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Is Iceland Expensive? (Costs Of Travel)

Is Iceland Expensive? (Costs Of Travel)


Planning a trip to Iceland? One of the first things that may pop into your mind is the question of whether Iceland is expensive. Well, the answer is yes. Iceland is known for being one of the most expensive travel destinations in the world. However, while it may be pricier compared to other destinations, visiting Iceland can still be a worthwhile and unforgettable experience.

With its stunning landscapes, natural wonders such as geysers and waterfalls, and the chance to witness the magical Northern Lights, Iceland has become increasingly popular among travelers. But before you embark on your Icelandic adventure, it’s important to understand the costs you can expect.

From transportation to accommodation, food and drinks, activities, and even shopping, this guide will provide you with a comprehensive overview of the expenses you might encounter during your trip to Iceland. By understanding the costs involved, you can better plan your budget and make the most of your time in this incredible country.

While it’s true that Iceland can be costly, it’s important to remember that the experience and the memories you’ll create are truly priceless. With proper planning and a few money-saving strategies, you can still have a fantastic time in Iceland without breaking the bank.

So, let’s delve into the various aspects of traveling in Iceland and get a clearer picture of the costs that await.


Getting to Iceland

Getting to Iceland is the first step in your journey, and it’s essential to consider the costs associated with transportation. The most common way to reach Iceland is by air, and the major international airport is Keflavík Airport, located about 50 kilometers southwest of Reykjavík, the capital city.

Flight prices to Iceland can vary greatly depending on the time of year, airline, and your point of departure. It’s worth monitoring prices and booking in advance to secure the best deals. Keep in mind that peak travel season in Iceland typically runs from June to August, so prices may be higher during this time.

Another factor to consider is the cost of baggage. Many airlines charge fees for checked bags, so it’s important to check the baggage allowance and fees beforehand to avoid any surprises. Additionally, some budget airlines may have stricter baggage restrictions, so be sure to read the fine print.

Once you’ve arrived at Keflavík Airport, you’ll need to consider the transportation from the airport to your accommodation. The most convenient option is to take a shuttle bus, which operates regularly between the airport and the city center. The journey takes around 45 minutes to an hour, and prices vary depending on the provider.

If you prefer more flexibility and independence, renting a car is a popular option for exploring Iceland. However, it’s important to note that car rental prices in Iceland can be quite high, especially during peak season. It’s advisable to book in advance and compare prices from different rental companies to get the best deal.

Lastly, it’s worth mentioning that if you’re already in Europe, you have the option of taking a ferry to Iceland. The Smyril Line operates a ferry service that connects Seyðisfjörður in Iceland to various ports in Denmark and the Faroe Islands. This can be a scenic and enjoyable way to reach Iceland, although it may take longer compared to flying.

Overall, the cost of transportation to Iceland can vary depending on your location, time of year, and the mode of transportation you choose. It’s important to factor in these costs when planning your trip and allocate a budget accordingly.


Accommodation Costs

Accommodation in Iceland can be one of the major expenses during your trip. The cost of hotels, guesthouses, hostels, or even camping sites can vary depending on the location and time of year.

In Reykjavík, the capital city, you can expect higher accommodation prices compared to other parts of the country. Luxury hotels and high-end guesthouses can cost several hundred dollars per night. Mid-range hotels and guesthouses are more affordable but can still be on the pricier side. If you’re looking for budget options, hostels and guesthouses outside of the city center are more affordable.

Outside of Reykjavík, in smaller towns and rural areas, accommodation prices tend to be relatively lower. Guesthouses, farm stays, and bed and breakfasts are popular options, offering a more authentic and affordable experience. Campsites are also available throughout the country for those who enjoy camping or have a tight budget.

Another option to consider is renting a vacation home or apartment, especially if you’re traveling in a group or staying for a longer period. This can be a cost-effective choice as it allows you to cook your meals and have more space and privacy.

During the peak travel season, which is typically from June to August, it’s essential to book your accommodation well in advance to secure availability and potentially get better deals. Prices tend to rise during this period due to high demand.

It’s important to note that some accommodations in Iceland offer complimentary breakfast, which can help save on dining expenses. Additionally, some guesthouses and vacation homes have kitchen facilities where you can prepare your meals, allowing you to cut down on eating out costs.

If you’re looking to save money on accommodation, consider traveling during the shoulder season (spring or autumn) or even the winter months when prices tend to be lower. You can also look for special deals, discounts, or package offers that include accommodation and other activities.

Overall, accommodation costs in Iceland can range from budget-friendly to luxurious. It’s crucial to consider your preferences, budget, and the location you plan to stay in when determining your accommodation expenses.


Transportation Costs

Getting around Iceland and exploring its breathtaking landscapes requires careful consideration of transportation costs. While Iceland has a well-developed road network, there are a few options to consider depending on your preferences and budget.

If you’re planning to stay within Reykjavík and its immediate surrounding areas, walking is an excellent option. Many attractions and amenities are within walking distance, allowing you to save on transportation costs.

For venturing beyond the city, the most popular mode of transportation is renting a car. Renting a car gives you the freedom and flexibility to explore Iceland’s scenic routes at your own pace. However, it’s important to note that car rental costs in Iceland can be quite expensive, especially during the peak travel season.

When renting a car, there are a few considerations to keep in mind. Firstly, make sure you have a valid driver’s license and are comfortable driving in Iceland’s sometimes challenging weather and road conditions. Secondly, opting for a smaller, fuel-efficient car can help save on gas expenses. Additionally, insurance coverage is usually an extra cost, so be sure to check with your rental company for the best coverage options.

If renting a car is not within your budget or preference, another option is using public transportation. Reykjavík has a reliable bus system that can take you to various parts of the city and beyond. The bus system is affordable and provides a comfortable way to explore, especially if you don’t want to drive.

An increasingly popular transportation option in Iceland is booking day tours or multi-day tours. These guided tours often include transportation to popular attractions and eliminate the stress of navigating on your own. However, keep in mind that these tours can be more expensive compared to driving yourself.

Lastly, if you’re planning to visit more remote areas or venture into the highlands, it’s worth considering a 4×4 vehicle or even hiring a local guide with a specialized vehicle. The highland areas in Iceland require specific vehicles due to the challenging terrain.

Overall, transportation costs in Iceland can vary depending on your mode of transport and the distance you plan to travel. It’s important to factor in these costs when planning your budget and choose the option that best suits your needs and preferences.


Food and Drink Costs

When it comes to food and drink costs in Iceland, it’s important to note that dining out can be quite expensive. However, there are ways to manage your expenses and still enjoy the local cuisine.

In Reykjavík and other major towns, you’ll find a range of dining options, from high-end restaurants to casual cafes and fast-food chains. Fine dining restaurants can be quite pricey, with the cost of a meal per person averaging around $50 or more. Casual restaurants and cafes offer more affordable options, with meals ranging from $15 to $30 per person.

If you’re on a budget, consider exploring the local street food scene. Popular street food choices include Icelandic hot dogs, fish and chips, and traditional pastries like kleinur and pönnukökur. These can be found at various food stalls and local markets throughout the country and are a more affordable way to experience Icelandic flavors.

Another cost-saving option is to take advantage of the grocery stores and supermarkets available in most towns and cities. Buying groceries and cooking your meals can significantly reduce your food expenses. Local products such as dairy, seafood, and lamb are often reasonably priced and allow you to enjoy Iceland’s fresh and delicious ingredients.

When it comes to alcohol, be aware that alcoholic beverages, especially at bars and restaurants, can be quite expensive. In Iceland, the sale of alcohol is regulated, and it can only be purchased at dedicated state-owned liquor stores called Vínbúðin. If you plan on enjoying a few drinks during your trip, it’s advisable to buy alcohol from these stores and have a drink at your accommodation before heading out.

Lastly, tap water in Iceland is safe to drink and of high quality. Refilling your water bottle from taps or using water fountains is a cost-effective way to stay hydrated while exploring the country and reduce the expenses of purchasing bottled water.

Overall, while dining out in Iceland can be expensive, there are options to fit different budgets. By being strategic with your dining choices, exploring street food, and utilizing grocery stores, you can manage your food and drink costs and still enjoy the flavors of Iceland.


Activities and Sightseeing Costs

Iceland is known for its breathtaking natural landscapes and unique activities, but it’s essential to consider the costs associated with these experiences when planning your trip.

One of the most popular activities in Iceland is visiting the natural wonders, such as waterfalls, geysers, and national parks. Many of these attractions are free to visit, allowing you to explore and admire the beauty of Iceland without incurring any expenses. However, some attractions may require an entrance fee, especially if they are privately owned or offer additional facilities.

If you’re interested in exploring the natural wonders further, you can also consider booking guided tours or activities. These tours can range from glacier hiking to horseback riding, ice cave exploration, or even snorkeling in the Silfra fissure. The prices for these activities vary depending on the duration, level of difficulty, and equipment provided. It’s advisable to compare prices from different tour operators and read reviews to ensure you’re getting the best value for your money.

Another popular experience in Iceland is chasing the Northern Lights. Witnessing the dancing lights in the sky is an unforgettable experience, but keep in mind that seeing the Northern Lights is dependent on various factors, including weather conditions and solar activity. If you choose to join a guided Northern Lights tour, the prices can range from $60 to $100 per person.

For those interested in cultural experiences, museums and cultural sites are worth considering. The National Museum of Iceland, the Icelandic Phallological Museum, and the Settlement Exhibition are just a few examples of the fascinating museums you can visit in Reykjavík. Entrance fees for these museums typically range from $10 to $20 per person.

Lastly, if you’re looking for relaxation and rejuvenation, Iceland is famous for its geothermal pools and spas. The Blue Lagoon, located near Keflavík Airport, is a renowned geothermal spa that offers various packages and experiences. The prices for spa entry and treatments can vary, but expect to spend around $60 to $100 per person.

Overall, the costs of activities and sightseeing in Iceland can vary greatly depending on your preferences and the experiences you choose. It’s advisable to plan ahead, research the options available, and allocate a budget for these activities to make the most of your time in this incredible country.


Shopping Costs

While Iceland is known for its stunning landscapes and unique experiences, it’s also a great place for shopping, especially if you’re interested in bringing back some Icelandic souvenirs or locally-made products.

Reykjavík, the capital city, offers a wide range of shops and boutiques where you can find everything from Icelandic wool sweaters and outdoor gear to artwork and traditional crafts. It’s worth noting that shopping in Reykjavík can be on the expensive side, especially in touristy areas. However, you can still find reasonably priced souvenirs and locally-made items if you venture into smaller, independent shops.

Outside of Reykjavík, you’ll find various small towns with their unique shops and boutiques. These places often offer a more authentic shopping experience and might have locally crafted products that you won’t find elsewhere. Additionally, smaller towns can sometimes have lower prices compared to Reykjavík.

Icelandic wool products are a popular item to bring back as a souvenir. From cozy sweaters and hats to blankets and mittens, the high-quality Icelandic wool is known for its warmth and durability. While these products can be a bit expensive, they make for a worthwhile investment due to their longevity.

Another unique Icelandic product is skincare made from natural ingredients found in Iceland, such as volcanic ash and mineral-rich seaweed. These products are known for their nourishing and healing properties and are available in various shops and pharmacies throughout the country.

If you’re a book lover, Iceland has a strong literary tradition, and you can find a wide selection of Icelandic literature, both in Icelandic and English translations, in bookstores across the country. This is a great opportunity to discover Icelandic authors and immerse yourself in the local literary scene.

It’s important to keep in mind that Iceland has a Value Added Tax (VAT) that applies to most goods and services. However, as a visitor, you may be eligible for a VAT refund on certain purchases. Be sure to inquire about the process and requirements when making larger purchases.

Overall, shopping in Iceland can be a delightful experience, allowing you to bring back unique and locally-crafted souvenirs. While some items may come with a higher price tag, you can still find reasonably priced products and support local businesses, making your shopping experience memorable.


Money-Saving Tips

While Iceland can be an expensive travel destination, there are several money-saving tips you can employ to make your trip more budget-friendly without compromising on the experience.

1. Travel during the shoulder season: Consider visiting Iceland during the spring or autumn months when prices for accommodation and flights tend to be lower compared to the peak summer season.

2. Book in advance: Whether it’s flights, accommodation, or guided tours, booking in advance can often lead to better deals and availability, saving you money in the long run.

3. Opt for budget accommodation: Look for guesthouses, hostels, or even camping sites instead of high-end hotels. Also, consider staying outside of Reykjavík for more affordable options.

4. Prepare your meals: Take advantage of grocery stores and cook your meals instead of dining out for every meal. This can significantly reduce your food expenses.

5. Explore free attractions: Iceland has numerous natural wonders that you can visit for free. Enjoy scenic hikes, waterfalls, and geothermal areas without incurring any entrance fees.

6. Use public transportation: Instead of renting a car, consider using buses or joining organized day tours to explore the country. Public transportation is more affordable and can save you money on gas and rental fees.

7. Bring reusable water bottles and snacks: Fill up your water bottles from the tap, as Iceland has clean and safe drinking water. Additionally, pack some snacks for your outings to avoid impulse purchases.

8. Take advantage of free activities: Attend free cultural events, explore local markets, and visit museums on days when they offer free admission or discounted tickets.

9. Book multi-activity packages: Look for package deals that include multiple activities or attractions. These packages often offer discounts compared to booking each activity separately.

10. Research affordable options: Before making any bookings, spend time researching different providers and comparing prices. Look for discounts, promo codes, or special offers to help reduce your overall expenses.

By implementing these money-saving tips, you can make your trip to Iceland more affordable while still enjoying the incredible landscapes, unique experiences, and rich culture the country has to offer.



In conclusion, while Iceland is known for being an expensive travel destination, with proper planning and budgeting, you can still have a memorable and enjoyable trip without breaking the bank. By considering the costs of transportation, accommodation, food, activities, and shopping, you can better allocate your budget and make informed decisions.

Remember that Iceland’s natural wonders, such as waterfalls, geysers, and breathtaking landscapes, are often free to visit, allowing you to experience the country’s beauty without incurring additional expenses. Additionally, taking advantage of affordable accommodation options, cooking some of your meals, and exploring free or low-cost activities can help save money during your stay.

Be strategic with your spending, plan ahead, and consider visiting during the shoulder season when prices are typically lower. Booking in advance and researching discounts and package deals can also result in significant savings.

While it’s true that Iceland can be pricey, it’s important to remember that the experiences, natural wonders, and unique cultural attractions the country has to offer are truly priceless. Despite the costs, a trip to Iceland is an investment in unforgettable memories and extraordinary adventures.

So, embrace the beauty of Iceland, immerse yourself in the culture, and explore the stunning landscapes while being mindful of your budget. With careful planning and these money-saving tips, you can make the most of your trip to Iceland and create memories that will last a lifetime.


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