Why is it so expensive to visit cool Iceland?

There are many of these outdoor geothermal bathing pools in Iceland. Photos: AFP

The hot springs of Iceland are not the only thing making tourists sweat, as a look at the hotel or lunch bill will tell you that most things cost more, sometimes much more, than anywhere else in Europe.

On the subarctic island, consumer prices were on average 56% higher than the rest of Europe in 2018, making Iceland the single most expensive country, ahead of Switzerland (52%), Norway (48%) and Denmark (38%), according to Eurostat data.