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Is Iceland expensive? Your guide to budgeting your trip
Like many other Nordic and Scandinavian countries, Iceland has a reputation as a costly vacation destination. Maybe you’re in two minds about traveling to Iceland for this reason? To dispel any myths and fake news, in this article we’re answering the big question: Is Iceland expensive?
The quick answer is yes…no…maybe?
It depends who you talk to and what you’re used to.
It’ll also depend on how you plan your vacation, who you book with and, well, what you think of as expensive! Maybe a holiday staying in hotels is something you think is too pricey? Or you prefer public transportation, to save money and to feel more like a local?
Read on and you’ll find out:
- How much is a trip to Iceland on average
- 10 amazing cost-saving tips
- How to get the best out of your budget
How much is a trip to Iceland?
Let’s start with overall numbers and then break it down.
The average cost of a tour in Iceland is 23,000 ISK per person, per day. Thousands of anything might sound like a lot, but this is in Icelandic Krona, the local currency of Iceland. When exchanged it is the equivalent of around 150 Euros (EUR), 183 United States Dollars (USD), or 135 Pound Sterling (GBP)*.
This includes accommodation, transport, activities, and food. The way you plan and book all of these can make it more or less expensive. We’ll give you tips on how to travel to Iceland on a budget in the next section.
*[All calculations in this article are provided in good faith but exchange rates change daily. For the latest rates, check out this currency converter.]
Breakdown of costs
Food: If you’re eating out, the average amount for one person per day is 4,000 ISK (26 EUR, 32 USD, 24 GBP). This is at the lower end of the average and can easily climb if you go out to nice restaurants.
That brings us to our next point, which we have not added to our total cost…
Alcoholic beverages: People often say that it is expensive to drink out in Iceland and it will definitely be pricier than in many other places. The average cost of a draft beer in a bar in Reykjavík is around 1,200 ISK (8 EUR, 10 USD, 7 GBP).
You will be able to find cheaper places and drinks, but if you’re on a budget you may want to skip going out drinking or treat yourself occasionally. Other tips include buying some bottles at the Duty Free on arrival at Keflavík Airport and checking out happy hour deals.
Good to know: Tipping isn’t a big deal in Iceland. You can leave some change, but tipping is not expected. And don’t bother trying to add up the tax as it’s already included in the price!
Accommodation: Based on two people sharing one basic hotel room, the average price is around 20,000 ISK (130 EUR, 159 USD, 118 GBP) per night. This amount can be brought down if you go camping or stay in hostels.
Activities: The cost of the average traveler will be around 5000 ISK per day (33 EUR / 40 USD / 29 GBP). This includes museums, day trips, and other fun stuff you can fill your days with.
It can again climb up fast if you want to go on unique experiences, such as snorkelling between continents, spa retreats, and guided tours inside glaciers.
Local tip: It is easy to use credit cards in Iceland, especially in Reykjavík. In fact, if you don’t have extra charges while abroad, you may find it is an efficient way to pay for activities, restaurants and more during your trip.
Transportation: The best way to see more of the country is to rent a car. You could easily take day trips to the famous Golden Circle or to the south coast, or drive along the entire Ring Road.
Public transportation isn’t impossible but not easy to do to get around, especially if you don’t have an unlimited amount of time. Renting a car will allow you the freedom to pull the car over at any attraction or breathtaking view as well!
The average transport cost is around 8,000 ISK per day (52 EUR, 62 USD, 47 GBP).
- Browse our self-drive tours in Iceland for the road trip of a lifetime
Another transport cost you have to take into consideration is the shuttle bus from Keflavík Airport into Reykjavík.
You may pick up your rental car from the airport, or your tour company may include a private transfer as part of your package. But, generally speaking, the cheapest and most efficient way to reach the capital is with the Flybus. Prices start around 6,700 ISK (44 EUR, 53 USD, £40) for a return ticket.
For a taxi fare, the average cost is around 13,500 ISK (88 EUR, 107 USD, 80 GBP) for one way.
Total: That brings us to a grand total average cost of around 322,000 ISK (2099 EUR, 2559 USD, 1896 GBP) for a 7-day trip shared by two people. Or 189,000 ISK (1232 EUR, 1500 USD, 1111 GBP) for a single traveller.
How to see Iceland on a budget?
The more you’re reading through this article, the more we hope you understand that a vacation in Iceland doesn’t have to be expensive. And yes, it is possible to visit Iceland on a budget.
Here are our 10 tips to lower your average expenses and visit the Land of Fire and Ice at a lower cost:
1. Look out for airline deals
You’ll notice we didn’t include anything about airfares in our total above. This is because it will vary wildly depending on how far you’re coming from, Australia versus the United States for example.
You can often get a better deal by looking at airlines that serve your local airport hub. Or if you are part of a rewards program or have airmiles to spend.
2. Try camping
Camping is a very popular way to spend your nights in Iceland on a budget as the cost is lower than that of hotels. Make sure to come between June and August to enjoy this way of seeing Iceland.
Good to know: Iceland Tours includes camping gear for the duration of your stay if you book a camping holiday with us. An added bonus is that it allows you to keep your baggage light.
Camp sites fees are usually between 1500 and 3500 ISK (9-23 EUR, 12-28 USD, 9-20 GBP). This alone could bring down your week-long tour of Iceland to 206,500 ISK (1357 EUR / 1652 USD / 1228 GBP) for 2 people.
- Look up our camping tours in Iceland
3. Book early
Another way to save money is by booking in advance. This goes for your car rental, activities, and overnight stays.
Accommodation in Iceland can book out really early for the high season, which is between June and August. To have the best choices within your price range, make sure to book 6 months to a year in advance. Some companies offer early booking discounts too. Be on the lookout for these!
By booking in advance, you don’t have to break the bank early. At Iceland Tours you can reserve your preferred tour and date with only 20% deposit. This way you have longer to save and get excited about your upcoming travels!
4. Travel to Iceland in winter
You’ll find that accommodation is generally cheaper during this time of year. You may think it’s too cold, but there are so many advantages to visiting in winter. Think of the beautiful snowy mountaintops, glittering waterfalls, and the famous Northern Lights.
By comparing two of our 7-day tours, between winter and summer, you’ll find that you could save around 300 Euros (365 USD, 271 GBP).
5. Find free hot springs
Were you looking at the Blue Lagoon Spa, but it is too expensive for your budget? The way to do this one cheaper is by going to wild hot springs in the countryside. Perfect if you’re on a self-drive tour and you can stop whenever you want.
Not only will this allow you to adventure yourself off the beaten path, but it’ll make for great photo opportunity. This way you can show off to all your friends back home on social media!
Another suggestion is to join the locals at the Reykjavík city pools. They are heated and open year long. Families will especially like these as there are often slides and shallow pools available.
6. Bring a water bottle
The water in Iceland is some of the best in the world! Yes, it’s definitely worth boasting about! As it is safe to drink water from the tap, bring a reusable bottle to refill every day. A bonus benefit is that it’s eco-friendlier than purchasing plastic bottles during your trip.
Local tip: Run the water for a few seconds to remove any sulfur smell (especially in warm water). It is totally natural because of the geothermal origins of this water.
7. Book a tour or accommodation that includes a meal
At Iceland Tours we include continental breakfast with your hotel accommodations. That saves you some money and allows you to be well fed before setting off on your day’s activities.
8. Go hiking
Visit Iceland between June and September and you could spend your time hiking in the wilderness. Take in all the amazing sights, viewpoints, and natural wonders. And it’s free!
9. Look up free tours
If you have a free day in Reykjavík or other larger towns in Iceland, you may want to check out if there are free walking tours offered at that time.
You usually are expected to tip at the end of free tours.
10. Try the street food
You don’t have to eat out to treat yourself. You could get a pastry to go or even a famous Icelandic hot dog. These are usually cheaper than sit-down meals.
Bonus reminder
Please book travel insurance. We know that it’s an additional expense and, if all goes well, it will be a “lost cost”. But if something doesn’t go right, it could save you money, protect your trip and your health.
Don’t forget to treat yourself
While visiting Iceland, especially with all our useful tips, it should be easy for you to cut costs and travel on a budget.
Whatever you do, though, make sure to include some unique experiences to your itinerary. Or at least one amazing thing, whether that’s going puffin or whale watching, tasting the local cuisine, or walking on a glacier.
You won’t regret it and it may make your time in Iceland even more memorable! It’s the trip of a lifetime, so treat yourself!
- Check out all the amazing activities you could add to your itinerary
How to book a budget trip in Iceland?
The easiest and most efficient way to book a budget trip to Iceland is through local companies that include it all.
On Iceland Tours’ website it is simple. You can pick your starting date, length of travel and then go through every detail to see how much it costs. You can pick your car rental type and accommodation preferences depending on your budget.
And when you compare your budget to our prices and realise you’ve saved money, you’ll get to feel smug about it!
You’ve made it to the end! It means you’re now ready to plan a budget for a trip to Iceland. And you can now answer the big question yourself: Is Iceland expensive? It doesn’t have to be!
Make sure to browse our website when you’re ready to book or get in touch. One of our agents will answer all your queries and help you tailor a tour to fit your budget and preferences.
When to visit Iceland: Your guide to the best times to go
You can’t go wrong when choosing a trip to “The Land of Fire and Ice”. Iceland is a great year-round destination! Whether you’re visiting during the snowy months or at the height of summer with its never-ending days, you can experience Iceland’s stunning beauty.
If you’re wondering when to visit Iceland, it’s all broken down for you here. We explain each season’s benefits as well as when to go to Iceland for specific pursuits. Only you can decide which matches you best!
Visit Iceland in summer – June to August
The summer months have the best weather of the year. Expect less precipitation, much higher number of daylight hours, and the warmest temperatures. Generally, Iceland experiences highs of 15°C (59°F) and lows of 9°C (48°F) at this time of year.
That means if you’re not too keen on cold temperatures, this is the ideal time for you to visit. You could take the opportunity to go hiking and explore remote corners of the country in the midnight sun.
Take advantage of the sunny days, that go on and on, to explore to your heart’s content. Drive the Ring Road around the island in less time. Having longer days means you can cover more distance.
Or you could take all the time you want and really soak up the atmosphere and gorgeous landscape of glaciers, lagoons and jagged mountains.
- Check out our summer tours to Iceland for more inspiration
Visit Iceland in fall – September to November
This is the time of year when the weather starts to drop, and the days become shorter. This shoulder season is ideal if you are seeking smaller crowds and don’t mind cooler temperatures.
Travelling to Iceland during the fall period means witnessing the transition from summer to winter. As the darkness slowly sets in, you’ll start having good chances to spot the Northern Lights. There are also good chances of snow fall the later it gets in the season.
At this time of year, you could still take on a road trip around the country. Or it’s the perfect time to discover the Golden Circle and south coast in more depth.
Visit Iceland in winter – December to February
The winter months are the coldest of the year, as you would expect for a northern country. But don’t let the winter weather in Iceland put you off.
From mid-October, it can be cold, dark, and windy, but thankfully the climate is tempered by the ocean and the Gulf Stream. That’s why it won’t be as cold as you may expect from the ice-land. Between December and February, average temperatures hover around -2°C (28°F).
At this time of year however, the weather becomes less stable. It means you may encounter all seasons in one day. Always be prepared for it all when visiting Iceland in winter: storms, snow, rain, and wind.
During this snowy season, you may prefer a city break with guided activities from Reykjavík. It’ll allow you to settle into one location, but still see the highlights of the surrounding regions.
If you feel adventurous or want to test your winter driving skills, opt for a self-drive adventure. Take the wheel to see specific regions or tour around the country.
Photograph the glittering waterfalls, admire the snowy mountains, and hopefully catch sight of the colorful Northern Lights in the night sky.
Visit Iceland in spring – March to May
Did you know that the country celebrates the “First day of summer” in April? That’s because it’s an exciting time of revival and reawakening.
The spring season is the most varied time of the year, transitioning between snowy winter weather to bright and sunny days. From March, the temperature in Iceland starts to climb back up and so does the number of daylight hours.
This is another ideal time to visit if you’re looking to get away from the crowds and enjoy Iceland in a bit more peace. Relax in the hot springs or heated pools after days of exploring around the south coast. This is a great time for birdwatching as well.
Best time to visit Iceland for the Northern Lights
The Northern Lights, also called Aurora Borealis, are a natural phenomenon that occur all year long. However, in summer they are rarely seen, thanks to the midnight sun in the northern region where they occur.
From late August, you could catch a glimpse of them as the nights start to lengthen. For the best sightings, travel to Iceland in winter, between October and March.
Auroras are one of the world’s most beautiful natural sights to behold.
The best way to see them is standing under a clear dark sky, free from city light pollution. This location would preferably be somewhere between the 65th and 72nd parallel north. That area is called the “Northern Lights Belt” because it has some of the strongest solar activity necessary to see the beautiful dancing lights.
- Browse our best tours to spot the Aurora Borealis in Iceland
- Related: Read our Northern Lights guide to Iceland
Best time to visit Iceland for a road trip
Dreaming of taking on the Ring Road, the affectionate name for Route 1 and the highway that circles Iceland? Just imagine putting on your favourite playlist and then seeing the glaciers and mountains ahead of you…
The summer is the best time to go on a road trip in Iceland, and there are many reasons for that.
Thanks to the long daylight hours of summer, you could spend more time exploring or driving each day. Wake up early if you want to set off and see a popular attraction in relative quiet or drive until the evening to reach your destination.
There is simply more time to do outdoor activities in summer!
The other bonus of this season is that more remote routes and areas of Iceland are accessible at this time of year. This includes the stunning Westfjords, which are often cut off during the winter.
If you’re keen to visit the highlands, this is the ideal time as mountain roads are shut the rest of the year.
- You can view all our Ring Road tours for your Iceland road trip.
Best time to visit Iceland on a city break
You can enjoy a stay in Reykjavík for a short city break all year long. The capital city is buzzing and thriving whatever the season, with fun events, excellent restaurants, and plenty of attractions to visit.
Although we do recommend booking excursions to see more of the surroundings in the Reykjanes, west and south coast regions. All within a day or two’s drive, you could discover some of Iceland’s biggest highlights and jaw-dropping scenery.
What you want to do on your city break will influence when you visit Iceland.
To go on walks on the beach and maybe even dip your toes in the sea, come in summer. Want to witness the Imagine Peace Tower in honor of John Lennon? Visit Reykjavík in the autumn. Many museums, like the Perlan’s Wonders of Iceland exhibition, are open all year long.
For the northern lights, always visit the capital (and book a tour outside the city!) between October and March for the best sighting opportunities.
Best time to visit Iceland to go camping
Camping in Iceland will be something you remember for a long time. Wake up in the quiet of the stunning Icelandic countryside. It doesn’t get much better than that!
Most camping sites (and you should only camp in designated areas) are open between May and September. In more remote regions, you may find they have restricted times between June and August. That may be due to roads not being accessible to reach them until the summer.
Best time to visit Iceland for hiking
You probably won’t be surprised to learn that summer is the best time to travel to Iceland if you want to take on its rugged mountains by foot.
Hiking on his volcanic island will be unforgettable, so if you’re a keen mountaineer, don’t forget your gear at home. Come between late May and September for the best weather and most accessible mountain trails. You’ll also enjoy long days to take advantage of the paths and gorgeous views.
You may find that if you come earlier or later in the year, mountains will have snow on the top and make hiking more perilous. Activities such as hiking in Iceland are extremely dependent on weather after all. Always make sure to keep yourself safe!
Perhaps you also have your eye on Landmannalaugar in the highlands. Hiking in the highlands is an incredible experience! However, visiting this remote region is limited by the opening of the road leading into it. Usually, it opens around mid-June.
- Check out these Iceland tours that are ideal for hiking enthusiasts.
Best time to visit Iceland for wildlife watching
It’s not just the landscape that is awe-inspiring in Iceland, but also the wildlife! The spring and summer are the best time of the year to spot two of the most famous animals that visit our shores.
The cute puffins and mighty whales.
Nearly 60% of the entire Atlantic puffin population spend their summers in Iceland. That’s 8 to 10 million puffins!
These adorable and clumsy birds start arriving in late April and head back to sea around early August. You’ll find them in largest quantities in the Westman Islands in South Iceland, Grímsey island in North Iceland and the beautiful Westfjords.
Whales on the other hand are present all year long. But the summer is the best time to see them. This is when you’re most likely to spot minke, humpback and sperm whales.
The waters are also usually less choppy at this time of year, making the experience better if you don’t have strong sea legs.
And even if you’re only in Reykjavík for a short city break, you could go whale watch from the capital.
Best time to visit Iceland for music festivals
Icelandic music is recognised worldwide and it’s no wonder! Some amazing bands come from this small nation, including Björk, Kaleo, Sigur Ros, and Of Monsters and Men, among many others.
Not only that, but it attracts talented acts from around the globe for its fun (and scenic!) music festivals. Look out for:
- Iceland Airwaves in early November
- Secret Solstice Festival in late June
- Þjóðhátíð in early August
Do you feel ready to pick which season or month is best for you now? We hope so! Your next vacation could be one of “fire and ice”.
Iceland Tours has a selection of summer or winter packages to take you to specific areas or around the country if you want to. You can browse depending on your preferred season or interests. Or get in touch if you have more questions!
