Is Iceland expensive?

Thinking of taking a trip to Iceland but concerned about the cost? You're in the right place. Here we address that all-important question — is Iceland expensive? — and share cash-saving tips that'll cut costs without cutting down enjoying this extraordinary island to the max.

Is travelling to Iceland expensive?

In a word: yes. Travelling to Iceland can be relatively expensive, especially considering the high cost of living, and high price of imported goods. In addition, as a tourist, you'll encounter higher prices for accommodation, meals, transportation, and activities.

That said, this doesn't mean a trip to Iceland has to break the bank. With careful planning, you can still enjoy everything this beautiful country has to offer without overspending.

Not a fan of planning? Browse our customisable Iceland itineraries, or talk to a local expert.

The average daily budget for tourists in Iceland tends to be around £240 or $300 USD (41,000 ISK).

This includes all your travel basics such as accommodation, meals, transportation, and activities. However, this cost can surge if you opt for luxury accommodation, or partake in higher-priced activities, such as whale-watching and diving.

Also remember, exchange rates can change daily, which will impact your actual spend in your local currency.

Cost of accommodation

Where you choose to stay in Iceland significantly influences how much you'll spend. The same goes for the type of accommodation you pick, and the time of year.

For those on a budget, hostels are an affordable option, costing around $16 to $50 per night. These are often communal spaces, which can be a great way to meet fellow travellers.

Hotels, on the other hand, provide more privacy and comfort but come with a higher price tag. Average hotel costs range from $80 - $200 per night, depending on their rating and location.

Meanwhile, Airbnbs are a compromise between hostels and hotels, offering private rooms or entire homes at varying prices. Depending on the amenities and location, Airbnbs cost, on average, $50— $80 per night.

Iceland also offers lots of unique accommodation options, such as farm stays.

Remember — booking in advance can help secure the most budget-friendly options, especially in popular weekend break locations like Reykjavik.

Also bear in mind that most accommodation options charge per room rather than per person, and prices tend to rise during the summer months.

On that subject, if you're set on visiting in summer, discover the best places to visit in Iceland at this time of year.

Lastly, if you choose to stay in a more remote area, you may also have to factor in the cost of bus or taxi fares.

Can't wait for your trip to Iceland? Increase your chances of an unforgettable trip by choosing one of the best places to stay in Reykjavik.

Cost of food

Iceland's remoteness leads to higher food prices, due to the costs of importation.

For a budget-saving approach, consider shopping to self-cater meals. Prices at supermarkets are much lower than eating out.

For example, a small jar of peanut butter from a supermarket costs about $3.49 (480 ISK), whereas a hotel breakfast could cost from €9 to €15.

If you’re planning to eat out, expect dinner to cost around $25 to $40.

Love your food? Find out more about eating and drinking in Iceland.

Feel free to reach out to our local experts for personalized itineraries and tips!

Airfare and getting there

Airfare is one aspect of your Iceland budget that'll see prices differ according to your location, when you book your flight, and when you fly.

In general, the average airfare hovers around $300-$565. Those who choose airlines serving a local airport hub might get better deals. 

For instance, travellers from the US have found better fares travelling to Paris or Amsterdam with a two-week stopover in Iceland than flying there directly.

Remember airfares can fluctuate wildly depending on the season, day of the week, and how early you book your flights. So, research carefully before booking your flight.

Tip from Rough Guides: Learn about the best ways to get to Iceland.

Cost of transport: rental cars, taxis and buses

Choosing the right transport in Iceland can make a big difference to your expenditure.

Rental cars offer the freedom to explore at your own pace. Costs vary depending on the car type and season, with hiring a small car costing around $50 a day. Just be aware of extras like insurance and fuel.

Taxis are available but can be quite costly in Iceland. Rates start from around 695 ISK (about $5.60) and most taxi rides within Reykjavik are likely to be between 2,000 ISK ($16) and 5,000 ISK ($40). Note there's no Uber in Iceland.

Public transport is an option within Reykjavik, but bear in mind the city is small and can be explored by foot.

To get to and from the airport, catch bus 55, which costs 2,280 ISK each way.

Our tip is to check out KLAPP tickets for public transport. These can be bought through an app.

Another tip — if you don't hire a car, it's advisable to book guided tours to reach the island's rugged, remote beauty spots.

Entrance fees and attractions

Iceland is a country brimming with unforgettable sights and attractions. While some are free, others come with an admission fee. Here's what you need to know.

• Hallgrímskirkja Church: this magnificent architectural marvel towers over the city of Reykjavik. While you can explore the church for free, for a stunning panoramic view of the city, you need to pay an entrance fee of 1000 ISK (approx. 9 USD) to access the tower.
• Perlan: the extensive exhibitions, planetarium, and observation deck comes with an admission fee of about 2900 ISK (30 USD), with discounted prices for children.
• Blue Lagoon Spa: known for its unique geothermal properties, the Blue Lagoon is a must-visit. Prices start from around 6100 ISK (48 USD), excluding transportation.
• Skogar Museum: showcasing traditional Icelandic turf houses, the museum charges 2000 ISK (18 US). Kids under 12 go free.
• The Golden Circle: if you have your own wheels, you can explore this popular tourist route for free. It includes Thingvellir National Park, the Geysir geothermal area, and Gullfoss waterfall.

As a general rule, most natural attractions are free of charge, letting you explore Iceland’s mind-blowing scenery without burning a hole in your pocket.

If you want to take a tour, multiple operators offer different packages — shop around to grab the best deal according to your interests and budget.

What does it cost to see the Northern Lights?

Witnessing the mystical beauty of the Northern Lights — or Aurora Borealis — in Iceland, can come with costs.

If you've rented a car and are comfortable getting to remote places on your own, you might be able to view the Northern Lights for free. This is, of course, dependent on weather conditions and solar activity.

For an organised Northern Lights tour, expect to pay anywhere between $50 and $100 per person. These usually include transport to and from your hotel and an experienced guide who'll teach you about the phenomenon and help you spot it. 

Meanwhile, luxury Northern Lights experiences include dinner in a remote location, overnight camping or stays in a specialised hotel where you can watch the lights from the comfort of a glass igloo. These experiences range from $150 to $500 per person.

Remember, no matter how much you pay, witnessing the Northern Lights is not guaranteed as it's a natural phenomenon.

That said, most tour companies offer the chance to rebook for another night if you don't get to see the lights, which might just add an element of thrill to your Iceland trip!

Incredible activities that cost nothing

Believe it or not, some of the most mesmerising experiences in Iceland come at no cost at all. Here are a few of them:

• Admire nature: most of Iceland's natural wonders come with no admission fee. For example, you can immerse yourself in hot pools, and places like Thingvellir National Park, the Skogafoss and Seljalandsfoss waterfalls, and the Geysir geothermal area for free.
• Community pools: lots of towns offer communal pools for a small fee, with hot tubs and sometimes slides for an entertaining, budget-friendly soak.
• Hiking: to explore the country's unparalleled natural beauty at your own pace, tackle one of Iceland's hiking trails, like the Laugavegur.
• Northern Lights: if you're in the right place at the right time, you can view this natural wonder without spending anything!

Average cost per day for travelling in Iceland

Backpackers on a tight budget can stay in dorms, eat local, and use public transport for around £50-70 ($65 to $90) a day — as long as you keep splurging to a minimum.

For those wanting a bit more comfort, if you’d prefer a private room, enjoy socializing more, and want to take a few tours, budget for £80-120 ($100 to $150) a day.

Meanwhile, mid-range travellers staying in tourist-oriented accommodation should plan to spend around £150-200 ($185 to $250) per day.

Looking for luxury? Your Iceland travel budget will be anything from £300-500 ($370 to $620) per day, depending on how much you want to indulge.

The most budget-friendly time to visit Iceland

Iceland's high season runs from June to August. This is when the bulk of tourists visit, leading to increased prices, particularly for accommodation and tours.

Rough Guides tip: make sure to read all about the best time to visit Iceland

Depending on what you want to experience, visiting Iceland during the May-September shoulder season is a cheaper, enjoyable alternative. Not only will you avoid high season crowds, but the weather will be pleasantly mild.

If you don't mind the cold, visiting Iceland in winter comes with plenty of perks, including cheaper accommodation, and awe-inspiring sights like snowy mountaintops, glittering waterfalls and — of course — the Northern Lights.

Average cost for organised travel in Iceland

Iceland is well-known for its stunning landscapes and unique experiences, and it is best explored with the help of organized travel operators.

This will be of particular interest to families, visitors who aren’t sure how to begin planning their trip, and those who are looking to immerse themselves in their chosen destination, hassle-free.

Going a step further, tailor-made travel to Iceland enables you to customize your trip to your exact needs, taking into account the places you most want to visit, and your interests.

For example, our customizable Iceland trip will take you from the stunning waterfalls of the Golden Circle to the mesmerizing fjords.

Tour costs range from $80 – $150 per person per day, but prices can go up depending on the complexity and exclusivity of the tour.

For this, you'll enjoy numerous benefits—local expertise, the convenience of having someone else handle booking accommodation and activities, and a completely personalized experience. Truly priceless.

Cost of travelling independently in Iceland

Independent travel allows for more flexibility and the freedom to go at your own pace. Since you don't have to stick to an itinerary set by someone else, you can linger longer at attractions you really love, and more on from those you don't. 

Of course, costs will vary according to your own choices. For example, if you decide to hire a car, stay in a hostel and cook your own food, you should end up saving money.

That said, travelling independently in Iceland comes with non-financial costs. You’ll need to spend time planning your route and researching all the expenses you’ll incur along the way.

In practical terms, this means calculating the cost of transportation and what you’ll pay for accommodation at each stop.

You'll also need to earmark and budget for activities and excursions you want to take in each area you plan to visit.

While travelling independently in Iceland might be cheaper than organized travel, bear in mind that it can come with unexpected costs, no matter how well you think you’ve budgeted.

Travel smarter: Iceland on a budget

How to save money on flights and accommodation

Want to save money on flights and accommodations while travelling to Iceland? Here are some helpful tips:

• Book early: one of the most effective ways to save money is to book flights, accommodation and tours in advance. Many companies offer early-bird discounts.
• Travel off-peak: trips taken during the shoulder seasons (May and September) or in winter will see you secure lower rates on flights and accommodation. Keep in mind, though, that external factors like weather can limit some activities.
• Compare prices: use price comparison sites to ensure you're getting the best deal before booking your flights and accommodation.
• Use flight rewards: if you're part of a flight rewards program, try to use your points to offset costs.
• Stay in guesthouses or hostels: these are cheaper than hotels.
• Stay out of the city: accommodation further from the city is often cheaper. Just bear in mind you might have to spend more on transport.
• Read reviews: remember that cheaper prices aren't a good deal if the experience is less than desirable, so read reviews from fellow travellers.

Money saving tips for dining in Iceland

Use these dining tips to enjoy a taste of Iceland without blowing your budget:

• Shop for groceries: save a big chunk of your budget by buying groceries and cooking your own meals. Icelandic supermarkets like Bónus and Krónan offer a wide range of products at reasonable prices.
• Eat local: indulge in local foods like skyr (Icelandic yogurt), pylsur (Icelandic hotdogs), and lamb soup — they're affordable and give you some local flavour.
• Take out: consider buying take-away goods from local bakeries and supermarkets to save money on dining out.
• Carry snacks: while sightseeing, bring your own snacks and refillable water bottles.
• Happy hours: many bars offer discounted deals during their "happy hour".
• Opt for set menus or lunch specials: many restaurants offer set menus or lunchtime deals at a reduced price — a great way to sample local dishes without spending a lot.

Save on activity costs without missing out on fun

Saving money definitely doesn't mean you have to skimp on fun! Here's how you can optimise your Icelandic adventure without breaking the bank:

• Free activities: make the most of free activities around the country. As outlined above, many natural wonders — waterfalls, geysers, and hiking trails — have no admission fee.
• Get a City Card: if you're staying in Reykjavik, consider investing in a City Card, which offers free access to museums, pools, and public transport.
• Pick and choose: while guided tours can be expensive, they offer a convenience that independent travel doesn't. But ask yourself whether you need a guided tour for every activity. For example, choose guided tours for activities like caving, glacier hiking, whale watching and diving, and self-guide when it's safe and convenient.
• Pooling: expenses like car rental and fuel can be shared if you're travelling in a group.
• Book in advance: some tours and activities offer discounts if they’re booked a couple of months in advance.

Make smarter transport choices

Navigating Iceland can be quite an adventure, but with several modes of transport available, making smart, economical choices can help you save a chunk of your budget.

• Bus passports: Iceland offers numerous 'bus passports' for unlimited travel in specific zones. It's an economic way of getting around, especially if you're planning to stay a while.
• Carpooling: apps like Carpool Iceland or hitchhiking websites offer ride-sharing opportunities.
• Rental cars: If you're comfortable driving, renting a small car is an efficient way to cover a lot of ground. Gas prices may seem intimidating, so plan your route in advance to avoid unnecessary mileage.
• Walking and biking: within cities, walking or renting a bike is an affordable, eco-friendly way to explore.
• Public transport: Reykjavik has a pretty reliable public transport network.

All that considered, despite Iceland's reputation for being expensive, it's perfectly possible to enjoy unforgettable experiences without breaking the bank.

In short, saving money in Iceland is as much about making informed choices as it is about planning ahead, and booking early. Following our tips will make your trip to Iceland all the more memorable without overspending.

Inspired to visit? Browse our customisable Iceland itineraries, or talk to a local expert to kickstart your dream trip.