Tim Leffel's Cheapest Destinations

Iceland’s Move From Crazy Expensive to Almost Bearable

In my last post I talked about how expensive Iceland was compared to many of the world’s cheapest destinations, but if you’ve always wanted to go there, this would be a good time. The country has gone from being crazy Scandinavia expensive to just plain expensive—in line with much of Continental Europe and cheaper than London or Paris.

As I’ve said a lot on this blog, you have to keep an eye on exchange rates to see how things look now compared to the past. And in that department, Iceland is looking like a sweet deal compared to going there in 2007. Long story short, they had a property bubble very similar to the bubbles in the U.S. and U.K. and the currency became overvalued. Now it has come down to earth and then some, going from 58 kroner to the dollar to around 100 to the dollar. Here’s a chart you don’t see very often when talking about the greenback compared to anything else:

So is the country a screaming bargain now? No, it’s still a relatively wealthy and stable country that belongs to all kinds of European trade pacts, so prices now are pretty much in line with those of Western Europe outside the capitals. Still a bit of sticker shock if you’re coming from anywhere outside of New York City in the U.S., but not “choke on your coffee when you see the dinner bill” expensive like it is in say, Sweden or Denmark.

Hotels are almost reasonable now and flights on Iceland Air are among the best deals out there. A long-running promotion makes it easy for you to stop off in Iceland for a few days or a week on the way to another city in Europe. If you’ve always thought of the country as being out of your reach, take a second look and keep an eye on the historic exchange rates at fxtop.com, where I got the chart above. For the scoop on what to do, see the Iceland Tourism site.

(P.S. – The picture here is from a popular t-shirt for sale throughout Iceland. Yes, it’s a joke.)