 years of age and a U.S. resident. They must also, of course, know how to swim.

Thrillist reports that the chosen hotels aren’t your average accommodations, either. The Poolhop will get to dive into luxury at Hawaii's Four Seasons Resort Hualalai, the Mondrian Los Angeles, the SLS Las Vegas, Colorado's Garden of the Gods Club and Resort, The William Vale Hotel in New York City, and Miami Beach's National Hotel.

“No one wants to be sitting at a desk all summer,” Katie Junod, general manager of the Hotels.com brand in North America, said. "There are so many incredible hotel pools to explore across the country, and we want to give travelers a first-hand look at the crème de la crème. And who better to live the hotel life than our very own Hotels.com Poolhop?”

The trip will take place during two weeks in August. All applications must be filled out and submitted by Tuesday, June 25th. And don't forget your sunscreen!

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