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why is sweden so expensive?

Why is Sweden So Expensive? Find All The Reasons Here

Sweden, with its thousands of remote islands, inland lakes, Arctic forests, and fashionable coastal cities, is a lusted vacation destination that lives rent-free on every traveler’s bucket list. However, that’s about the only thing going cheap in Sweden. The Nordic countries seem to have perfected their way of living with healthy work-life balances and cooperative populations, but just why is Scandinavia so costly?

Sweden is one of the most expensive countries in Europe. Although cheaper than nearby Finland, Denmark, and Norway, the high costs for food, accommodation, and travel, could come as surprise to any visitor coming from elsewhere in the world. 

This guide asks, why is Sweden so expensive, and how local residents uphold such high standards of living with the steep prices for goods and services. From the location to the taxes, it’s all here. Let’s get started. 

Why is Sweden so expensive?

Swedish currency
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Northern Europe, specifically the subregion of Scandinavia, is somewhere most of us have all dreamed of visiting. The Nordic Countries might be diverse in landscapes, with everything from sun-soaked islands and coastal cities to Northern Light retreats, glacial mountains, and Lapland adventures, but the constituent peoples across Scandinavia are actually closely tied in history, culture, language, and beliefs. 

One of the first things people ask about Norway, Denmark, and Sweden, after “why are they so expensive” is, “how are the people so happy?”. In fact, both questions prompt similar answers. It’s well-known that Scandinavia is home to some of the world’s happiest people, and along with their shared life philosophies that focus on balance, connection, and logical approaches to conflict, the high average GDPs per capita definitely have something to do with it. 

Sweden is the world’s 16th wealthiest country, with the second highest total tax revenue, after Denmark, as a share of the country’s income and an average GDP per capita of over $60,000. Sweden has its open and liberal approach to trade and business partly to thank for its strong economy. It’s traditionally an export-oriented country and has managed to maintain a trade surplus, meaning the value of exported goods and services is higher than the value of imports. 

Sweden functions under a mixed economic system of high-tech capital, with plenty of private freedom as well as government regulation. There might be notoriously high taxes in place, but this keeps the welfare state, and its extensive benefits, well-oiled, meaning the country’s wealth pays off for residents.    

Why is Sweden so expensive to get to?

northern lights
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Despite all this talk of high GDPs and taxes, the cost of getting to Sweden has little to do with the economic situation of the country. In fact, if you’re coming from anywhere in Northern Europe, and even Central or Eastern Europe, chances are, it won’t cost any more to get to Sweden than your Mediterranean summer destinations. 

However, Sweden is located in the far northeast of the continent, which can mean longer flying hours, more transport changes, and limited choices from full-service and luxury Scandinavian airlines, which can all mean higher travel tariffs. Even though it’s Sweden’s most expensive destination by a long shot, the capital Stockholm is one of the easiest and cheapest places to get to thanks to its southeastern location and great connections to the rest of Europe. Getting to Sweden’s remote regions, on the other hand, could set you back.

Home to ice hotels, the King’s trail, the Northern Lights, and the midnight sun, Swedish Lapland is an arctic territory at the northernmost tip of the country and among Europe’s last remaining wilderness areas. It might be remote, but Lapland is an ever-the-luxurious travel destination, offering the ultimate winter wonderland escape among its pristine frozen landscapes. 

The high cost of reaching the best place in Sweden to see the Aurora Borealis phenomenon comes as a result of both its luxury appeal and outlying location. There are a number of airports up here, but with some smaller than others, so you’ll have a limited choice of airlines, non-negotiable onward travel fees, and you’ll also likely have to stop over in Stockholm first anyway.  

You also can’t go wandering into the Swedish wilderness without direction, so expensive organized trips where your travel, pick-ups, accommodation, and itineraries are all handled for you by a travel agent, are usually the only way to go. Compared to the cost-cutting you can do on a spontaneous European city break you’ve planned yourself, budget travel up here just isn’t an option.  

Long distances might be cheaper to travel in Sweden than what residents of the UK and US might be used to. However, a recent Eurostat study found that Sweden reports the highest transport service prices among EU member states which can make it costly to get around if you’re not used to such fees.         

Why is Sweden so expensive for food and drink?

Swedish groceries
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Unlike the travel situation, the high cost of food and drink in Sweden is a true reflection of the country’s economy. Sweden is one of the most expensive countries in the EU for food and non-alcoholic drinks, and this is down to a number of factors.

The sales tax in Sweden is higher than it is in a number of European countries. A standard VAT rate of 25 percent, with a reduced rate of 12 percent, is applied to all restaurant bills, grocery food, and catering services, and you’ll notice this everywhere when you get your card out to pay. 

A lot of Europe’s food is also grown in the sunny fields in the south of the continent and transported up north in trains and trucks. Things get a bit more complicated, and less efficient when these transported goods have to cross water. There might be the Öresund Bridge connecting Stockholm to Denmark, but it’s still a long drive from the Med, and sometimes there are ferries to be taken. Either way, someone’s paying the tolls, and it’s not the truck drivers. 

Around 60 percent of processed food comes from raw agricultural materials in the Swedish food industry too. Therefore, your grocery bill could take a bigger chunk out of your weekly budget if a bad summer affects farmers’ yields. There’s always the risk that supply won’t meet customer demand when companies have to hold back on domestic products. Supermarkets and consumers might have to turn to costly imported goods as a result.   

Still, this isn’t to say domestic goods are cheap. Swedes are well-paid thanks to greater taxes and their high standards of living. These generous salaries produce higher food prices overall. 

Why is Sweden so expensive for accommodation?

swedish hotel
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Unless you’re off on a backpacking jaunt in Southeast Asia, accommodation tends to be one of the most expensive parts of any trip. The accommodation comes in all shapes and sizes in Sweden, but it often doesn’t come cheap, and this is down to both the employee regulations (and that good-old high quality of living), as well as the general sought-after popularity of certain travel destinations. 

Sweden has a larger than average public sector workforce, but employment rules are very similar for the public and private employment sectors. Some of these strict labor laws make it expensive for companies to employ people, partly because of high taxes, and this means your hotel bill could be higher to cover worker salaries.

The hotel market in Sweden is mature. There’s an ever-increasing demand for hotels to accommodate the steadily growing number of international and domestic tourists. Increasing interest in travel across all age groups as well as generous disposable incomes keep driving domestic tourism in Sweden, meaning international tourists also have to keep up with rising costs that come in tow.    

In other words, hotels have plenty of room to thrive in Sweden and continue to expand with the rest of the tourism industry in Scandinavia. Swedish escapes are often synonymous with style and luxury and you’ll find that 51 percent of hotels are upper or upper-midscale establishments. This means you might be slightly limited in budget-friendly options despite all the variety that comes with increased competition. 

Although hotels are the most popular choice of accommodation for travelers to Sweden, accounting for almost 80 percent of all overnight stays in the country, the high rent prices and cost of living mean vacation rentals aren’t any cheaper. 

Why is Sweden so expensive in the summer?

why is Sweden expensive
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Sweden is already a costly vacation destination, but as things heat up, it gets even more expensive. The Scandinavian country experiences long, cold winters, especially in the northernmost sub-Arctic regions, and mild but comfortable summers thanks to the Gulf Stream and its proximity to the North Atlantic. This means summer is a more appealing time to visit. 

Winters are severe in much of the country, making this a difficult time to navigate the country. Limited daylight hours can put off visitors, and rainy days in the capital make it less appealing. Festive fun kicks off in November and costs can see an increase everywhere from Stockholm to Lapland with Christmas activities on the agenda. Still, Sweden is generally most expensive in the summer, when the rolling landscapes and coastal cities are easiest to explore. The north is also not off limits, with the midnight sun phenomenon drawing a steady flow of tourists. 

More people means less variety, with the best deals being snapped up early. Hotels and restaurants can also raise their prices with high season demand, while they’re more likely to offer discounts in the shoulder seasons when business is slow.  

As evident from this year’s trends, everything in Sweden also seems to get more expensive every May, with the painful effects of inflation. The price of food and drink saw a two percent overall increase from April to May 2022, and the price to stay in a hotel or dine at a restaurant rose by an average of 1.7 percent in the same period. 

This could be down to seasonal trends, but according to statistics, things seem to have risen every May since 1997 in Sweden, including the cost of recreational and cultural activities. As such, if you want to bag the cheapest prices that year, you might want to visit before the Easter break.  

How much does a holiday to Sweden cost?

Sweden remains one of the most expensive countries in Europe for a holiday, and this shows no signs of changing any time soon. How much your holiday actually costs you is dictated by your spending habits, but some things will never come cheap. The average price of seven day trip to Sweden for a solo traveler is around $1,150, while a couple is expected to spend $1,780, and $2,326 for a family of four. 

Hotels range between $70 and $250 a night, averaging at around $90, while vacation rentals range between $60 and $350 for an entire home with an average of $125 a night. Worldwide travel costs vary greatly depending on where you’re coming from, but Sweden, and many of its islands and northern cities, are considered remote and can cost upwards of $800 to reach from outside of Europe. 

Is it expensive to get around Sweden?

Although Sweden has some of the highest transport service prices among EU member states, the price of getting around could surprise you if you’re from the UK or US. Taxis and subway passes in Stockholm don’t come cheap, but a cross-country train can take you to the far-flung corners of the country, for half the price it takes to get from London to Manchester. Swedish transport is also notoriously efficient with high standards of comfort, making the prices seem even more reasonable. Better yet, some transport in cities like Ockelbo and Gothenburg are completely fair-free for students, the elderly, and other specified groups. 

When is the cheapest time to visit Sweden?

Sweden experiences its best weather between May and September but paired with the influx of summer holiday tourists, this can be the most expensive time to visit. Sweden and its winter wonderlands are also popular around the festive period, so for the best off-season discounts on hotels and food, consider visiting between February and April. The weather can be pleasant in the south but still snowy in the north, which is ideal if you’re after a winter experience. Plus, flights to Sweden tend to be the cheapest at this time. 

Where is the cheapest place in Sweden?

Sweden isn’t known for its budget-friendly destinations, and unfortunately, cities like Gothenburg, Uppsala, and of course, Stockholm, which steals the top spot as the most popular destinations in the country, are not the cheapest. Still, there are places you can visit on a budget, like the beaches and forests of Gotland, the culture-rich Umeå, or the historical coastal city of Helsingborg.