It doesn’t matter how you twist and turn it: your Iceland trip cost will be high relative to many other travel destinations. For this island, the high prices are a symptom of a good way of life, being remote, and a booming tourism industry.
Setting up a budget for a trip is an important step in securing a vacation that gives you the best bang for your buck. Your Iceland trip cost might be a bit higher than most other trips, but it has its cause. You can actually get away with not paying as much as you initially thought. All you need to do is read through this article to know what to look for, and you will have a great trip to Iceland!
The Pricey Iceland Trip Cost
Look, we love this country and everything in it, but we are the first to admit that the cost of hanging around all these fantastic wonders can be a bit much. Everything, from Iceland hotel prices to a sip of wine, will most likely be more expensive than you first imagined.
Before diving into the high numbers of some prices, we’d like to give a quick disclaimer about the Iceland trip cost. Current exchange rate: 1 Icelandic Króna (ISK), the local currency, is equal to roughly 0.007 USD. So, if you pay ISK 1,000 for something, that high number is simply equal to about 7 US dollars. Worth keeping in mind. This estimation is subject to change since the exchange rate varies daily.
Why is Iceland so Expensive?
Iceland is a perfect storm of being incredibly remote, having a high standard of living, holding a stable currency, and a growing increase in demand with low supply. These factors together make it an expensive country to visit. For Icelanders, the prices are (often) on par with their salaries, so they are not as bothered by the higher prices.
The remote aspect comes into play whenever anything needs to be imported to the country. Even though Iceland is striving to be as self-sufficient as possible, they import roughly 35% of their foods and beverages. Government slaps a hefty import tax on those goods too. This gets passed on to the consumer, which hikes up the price.
The high standard of living in Iceland comes with high prices. The average pre-tax income in Iceland is very high compared to the rest of the world. The lowest income bracket in Iceland is way better off than most other countries, which is reflected in the price of the consumer.
An increase in demand with a low supply comes into play when numerous tourists are now competing for the same goods as the locals. That doesn’t mean more goods are being produced in the country, so the price rises with the demand.
Accommodation in Iceland
Are you a 5-star and all-inclusive kind of visitor, or a “give me a tent and a bottle of water”-kind of traveler? Whether Iceland is expensive to visit or not is often up to you as a visitor and is strongly reflected in your accommodation. If you are on a budget and want to save money on anything, accommodation is most likely the easiest option.
A hotel stay per person per night in Iceland can go from as low as ISK 5,500 but is likely to be around ISK 14,300 depending on where in the country you are. Hostels are good options with the lowest price per night being around ISK 2,300 and going up to around ISK 5,500.
If you don’t want to be in the city, but still want to stay in a house, have a look at the many cottages and cabins available in Iceland. They will add to your Iceland trip cost, but will be worth it if you really like the countryside. These will go for between ISK 8,000 - 21,000 depending on location and amenities.
If you’re looking for a cheap stay, we recommend making it a camping trip of sorts. There are many free and cheap camping sites in Iceland, so make sure to take full advantage of them. Most camping grounds are fully equipped with everything you need, and most will have free Wi-Fi at least at the main building.
Eating in Iceland
If you cook all your food yourself, you are likely to get away with the cheapest alternative. However, most of us don’t go on vacation to spend time cooking. Iceland food prices are generally expensive, and it gets even more so when you eat out for both lunch and dinner. If you stay at a hotel or similar, you will likely have breakfast included.
When you go stay at some hostels and camping grounds, you are likely to have a place nearby that offers some sort of breakfast or lunch buffet. Keep an eye out for deals like this to lower your Iceland trip cost.
The price for eating out in Iceland varies greatly depending on where you are, and which place you choose. It’s like everywhere else in the world in that sense. Expensive places can go sky-high in terms of their prices, and low-budget places might not offer the best in terms of food quality. A general ballpark figure is that eating dinner out for two should land around ISK 5,000 if you are at a mid-range restaurant in any of the larger towns or cities.
If you want to eat out lunch and dinner every day and keep to some budget, you should count on spending roughly ISK 4,000 per day. If you want a beer or a glass of wine with your food, add another ISK 1,000 per beverage.
We recommend checking out the Icelandic “hot dog with everything” for a budget-friendly meal. It will be the best hot dog you have ever had, for only around ISK 450.
Doing Things in Iceland
Iceland is a nation of adventure, and it’s meant to be experienced as one. Even though you can experience a lot in Iceland without paying anything, you will most likely want to do something that costs money at some point.
For a budget-friendly holiday, we suggest keeping to the scenic nature and exploring the many free Iceland hot springs, caves, beaches, and free art that can be found in scattered locations all over the island. You will likely have to pay for parking on certain spots, but you won’t have to pay admission to see a waterfall, glacier, or volcano.
Iceland is expensive when it comes to attractions, so make sure to map out what you want to do for your holiday. Depending on what you wish to do, admission to certain sites and attractions can range from ISK 2,800 to ISK 8,000 per person.
Apart from simply living in Iceland for a short while during your vacation, you will first have to take the flight to this incredibly remote, volcanic, mythical island. Luckily, the flight doesn’t have to be the priciest item on your travel budget! But giving a flight estimate isn’t possible since the prices vary depending on the company, your location, and the season.
A budget-friendly trip often involves renting your own car. Apart from the daily fee, gas will be your big expense in this category. So, gas in Iceland, is it expensive? Not particularly, but being around ISK 300-330 per liter, it’s still high enough.
To spend some time in Iceland, you’ll have to plan your visit to stretch your budget. Here are some common prices for things you might want to include in your Iceland trip cost:
- A good hostel or budget hotel: ISK 4,000 – 6,000 per person per night
- A good meal with a beverage: ISK 2,000 – 4,000 per meal
- An excursion or average tour: ISK 15,000 per person per tour
- A sandwich meal at Subway: ISK 1,500
- A hamburger meal at Metro: ISK 2,000
It’s important to know what you’re going for when you’re traveling Iceland on a budget. Cutting costs are as essential as making the right choices. If you want to cut out accommodation and go for a more luxurious camping option, renting a campervan is a great solution. Find cheap campervan rentals in Iceland with Campervan Iceland and get ready for the road trip of your life!