Strolling through Reykjavik's bustling tourist shops, visitors are met with a candid souvenir: a small black T-shirt bearing the slogan, 'Iceland. Not just cold. But also expensive.' This tongue-in-cheek admission sets the tone for a travel destination grappling with its own popularity and price tag.
The AI That Agrees: Iceland's High Cost of Living
Curious travellers can pose the question of cost directly to Ísòl, the official AI concierge agent for Visit Iceland. Even she confirms the high expense, citing geographic isolation, limited resources, high wages, taxes, regulations, and soaring tourism demand as key drivers. 'The popularity of Iceland as a travel destination has led to higher prices,' Ísòl states, with a tone that almost sounds apologetic.
A recent three-day classic tour, taking in Reykjavik and the Golden Circle area around Reykholt, confirmed the reality: it was cold, rainy, and costly. A single restaurant meal, where the diner couldn't read the menu, came to €137 (roughly £120) for two main courses and a glass of wine each – a standard figure that left other visitors openly lamenting the state of their wallets.
A Deliberate Deterrent or Managing the Boom?
Some speculate that the self-deprecating merchandise and an AI that recommends cheaper alternatives like Poland, Hungary, Mexico, Portugal, and Greece might be a subtle ploy to manage tourist numbers. Prime Minister Kristrún Frostadóttir has suggested the need to 'tone it down a bit.' This comes after a tourism explosion, fuelled partly by the Game of Thrones phenomenon, which saw visitor numbers rocket from around 500,000 in 2010 to 2.3 million in 2018.
Despite talk of a bursting bubble, Iceland is expected to return to pre-pandemic visitor levels this year. Officials say they can 'comfortably' manage 2.5 million tourists but are actively encouraging travellers to explore beyond the packed Golden Circle to less-visited regions like the Westfjords.
The Unquantifiable Allure of the Land of Fire and Ice
The core dilemma is Iceland's unique and powerful appeal. From geysers and volcanoes to world-class attractions like the Perlan Museum, its landscape is 'weird and wonderful beyond words.' As poet William Morris noted on a visit in 1871 – while complaining about litter – it is the definitive 'land of fire and ice,' a phrase that has lured travellers for generations.
While a two-night stay in a luxury Reykholt Airbnb cost €515 (£450), and entry to the Blue Lagoon is €70 (£61), the value of the experience is hard to quantify. For locals, it means living on 'an island of strangers' with little respite, but for the world, Iceland remains a uniquely captivating, if undeniably pricey, destination.
