Yes, Iceland is extreme. Tourists know that. Iceland is so expensive that it’s almost impossible to keep yourself updated with your bank account situation. I personally came home broke from Iceland. Do I regret it?
Not a cent.
Or maybe a bit though. But in this country no matter what you do, eat or drink, you will come home broke. There’s no way around it. To make this work, you will have to force yourself to find budget solutions wherever possible.
So how expensive is Iceland actually?
The costs of living of all countries within the EU are lower than in Iceland. This being the main reason for putting me OFF from visiting Iceland for many, many years.
While I was in Iceland, I spent an average of 200 USD/day. I could have done it for less but more than a half of my budget consisted in booking winter bus tours around the country – will come on that later.
Excepting these tours, I spent around 50 USD per day – most of this part of money went to food and accommodation. Here’s a breakdown of my expenses per day (rounded to the nearest whole dollar & euro)
- Food: 20 USD (18.2 EUR)
- Accommodations: $30-35 USD Hostel dorm (32 EUR)
- Alcohol: $0 USD – Jackpoint !!
- Transportation: around $150 USD per day (137 EUR)
- Car rental: $100/day – used it once (91.4 EUR)
- Other activities: 10$-20$ USD (9-18 EUR)
*these are winter prices. In summer they might go up to 30% – or more.
So now, why does things cost so much in Iceland.
Labour, labour, labour.
Wages are high in Iceland. Few years ago OECD named Iceland as the country with the most expensive labour in the world. Besides, Icelandic labour has a lot of mandatory benefits, like 12% union dues, a 37-46% income tax, and parental leave on nearly full pay, plus many other economical stuff that I barely understand.
Everything is imported. Except the air.
Only 5.8% of industry in Iceland is agricultural – that means importing food – which cost money.
Not only food but almost everything has to be imported, which is part of the problem. Not that it makes a difference, but Iceland is just as expensive for Icelanders.
Also, prices varies on where you go and what you eat. If you’re at a restaurant in Reykjavík centre, it’s going to be expensive for all the reasons above, plus the fact that they have to pay real estate prices for downtown Reykjavík. If you’re in a tourist trap out in the country, you’re a captive customer. Prices will be high because they know people will pay them. #onceinthelife
This is really a thing in Iceland. Road system (1,400km Ring road with well-maintained roads – even in winter), Air connections, Communications technology, Ports, Tunnels, and so on. Plus, I understood that the infrastructure and the workforce are struggling to deal with the sheer number of people, so they need to construct more and more and maintain the existing one.
For example, Iceland is expecting 2.3 million tourists in 2017. That’s a lot!
Taxes and Icelandic króna (you’re gonna love the currency).
A strengthening national currency and rising prices mean that Iceland has by now probably toppled Switzerland from the top spot of richest countries in the world, figures suggest.
Booze is taxed about a million percent in Iceland. You drink, you starve.
According to data submitted by users, the cost of living in Iceland is 50% higher than in United States (rent not included), while rent is on average 12% higher.
It might worth a try…
Iceland has never been a budget destination. But since a few years already, Iceland is becoming a Disneyland and as the Telegraphs says, this tiny island is planning to become even more expensive to prevent overcrowding. Having said that, for someone like me (an outdoor enthusiast) the natural beauty in Iceland is well worth the money. It is incredible and awesome.
Life is short. If you are a natural enthusiast, you should not miss Iceland. No matter how much they ask you to pay for.