How Expensive is Iceland?
People have a lot of ideas and preconceived notions before they ever set foot on our fair shores. They think a lot about the cold as well as how much things cost. We often get queries wondering how expensive is Iceland, so I thought it would be good to address this. Everything from the price of a cup of coffee to a liter of gasoline will affect your trip, so let’s see how Iceland stacks up. I won’t lie; it’s an expensive country, so it helps to know what to expect.
Is Iceland Expensive?
Like many things, it’s all relative. It’s true that Iceland is the third most expensive country in the world. So if you are coming from a place that has a very low cost of living, when you visit Iceland, it’s going to seem extremely expensive. But if you come from Switzerland, perhaps it will just seem par for the course. And of course, if you’re living here and earning an Icelandic salary, then prices won’t seem so astronomically high.
But of course, most of the people reading this are visitors looking to rent an Iceland campervan, go on day tours, fill up their tank, etc. You want to know about more practical things like how much food in Iceland costs at the grocery store or the price of public transportation.
Let’s cover some of the more common costs so that you can have a good idea of what’s coming in terms of prices for your Iceland trip. Warning: there might be a bit of sticker shock ahead. Make sure you’re sitting down and not eating or drinking anything.
Food and Drink
Food and beverages will probably be one of the most expensive things you’ll encounter in Iceland. People are sometimes shocked to discover that eating on the cheap (soup and a sandwich, for example), will set them back 1.875 ISK ($15 USD or 13€). Dining for sit-down service at restaurants starts at around 3.125 ISK ($25 or 22€) per person. And dining at nicer establishments only goes up from there. If you’re used to paying $10 or 10€ for a meal, these prices might cause a stinging sensation in your wallet.
Getting a simple cup of coffee is around 500-750 ISK ($4-6 or 3-5€), even for just a regular coffee or a cappuccino. Beer and wine are definitely steeper and will set you back 1.250-1.875 ISK ($10-15 or 8-13€) for one glass. And if you were thinking about going to McDonald’s to save some bucks, don’t count on it. A standard combo deal runs 1.625-2.250 ISK ($13-18 or 11-16€).
If your heart has stopped a little, I understand. We have the reverse; when we travel abroad, we marvel at how affordable everything is.
How to Save Money on Food in Iceland
Because you’ll want to stay well-fed and energized during your trip of a lifetime, we need to figure out an affordable way to eat. Cooking is your best friend while you travel in Iceland, and with a camper, you already have your kitchen with you.
We’ve got a few discount supermarkets that you can visit to pick up staples like rice, pasta, dried fruit, and more. Check if your camper rental comes with a cooler for perishable items like lunch meat, butter, cheese for sandwiches, or milk.
I suggest planning a menu for the week (or however long your trip is) so you know exactly what portions you need to buy for breakfast, lunch, and dinner. Maybe even purchase a tupperware or two at the store for keeping leftovers. This will help you keep from overspending and stay within your budget while having variety. After all, Icelandic hot dogs are both delicious and affordable, but I assume you don’t want to eat them during your entire trip.
Supermarkets in Iceland
Look for Bónus, Nettó, and Krónan when checking out Icelandic supermarkets. These are the cheapest ones that offer the best deals.
If you decide to come camping in Iceland in the summer, book early. This is by far the best way to travel around the Ring Road, so many people choose this option. It’s also the cheapest. Depending on the make and model, camper rental starts around 13.000 ISK ($100 or 88€) per day and can go up to 49.000 ISK ($390 345€) per day. Sometimes you can pay this for a hotel alone, so having your vehicle and accommodation in one has never been a better choice.
If you’re traveling around Iceland by campervan, there might be a night or two when you decide to stay at a hotel. Maybe you just miss your bed or simply want to take a nice hot shower and use some fluffy white towels. Whatever your reason, if you decide to stay at a hotel or hostel for the night, be prepared to shell out a pretty penny.
Whether you choose an Airbnb, guest house, or hotel, prices start around 15.000-18.753 ($120-$150 USD or 106-133€) per night. Hostels are only slightly cheaper, costing 4.000-9.500 ISK ($40-90 USD or 35-80 €).
These are the prices of some typical things you might want to do during your visit:
Dinner for two at a restaurant 7.500-12.500 ISK ($60-100 USD or 53-88€)
Ticket for the Blue Lagoon - starting at 8.100 ISK ($65 USD or 60€)
Why is Iceland So Expensive?
Costs in Iceland are higher than in many other places, but why is that? Well, we’re a small volcanic island in the North Atlantic, so we need to import many things. Not being able to grow tons of fruits and vegetables on vast amounts of open space can get pricey. We’ve got lots of fish as well as sheep and other livestock, but other food products are not as easy to come by.
The same applies to gas and diesel. While we use 25% geothermal energy to power our cities, we still need to import fossil fuels to the island.
Tips for Saving Money During Your Trip
You’ll already taken the biggest money-saving move of them all: renting a campervan. As you saw above, the cost of renting a hotel room in Iceland will eat up a large part of your travel budget. Choosing a home on wheels for an Iceland camping trip is the most effective way to save money here. Let’s look at some other tips for saving money in Iceland.
The prices quoted in this article make the assumption that you come during the summer, which is when we receive the majority of our visitors. If you come from during the shoulder season of spring or autumn or the off-season of winter, you can save some big bucks. Expect discounts of 20-50% on everything from campervan rental to excursions with tour operators.
Tip #2. Visit a national park.
One of the biggest money saving tips of any trip to Iceland is to take advantage of free activities. Our national parks are not only our pride and joy which showcase our breathtaking natural assets, they also don’t have any entrance fees. This means you can explore to your heart’s content and save a few bucks in the process.
Along the Golden Circle, for example, you’ll find Thingvellir National Park. This park is not only historically significant, but you can see a split in the earth’s crust here. This gash is known as the Silfra fissure and it’s where two tectonic plates meet. The earth is literally splitting and pulling apart. Not bad for a free activity, right?
Tip #3 Do other free activities like the Northern Lights or hot springs.
The country is filled with free hot pots and hot springs in places like Landmannalaugar or Reykjadalur valley. You don’t have to go to the Blue Lagoon to experience Icelandic bathing culture. It’s entirely possible to do it on the cheap. Either aim for free natural hot springs or less costly alternatives like the Mývatn Nature Baths or Hofsós pool. Iceland's magical Northern Lights are also a sight to behold, and are 100% free.
Is it Expensive to Live in Iceland?
If you’re contemplating a move to Iceland, you’re probably curious about how the cost of living stacks up against other countries. Iceland does have a minimum wage of 300.000 ISK (about $2,400 USD or 2.120€ per month). Some are trying to raise it to 425.000 ISK ($3,400 USD or 3.000€per month). Depending on where you live, this may seem like a lot; but remember that we get Icelandic wages because we have to pay Icelandic prices.
Here's the cost of some common items to put things in perspective:
Loaf of bread 250-450 ISK (500 grams)
Liter of milk 130-180 ISK (remember that you need 3.8 liters to make a gallon)
Liter of gas 200-220 ISK
Single fare Reykjavik bus ticket price 440 ISK
Rent on a 1-bedroom in Reykjavik 130.000 ISK
How Expensive is Iceland?
I hope this has answered your questions about how expensive Iceland is. We know everything is relative, but sometimes it helps to have something familiar to compare to. Save up for your trip, set a budget, and be prepared to cook! These are some of the best ways to prepare for a visit to our small, expensive county. You won’t regret it though, as you’ll see things here that you can’t find anywhere else.