Iceland is a destination that is on many a traveller’s wish list, but it is often pushed to the back due to the fact that it is well-known as one of the most expensive countries on the planet. I know this because I had wanted to visit Iceland for years but never saw it as an option due solely to finances. However, after spending a week exploring this beautiful country, we found that it is one hundred per cent possible to travel in Iceland on a budget. But how much will an Iceland trip cost?
Well, the answer to that question varies because it is just as possible to spend your entire life savings on an Iceland holiday as it is to only spend the absolute minimum amount to survive. If you’re anything like us, then you want to see how you can visit Iceland comfortably without having to take out a second mortgage on your house. And in all honesty, the cost of a trip to Iceland does not have to be astronomically high.
There are five main categories of spending that can go into your average cost of a trip to Iceland. These include accommodation, transport, food, activities, and entertainment. Depending on your travel style and tendencies, it is possible to save a lot on one of these categories in order to spend more in another.
If you’re looking to visit this beautiful Nordic nation on a budget and you’re wondering how much a trip to Iceland will cost, read on to find out our best money-saving advice.
Iceland Trip Cost: Accommodation
One of the biggest things you need to consider in any travel budget is the cost of accommodation and it will definitely be a major factor in your Iceland trip cost. The cost of accommodation in Iceland is, unsurprisingly, quite expensive. However, there are a number of options that are available to the more budget-conscious traveller.
One of the biggest tips that I could give a traveller looking to visit Iceland on a budget is to avoid staying in hotels and to, instead, look for alternative sources of accommodation. Airbnb is a good option and a private, double room generally starts at roughly $65/night.
If you’re not travelling solo, this can be a better alternative to hostels, where the cheapest dorm bed will set you back around $35/night. Another benefit of staying in an Airbnb or hostel is they often offer self-catering facilities so you can cook your own meals and save money even further. Click here to see the best Airbnbs available in Iceland
Outside of Reykjavik, affordable Airbnbs and hostels can be hard to find especially if looking to stay in places like Vik and Jokulsarlon. We booked a couple of budget rooms through Booking.com including Hotel Kanslarinn in Hella and Hörgsland Guesthouse.
Good quality places book out quickly, particularly in high season so make sure to book your accommodation well in advance! Click here to find browse the best deals for budget rooms in Iceland!
Another popular option among budget travellers in Iceland is to hire a camper van, which kills two birds with one stone as you will also have your transport taken care of.
There are numerous camper rental companies throughout Iceland and the cheapest option for a basic manual-transmission van that sleeps two starts at around $90/day. An auto-transmission will cost about $20 more, but they all offer heaters and camp stoves/cooking supplies.
There are some complicated laws when it comes to wild camping in Iceland, however, so make sure you read up on them if you choose this option.
By far the most budget-friendly option would be to simply bring your own tent and find a campsite. Just keep in mind that it can get both very cold and extremely windy, so make sure you have appropriate equipment.
Iceland Trip Cost: Transport
Contrary to the majority of European countries, public transport in Iceland is lacking so the most effective and efficient way to get around this island nation is by car.
If you have opted for the camper van route, the only other thing you’d need to factor into you Iceland transport costs would be fuel prices, which, unsurprisingly, are not exactly affordable.
The average petrol price as of December 2019 is $1.93/litre (or $7.30 USD/gallon), which can very much add up when filling up an entire tank, especially if you plan to drive a lot.
If you plan to hire your own car and self-drive the ring road, there are a number of rental companies to choose from. While you may be inclined to hire a car through an internationally recognised company such as Hertz or Enterprise, often these companies charge a lot more than a local car hire company.
We, for instance, found a great deal from Reykjavik Cars and spent about $35/day with them, which was by far the least expensive option we were able to find. If you want to compare prices across companies we recommend browsing Rentalcars.com as they aggregate results from a number of major car hire companies.
Another factor for your Iceland trip cost to keep in mind is that cars with an automatic transmission often cost considerably more than a manual. So if you can drive stick and want to save some money, by all means, make sure you’re hiring a manual transmission.
Finally, if you do rent a car in Iceland, a great way to save money on the insurance is by going through a third party such as iCarHireInsurance. They offer excess insurance (which means you won’t have to pay anything if you get in an accident) for a fraction of the cost of most car rental companies.
Another great budget transportation option in Iceland would be to hitchhike. This can generally work a lot better if you’re travelling solo but regardless, Iceland is a fantastic and safe place to hitchhike. It continually ranks as the safest country in the world according to the Global Peace Index and hitchhikers are commonplace on the Ring Road.
If you don’t rent a car in Iceland then you’ll need to book airport transfers from Keflavik Airport. By booking in advance, you avoid having to wait in line when you arrive and can simply hop on the bus when you land. Click here to book your airport transfer to Reykjavik!
Iceland Trip Cost: Food
Another expense you will need to consider for your Iceland travel budget is the price of food. It will come as no surprise that food in Iceland is expensive, especially if you eat in a restaurant.
In fact, the average cost of a meal at even the most budget-friendly of restaurants will probably set you back about $25-30 per person. This is why the absolute biggest Iceland food budget tip I can give would be to cook your own meals.
Groceries are significantly cheaper than anything you could get at a restaurant so I would suggest stocking up on as many non-perishable items as you would need for the entirety of your trip while in Reykjavik.
This was something of a shock to us, but grocery prices in the capital city were about 10-15% less than those at supermarkets in the smaller towns along the Ring Road.
But if you want to shave a considerable amount off of your total Iceland trip cost I would wholeheartedly recommend cooking for yourself. You could end up spending no more than $25/day doing this instead of $25 per meal.
Iceland Trip Cost: Activities
Luckily for the budget traveller, it is very possible to visit Iceland and not spend a dime on any activities!
Most of the main natural sites in Iceland don’t charge any entry fees and even if they do, they most certainly will not break the bank. For example, I think the only attraction we had to pay to visit was the Kerið crater lake on the Golden Circle route and that only set us back $3 per person.
If you’re planning on spending a bit of time in the capital city, there are a number of things you do in Reykjavik on a budget and one of the best ways to see the main sites of this charming little city is by going on a free walking tour.
You don’t have to pay a thing, but you should keep in mind that the guides work only for tips and you, therefore, should throw in a few bucks if you enjoyed the tour.
While it is certainly possible to splash out on experiences — such as glacier climbing, whale watching, horseback riding, or SCUBA diving along the fault line — these things are not necessary in order to get the most out of your Iceland trip.
We didn’t do any of those aforementioned activities and didn’t feel as if we missed out on anything. The joy of Iceland is enjoying its outstanding natural beauty, and you can do this easily absolutely free.
If you don’t rent a car and are unwilling to hitchhike then your only option to see the Golden Circle and other stunning natural attractions is to book a guided from Reykjavik. Some of the best options include this full-day Golden Circle tour and this full-day South Iceland tour.
Iceland Trip Cost: Entertainment
Sometimes there is nothing better after a long day spent outside enjoying stunning natural scenery than a nice, cold beer. However, in Iceland, this is going to cost you. A lot.
Iceland has some of the most expensive liquor prices in the world and a pint of local beer at a bar can easily set you back $15. The easiest remedy to this is if you’re intending to visit Iceland on a budget, to simply abstain from drinking. However, if you do enjoy the occasional alcoholic beverages, there are ways to drink in Iceland on a budget.
One great tip is to follow the lead of the locals and stock up on your booze at the duty-free shop in the airport. These are, by far, the cheapest liquor prices you’ll find in the country as the local tax is removed. Another option is to purchase liquor at the duty-free shop at the airport you are departing from.
Reykjavik is famous for its nightlife, but keep in mind that it can be very expensive to go out. While booze prices are slightly less expensive in Reykjavik than in the rest of the country, it’s still going to be considerably more than what most people are used to paying, given that you live outside of the other Nordic countries.
All in all, alcohol prices in Iceland are incredibly expensive and if you really want to cut down on your Iceland travel cost then it’s best not to drink at all.
Average Iceland Trip Cost
So how expensive is Iceland? Well, it isn’t a cheap destination to visit, however, it is possible to travel on an incredibly tight budget while in Iceland. For the purposes of this section, I’ve averaged all of the costs so you can have an idea of how much you might spend per day while travelling in Iceland.
Accommodation: $0 – 60/night
Transport: $0 – 50/day
Food: $10 – 20/day
Activities: $0 – 10/day (not including guided tours)
Depending on your travel style, it is possible to travel to Iceland on a minimal budget. Assuming that you’re not intending to camp and hitchhike your entire trip but that you don’t drink alcohol for the duration of your trip, it’s safe to assume that your Iceland trip cost will be about $60 – 75 per day.
This does not include any pre-trip expenses such as airfare (sign up for free to Travel Freely to learn about travel hacking and fly for free!) if you want the best deals sent directly to your inbox!) or ensuring you have the right gear for your Iceland trip. This includes items such as having a proper waterproof jacket, a quality pair of boots and plenty of layers. Click here to see our full list of recommended items.
Finally, also make sure that you factor in the cost of a travel insurance policy. We personally used World Nomads for our Iceland trip however it’s important to read the policy details to ensure it’s right for you. Click here to get a quote from World Nomads.
Travelling in Iceland doesn’t have to be as expensive as you might think. If you do the proper planning and budgeting, you might find that your Iceland trip cost can be fairly affordable even in one of the most expensive countries in the world.
Are you planning a trip to Iceland? Have you been? How much did your Iceland trip cost? Let us know in the comments!