Is Iceland Expensive for Travelers?
Updated: Dec 16, 2020
Is Iceland expensive? The country has something of a reputation for being costly for visitors and sadly, that’s not a myth. When it comes to the cost of living indexes, Iceland can usually be found near the top, along with other Nordic nations like Norway. In recent years, it’s been steadily working its way up the rankings, which is bad news for those travelling on a tight budget. But just how expensive is it?
If you’re planning to visit Iceland, it’s a good idea to work out an itinerary well in advance. You’ll have more choice when it comes to things like rental cars and accommodation, which means you can get the best price possible for what you need. Pare back your trip to the minimum number of days you need to do the sightseeing you want to do, and save those rest days for when you’re back home.
Typically, it’s reasonably easy to pick up a cheap air fare to Iceland. In terms of accommodation, expect to pay about $25 for a dorm bed, while a room in a basic guesthouse with a shared bathroom will set you back in the region of $63. For a centrally located, top Reykjavik hotel such as the Art Deco Hotel Borg, that figure rises to about $400.
Is it expensive to travel in iceland?
Those keen to rent a car need to factor in the relatively high cost of hire compared to many other European and North American countries. A small car might set you back around $350 for a week in July, which compares to about $190 for the same week in Barcelona. Upgrade to a 4x4, add in extras like gravel insurance or a sat nav and that’s a significant chunk of your travel budget eaten up. Petrol runs about 240ISK ($1.94) a litre on average, compared to the UK at $1.64 and the US significantly less than that. But also check that your hire car has unlimited mileage, as not all do.
Though the high speed train from Keflavik International Airport to Reykjavik is a few years off yet, there is a good value airport bus. The even better news is that it stops at the Blue Lagoon thermal baths and spa. There are huge lockers, as well as plenty of towels and hairdryers, so it’s absolutely the done thing to stop off on the way to or from the airport. The total cost for a return journey is currently 6499 ISK, which converts to just over $50 per person for a ride lasting 45 minutes. Not cheap, but not ridiculously overpriced either.
The Blue Lagoon itself is a costly visit, but most visitors agree it’s well worth the entrance fee which starts at 6990 ISK (approximately $57). This includes entrance to the thermal baths, a towel, a silica mud mask and a drink. Premium packages and spa treatments are available at additional cost. However, there are places where you can enjoy your hot spring experience for considerably less. If saving money is a consideration, look into visiting one of the country’s free hot springs. Landbrotalaug, about an hour and a half from the capital, is tiny but perfect for a retreat, while Gamla Laugin and Hrunalaug, near Flúðir in Southern Iceland, are a similar drive. Reykjavik itself has a geothermal beach at Nauthólsvík (free in summer, 500 ISK in winter).
Public Transportation in Iceland – They aren’t cheap
However, if you look at bus fares to other destinations, costs quickly mount up. To take the bus from Reykjavik along the south coast to Skógar, to visit its waterfall and museum would set you back 7500 ISK, with a small discount for booking a return fare. That works out at about $117 return at current exchange rates. Better value than straightforward public transportation is the Iceland On Your Own Hiking Pass which gives you a bus transfer from Reykjavik to the start of a hiking route and back from the end, so long as you don’t catch the same bus twice.
This pass covers you for two routes and is valid for long enough not to have to do them back to back. The Laugavegur hiking trail begins at Landmannalaugar and from there it is a 3 to 4 day hike to Þórsmörk nature reserve. Slightly shorter is the Fimmvörðuháls hiking trail which takes you through a pass between the glaciers Eyjafjallajökull and Mýrdalsjökull and takes about 8 to 10 hours to complete. Experienced hikers can choose to combine the two. In all the pass costs 14000 ISK per person, around $114.
If there’s more than one of you, that rental car is starting to look pretty cheap after all.
Booking a day tour in Iceland
Day tours are another option when it comes to exploring this North Atlantic nation. For those considering the Golden Circle, the cheapest tour offered by Reykjavik Excursions comes in at 6900 ISK, about $57 per person. For that price, you get to see Geysir, where you’ll see Strokkur erupt, stroll around the majestic Gullfoss waterfall and of course visit the site of Iceland’s first parliament and the North American-Eurasian plate boundary, þingvellir National Park. It’s a little rushed, so consider upgrading to the slightly more expensive version of the tour. For an extra 600 ISK, less than $5, you get a longer stop at each of the three destinations plus a visit to Friðheimar greenhouse cultivation centre as well.
Almost as popular is their South Coast tour. For 10999ISK, about $89, you get a scenic tour of the country’s pretty south coast, which includes the black sand beach at Reynisfjara, the dramatic basalt sea stacks of Reynisdrangar and the waterfalls Seljalandsfoss and Skógafoss. Compared to that Skógar bus ride, it’s good value for money. To see the Northern Lights, expect to pay from 4999ISK (about $39) for a coach trip, double for a small group tour. Though trips are non-refundable, if you don’t get to see the Northern Lights, the operator will usually take you out again free of charge. Make sure that if you’re travelling between late August and April, you arrange a tour for early in your visit to ensure that this is possible.
How expensive is iceland food?
How expensive is food in Iceland? Eating out – and drinking alcohol – is dear, particularly in the capital. When you’re totting up the cost of a trip to Iceland, this is going to be a significant factor. It’s easy to spend upwards of 2000-3000ISK just for a basic meal and upwards of 5000ISK (about $38) for a halfway decent restaurant. Expect to pay about 3000ISK for a main course. Try Café Loki for traditional Icelandic food or the Icelandic Gourmet Feast at Tapas Barinn for a splurge.
But savvy travellers can save money by buying the makings of lunch (and breakfast if it’s not included in their hotel or guest house rate). Pack an empty flask in your luggage and you’ll save money on coffees. Pop in to a grocery store (Bónus stores probably offer the best value) and try self-catering. While you’re on the road, don’t rule out a meal at a petrol station which are often good value. Likewise, Iceland’s most famous street food, the humble hot dog, is a steal – where else in the country can you feed yourself for 500 ISK ($4)? Check out Bæjarins Beztu Pylsur which is said to be the best in the capital. If you plan to drink, consider visiting the duty free store at Keflavik International Airport on the way in.
So yes, Iceland’s an expensive country. But if you visit Iceland, you’ll soon realise that it’s one of the most fascinating, unique and breathtakingly beautiful countries in the world. And that’s more than worth the money, in my book.