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We were in Tromso at the end of the last year/beginning of this year (NYE fireworks there were spectacular btw). You can see aurora within the town itself, but it is definitely better to go out of town.
It is very much a tourist town though and of course is super expensive all round. It's location though makes it easier to do aurora chases into Finland if needed - which I've heard that the chasing companies will do if the weather is bad in Tromso - often it's the reverse inland. We hired a car and did our own thing, seeing the aurora twice while we were there.
I think no matter where you go that can get aurora, it will be the weather conditions that will play the biggest impact on seeing them - you need to give yourself a number of days to maximise your chances overall.
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