Find out how much a trip to Iceland would cost to help you better budget your trip. How expensive is Iceland? What’s the condition of the Icelandic currency? Read on to discover our guide on spending and saving money in Iceland.
The nature of Iceland, which boasts of glaciers, waterfalls, active volcanoes, ancient mountains, geysers, and black beaches, draws a myriad of international visitors every year, each searching for adventures and memories to last a lifetime.
However, this fair country holds a reputation other than the allure of its natural wonders. The questions on everybody’s lips before they decide to book their flight, besides which tours to engage in and which hotels to reserve, is precisely how much money they will need in Iceland. Is Iceland expensive to visit, or is it possible to travel on a tighter budget?
According to Numbeo's Cost of Living Index, Iceland currently ranks as the third most expensive country in the world. Local banks have also studied the essential travel costs for tourists, and the numbers are staggering.
Staying in hotels is 10-32% more expensive in Reykjavik than in other Nordic capitals; prices of restaurants and lodging exceed the EU average by 44%, while the cost of alcoholic beverages outstrips the same standard by a whopping 123%.
Knowing how expensive Iceland is, you shouldn’t get too disheartened; there are multiple ways to travel in Iceland without emptying your bank account.
Click here to skip to estimations of daily spendings according to different criteria.
Photo from Wikimedia, Creative Commons, by Thorsten Schmidt. No edits made.
It might come as a surprise to some people that a nation of roughly 330,000 people has its very own currency. The currency of Iceland is called Krona (ISK). It has a long history of independent monetary policies, including being pegged to the Danish krone, the British pound, the US dollar, and the Euro.
The history of the Krona is a complicated one, with the locals regularly arguing for or against keeping it. What you should bear in mind when traveling to the country is the indisputable fact that this currency of Iceland has little to no value outside our shores. The Central Bank of Iceland determines its worth, and very few banks outside of Iceland ordinarily carry or exchange it.
This is why, when traveling here, you should not carry large amounts of currency with you. You can exchange your notes at the airport, but the exchange rate is more favorable if you do so in a bank in Reykjavik.
Also, remember to change your money back before leaving to avoid getting stuck with a currency that no bank abroad really wants.
It’s most common for travelers and locals alike to pay for everything on their credit or debit cards. From small food shacks to large shopping centers: everywhere in Iceland accepts card payments, so it may be worth just packing light and paying with your plastic.
To make it easier to understand how much you’ll spend in Iceland, all prices have been converted from ISK to USD. However, it’s important to remember that exchange rates do fluctuate constantly. So the prices quoted here are bound to vary slightly, and you’ll always pay the actual ISK amount.
What you’ll end up paying for accommodation in Iceland largely depends on the type of lodging you select. From cottages and hostels to guesthouses and apartments, the variety at hand has a vast price range, and there are surely options that will suit your particular needs.
Expensive as the overall selection might be, you won’t find any five stars hotels as of yet since the upscale market just isn’t large enough. Despite that, you could pay the same for a hotel as you’d pay in New York or London. For 3 or 4 star hotels, the prices range from an affordable 40 USD to 780 USD per night, with most establishments offering free Wi-Fi and breakfast.
Expensive lodging is not only the case for visitors but also locals; the price of a roof over one's head is soaring. There’s a housing problem on the rise in Reykjavik, where the top percent of the community monopolizes the current generation of renters that are incapable of investing in homes.
A significant factor in this situation is the staggering number of apartments leased through Airbnb in Reykjavik. If you're considering this route, think about the community you're coming to, and try not to exacerbate this problem for the locals.
Consider booking official accommodations, and remember that renting out entire apartments is also available, as is booking people's summer cottages in the countryside, which is much more appreciated. These summer houses offer closeness to nature, tranquility, and exclusivity. They often come with a private hot tub while still being very affordable.
Nobody wants to stay cooped up in a hotel for the duration of their stay, so even if you book the cheapest accommodation with this in mind, tour bookings, transportation, and the issue of food still add to your spending.
However, by booking summer or winter packages that combine different establishments and include discounts for accommodation, transport, and breakfast, you save yourself the jolt when it comes to taking care of the bill.
Your cheapest bet, however, will most usually be camping. Luckily, that is an option of steadily increasing availability when traveling around Iceland. Camping allows you to get closer to the nature that you're here to see and is by far the most sustainable option, providing that you leave the area in the state where you found it.
When camping in Iceland, you still need the means to travel to your selected locations. That is where car rentals and self-drive tours come in handy. You’re provided with a vehicle or a camper with a rooftop tent and a detailed itinerary that makes you the guide, enabling you to move around the island and visit sights on your own.
But remember that Iceland is situated on the edge of the Arctic Circle, so camping is an infinitely easier option during the summer months. Camping in the Icelandic winter is an activity reserved for only the most avid trekkers, who are experts in reading the weather forecast and possess all the proper equipment, and have years of experience when it comes to surviving in the wild.
If you're feeling adventurous, there’s also the option of hitchhiking, which is exceptionally safe in Iceland. If you're driving a rental, picking up hitchhikers and suggesting that they pitch in for petrol is an excellent way of saving gas money.
As for the case of inner-city transport, do not take a taxi unless it's necessary, and only if you're going to be traveling short distances within the city. The flag rate starts at about 4.70 USD, and from there, the meter runs fast. Reykjavik is, in fact, a very roam-friendly capital, as well as boasting the public bus service Straeto, where the regular fare is around 3.50 USD and limitless within the hour.
Public transportation outside the capital is not as good, though. If you’re traveling anywhere outside the city, you should know that renting a small car is always a lot less expensive than taking a public bus.
A big mistake that some newcomers make is to take a taxi from KEF Airport to Reykjavik; rent a car, or opt for the shuttle bus instead for 28 USD, which will save tenfold.
In the last few years, Iceland has witnessed a surge in its local food scene, with numerous world-class restaurants sprouting all over the capital. The possibilities for dining are endless; traditional Icelandic food is fused with other cuisines, or spiced up with exotic ingredients, to create venues for fine dining that stand tall amongst the competition.
Eating out is relatively expensive (the average plate will cost between 15.50 USD and 31 USD), so the locals consider restaurant dining a treat instead of a regular occurrence. If you're going to be eating out in Iceland every night of your stay, expect your expenses to soar.
Instead, you should research the possibilities and plan for one or two special occasions. As it’s with most things in Iceland, they might come at a cost, but they’re well worth it for the unique and quality experience.
Be careful when you buy fast food like pizza, burgers or sandwiches. One might think it more cost-effective, but in reality, Reykjavik's casual dining pretty much falls within the same price range as the more refined dining. A pizza usually costs around 24 USD—virtually the same price as a meal at a nice restaurant.
Eating out in Reykjavik is expensive. The best way to save a buck is to take advantage of lunch hours when numerous inner-city restaurants offer reduced prices or two-for-one deals on selected dishes.
The most economical way of eating food in Iceland is to cook it yourself. If you're purchasing groceries, avoid the supermarket chain 10-11, which is by far the most expensive grocery store in Iceland. Shopping there might go as far as doubling your grocery bill.
Photo from Nathan Dumlao
Instead, hit the low-price stores, such as Netto, Kronan, and Bonus, each has numerous locations in and outside the capital. These stores are ideal for lunch-pack shopping before you leave town and embark on your adventures. Road-side kiosks tend to offer things like burgers and hot dogs, but for sky-high city restaurant prices.
If you find yourself wandering the inner Reykjavik streets at the oddest of hours, the local stable Krambudin at Skolavordustigur (a stone's throw away from Hallgrimskirkja Church) recently became a 24/7 store. They’re cheaper than 10-11, and their selection is much more organic.
You might also have heard that Iceland just saw its first Costco Supermarket open for business, but that is an endeavor more intended for locals, who do flock there because of the incredible price drop.
However, you need a membership card to enter, and the store’s location is quite a way off from the center, meaning you’ll spend more money on transport if you don’t possess a car.
Photo courtesy of Grillid
As for the case of alcohol, Iceland’s relationship with it’s a rather complicated one. Prohibition is part of the country’s only recent history, and although Icelanders do like to wet their whistle, the accessibility is somewhat limited according to international standards.
Alcohol only sells in the state-run liquor store known as aTVR or Vinbudin (the locals call it “rikid” or “the state”), which is only open during office hours. Stock up beforehand if you plan to go out or even stay in. Even in these state-run stores, taxes are high, so an even better bet is to shop duty-free at the airport when you arrive.
Photo courtesy of Von Mathus Gastropub
You should also watch out for what appears to be beer on the shelves of local supermarkets - it's not. It's a product designed to have the taste and appearance of the beverage but contains little to no alcohol content.
Despite all of this, you really can’t avoid hitting the streets at some point, and you shouldn’t since Reykjavik boasts of over 50 quality bars and pubs that are a joy to visit. Although the prices are high (roughly 7.80 USD for a pint), Reykjavik luckily boasts a vibrant happy hour culture, where you can hit the bars at the correct times for the best prices.
Now that you’re pretty aware of how expensive Iceland is, don’t expect to save money on shots, mixers, or cocktails since those rarely fall under the happy hour menus. If beer is not your drink, most happy hours include the house’s red and white wines.
Photo courtesy of Von Mathus Gastropub
How much is a cup of coffee in Iceland? You may want to consider it an odd treat instead of a daily buy. A cup of latte or cappuccino goes for around 5 USD, tea at about 3 USD (usually with free hot water refills), and a regular black coffee goes for anything from 1.50 USD to 4 USD.
There are a few ways to get around this. Since Iceland is one of the biggest coffee-consuming nations globally, your accommodation might very well include it as complimentary. You'll also find free cups of coffee at most banks and some grocery stores, such as Vidir or Bonus, intended for customers.
Now that you’re aware of some prices in Iceland, avoid buying bottled water. Faucet water in Iceland is among the cleanest and purest in the world, so unless you're in a dubious public bathroom with a warning sign on the sink, it’s always safe to drink. Just bring a water bottle with you, and rest assured that every establishment will happily refill it for you.
Photo courtesy of Smaralind mall
When it comes to shopping in Iceland, the estimation ultimately depends on what you're here for and what you're willing to spend. Although enjoying Iceland is not solely reserved for the wealthy, shopping here might very well be.
Fashion wear in Iceland is taxed through the roof; for instance, a pair of Levi's jeans is sold with a roughly 40% markup compared to Scandinavia, the UK, and the U.S.
Most locals prefer to do their biggest shopping online or abroad, heading to discount stores in Copenhagen or Berlin in unison with their travel plans. Icelanders also love to hunt for discounts and sales, in which case the two Reykjavik shopping malls, Kringlan and Smaralind, are the prime destinations.
Photo courtesy of Hordur Ellert olafsson at the Reykjavik Record Shop
The city offers a wealth of local design stores, each holding unique and hand-made garments, but for an attractive price. Shopping vintage is another option, where the underivative Fatamarkadurinn beats the trendy Sputnik! in being economical.
You can also head to Kolaportid Flea Market - the only place in Reykjavik where you can practice the art of haggling. The market is only open during the weekend, so if you want to pay next to nothing for an Icelandic "lopapeysa" or vintage wear, roam the aisles just before closing on Sunday when the prices drop to near giveaways.
If you're looking for souvenirs, the so-called "puffin shops" that litter the local streets might promise a bargain on authentic Icelandic memorabilia. But they’re specially tailored tourist traps that only sell mass-produced plastic ornaments from China.
These shops are also driving out local businesses, so you should rather hunt for the more authentic souvenirs at the National Museum gift shop, the Handknitting Association of Iceland, or the aforementioned Kolaportid Flea Market.
Besides, the best memories you can buy are the numerous adventures you’ll embark on and all the stunning natural sights you’ll behold. Just remember to pack a camera, and you can bring all those memories back with you.
The best things in life are free, they say. The Icelandic nature boasts of wonders unparalleled anywhere else in the world. It’s a place where the geothermally active terrain of hot springs and geysers meets with rural coastal villages, in contrast with wild and uninhabited Highlands.
Although feasting your eyes on these marvels comes at no cost, you still need the means to get there and a place to stay, as well as the proper gear and guidance. Nature isn't only there to be looked at; you can and should participate in activities offered to experience it fully.
So when you head to, for example, Thingvellir National Park, a rift valley at the conjuncture of two tectonic plates, you can add significantly to that experience by going snorkeling in Silfra Fissure. Or, if you visit Skaftafell National Park, home to the largest ice cap in Europe, you can embark on a glacier hike, go ice-climbing, or venture inside an ice cave.
Luckily, Iceland offers various guided services to make all of these activities available to visitors. This is the case even with a celestial phenomenon like the northern lights.
Though they appear in the winter sky of their own accord, some people work around the clock to calculate their arrival for you by using solar wind readings and weather forecasts. If that fails, most companies offer you compensation for your tour.
That compensation usually allows you to embark on the same tour on a different night to try your luck again. It’s therefore wise, if the lights are at the top of your bucket list, to book a northern lights excursion for the beginning of your stay.
Tours differ significantly in expenses, but our advice to you is to book packages, as one adventure will undoubtedly leave you thirsty for more. If you buy your tours one at a time, the costs will add up a lot faster than if you allow the experts to join a few together for you.
Iceland also offers endless possibilities for hiking and trekking, where you can explore the vastness of the Highlands over a few days while staying in cabins in between. Hikes are a summer activity, but you still need to possess warm clothes, good hiking boots, and food since there are no shops around.
Remember always to make a travel plan and then leave the said plan at safetravel.is so you can be located and rescued if you get into trouble. The nature of Iceland should not be underestimated, but if you follow the proper guidelines, you should be fine.
Apart from embarking into the wild, there are also plentiful opportunities to sightsee within municipal limits. The capital of Reykjavik possesses a myriad of museums and sights, some of which are free of charge and some of which you can save a buck when visiting by purchasing passes.
The Reykjavik City Card is an economical and excellent way to get the most out of your stay in the capital, providing entrances to a great selection of galleries and museums, as well as all swimming pools in Reykjavik and public transport. The pass also provides you with a discount on multiple tours and services when you want to leave town, meaning you won't only save money if you stay in the city.
We hope this article has given you an idea of the different expenses and possibilities when traveling in Iceland. There's nothing left now except to present you with estimated budgets to better your abilities to plan the journey of your dreams.
The Backpacker's approach to traveling in Iceland includes no essential transport except a round trip with the airport shuttle Flybus. Otherwise, they can hitchhike.
They would camp in the city, where the night goes for about 17 USD, provided they book the whole week. Included are a couple of additional spendings, such as electricity rent or using a washing machine once.
This person would cook their meals, where 62 USD should buy them groceries for the week. When we throw in two 72-hour City Cards, showers are covered with daily trips to one of Reykjavik's geothermal swimming pools.
Week's expenses for this approach come to around 320 USD, or 46 USD a day.
Extra: Backpacker's Splurge
With one night out, one night eating out, and one budget tour such as a Golden Circle Minibus Tour, the estimation rises to about 438 USD for the week or 63 USD per day.
The Minimalist's approach includes hostel accommodation at about 31 USD per night, where cooking facilities enable them groceries for the week for around 39 USD. Let's throw in a case of Icelandic beer for roughly 15 USD to keep the fridge stocked!
This individual would go to a cafe a couple of times and eat out once and allow themselves to purchase one Combo Tour such as Whale Watching and the Golden Circle for approximately 155 USD.
The Minimalist could spend a day driving along the South Coast or visiting the Snaefellsnes Peninsula. A small car will suffice if the season is summer.
Week's expenses of this route come to about 510 USD, or 73 USD a day.
Extra: Minimalist's Splurge
They would hit a cafe three times, eat out maybe four times and buy additional groceries for 62 USD. They might purchase a couple of meet-on-location tours such as Horse Riding and Dinner in North Iceland for 124 USD and Small Group Silfra Snorkeling Adventure From Thingvellir for 116 USD.
The Traveler uses their four-wheel drive car to explore the Highland roads and sightsee the wild nature of Iceland and stay outside Reykjavik for several nights.
A week like that would come to about 1,340 USD, or 192 USD for the day.
Extra: Traveler's Splurge
The Big Spender might book a nice hotel for 235 USD per night and a cottage in the countryside for 118 USD per night. That way, they could enjoy the full extent of the land and the municipalities and capital city.
They would rent a luxury car for seven days at 93 USD per day and go on three different Combo Tours for 467 USD.
They might hit a cafe five times during the week and eat out every night. They wouldn't hesitate in matching their meals with wine and quality craft beer, which doubles restaurant expenses.
The Big Spender could, of course, spend a whole lot more, but this data is meant to showcase a week where the goal isn't to spend money but to see Iceland off a budget.
This approach would leave the week at 2,569 USD or 366 USD per day.
Extra: The Big Spender's Splurge
If this individual wants to splurge, the sky's the limit. Why not add a helicopter tour with a touchdown on Langjokull Glacier for 693 USD?
Now that you've seen the different approaches to estimated Iceland budgets, you can compare the costs with self-drive tours and all-included travel packages.
A week's self-drive tour around the whole country, with a car, accommodation, breakfast, and a Blue Lagoon voucher such as this one is 1,012 USD, where added meals and gas expenses would bring the estimation to 156 USD a day.
This would top the Traveler's approach - while including more comforts and a lot more sightseeing. There are also budget self-drives such as this one available for 693 USD that don't have breakfast or vouchers - ideal for the Minimalist!
An all-included package such as this one offers Reykjavik accommodation for five nights, one night at a country hotel, two bus tours, and a Blue Lagoon voucher, all for 1,051 USD.
Add a few night outs to that, and the estimation would come down to 195 USD per day, which matches the Traveler's approach and tops the Big Spender route by miles in being economical. The selection goes on and on, but this should give you an idea.
PLEASE NOTE that all prices listed are subject to change, and we do our best to keep them updated to show the correct information. If you have any additional questions on the costs of traveling in Iceland, don't hesitate to place your questions in the comments below, and we will answer them right away.