It is a well-known fact that Iceland will probably be one of the most expensive trips you’ve ever taken. But there’s a lot more to the question “is Iceland expensive?” than travelers think and there are a lot of misconceptions that visitors to the island are plagued with.
In this article, we want to set the record straight so that you properly understand how relative the concept of “expensive” is here, what you can expect, and how to budget accordingly for the trip of a lifetime.
How Expensive is Iceland?
As we touched on earlier, the term “expensive” in Iceland is relative. Iceland officially ranks as the 9th most expensive country in the world.
But if you ask a local whether they think Iceland prices are extravagant, they will admit that it’s definitely pricier compared to the rest of the world.
This is because Icelanders place a high value on each other and their quality of life. You’ll need to search pretty far and wide to find someone to accuse of exploiting or lowballing an employee with their salary. It also helps a lot that residents can enjoy high quality education almost completely free of charge and very affordable healthcare.
But when we switch the question to “is Iceland expensive to visit?” the answer changes completely. And exactly how expensive you experience the island, is impacted by a few factors:
The Season
Peak tourist season in Iceland is during the summer months (late June to late September). During these months, the average cost of a trip to Iceland accompanied by any/all attractions and activities on your itinerary will be much higher than the rest of the year.
Which Country You’re From
The punch your pocket takes differs from country to country due to exchange rates. Someone coming from Austria with Euros will definitely feel the punch way less than someone coming from Brazil with Reals.
The Size of Your Group
A solo trip to Iceland will definitely cost you more than if you’re two sharing the costs or when you’re part of a group booking and certain discounts may apply.
The Length of Your Trip
Going to Iceland for a 1-week trip will obviously cost less than a 2-week trip to Iceland will cost (unless you’re the absolute king or queen of frugal living).
Your Expectations
If you’ve just come from Thailand where a t-shirt costs just $5, you might find that your expectations are a bit unrealistic about how much a trip to Iceland costs.
What Makes Iceland Generally More Expensive?
It’s not that the island suddenly woke up one morning and decided to overcharge everyone because they just wanted to make more money. There are very legit reasons why prices in Iceland can be pretty steep:
Iceland is a Small, Sub-arctic Island
One cannot possibly expect a small, remote, sub-arctic island to be an agricultural giant. And even though Iceland has managed to produce roughly 65% of its own food and drinks each year, they still heavily rely on importation from countries such as the UK, Germany, the US, and Norway.
As you can expect, importation cost is nothing to scoff at leading to inflated prices to cover the expense.
Iceland Doesn’t Do Exploitation
This may seem harsh, but the proof is in the pudding. Just because exploitation is not so apparent in other countries, doesn’t mean it’s prevalent. This becomes clear when looking at Iceland and its labor practices.
The island is almost completely unionized (92% of the working force, to be exact). This means that even traditionally low-wage jobs earn a higher basic wage. You will struggle to find a job paying less than $15 an hour. And, obviously, these higher salaries need to be incorporated as business expenses in the prices of products or services.
Higher Tax
VAT in Iceland ranges between 11-24% depending on the product. To put this into perspective; Germany charges between 7-19%. But there is some good news for visitors to the island. If you come from abroad, you might be eligible for some VAT refunds.
Iceland Relies on a Smaller Consumer Pool
The island has a population of just under 400 000. In comparison to even just one US state of under 600 000, you can see that it could become a struggle to survive. With less demand comes inevitably increased prices in an effort for businesses to stay afloat.
A Sudden Population Surge
Even though Iceland most certainly takes advantage of summer peak tourist seasons, most of the increased prices over summer months are not because of opportunistic business practices.
As a small island with limited resources, the sudden (and incredibly drastic) increase in the populace makes the demand too big for the supply. To give you an idea; the population on the island can increase by 40% during these peak season times! So, once again, the rule of supply and demand applies.
What You Can Expect From Iceland Prices
For you to manage your expectations and plan your trip’s budget, we’ll go through some of the ball-park figures you can expect for some basics as well as popular attractions and activities on the island:
Flights prices to Iceland
As with most flights around the world, prices also fluctuate based on seasons and peak tourist times. But the following should give you a rough idea of Iceland round-trip costs:
India to Iceland trip cost = $1200 per person
Cost of a trip to Iceland from the US = $800 per person
Iceland trip cost from Canada = $1000 per person
Accommodation prices in Iceland
If you’re wondering “is Iceland expensive to visit?” you should probably not start your research off with accommodation as it just might put you off the trip completely. Accommodation will definitely be the most expensive part of your holiday. But how expensive will depend on the type of accommodation you opt for:
A hostel/backpackers = $35-$50 per person per night
A hotel = $100 - $300 per room per night
Airbnb = $200 - $300 per unit per night
Campsites = $10 - $20 per person per night
For obvious reasons, it will benefit you if you’re two sharing a hotel room or Airbnb.
Transport prices in Iceland
Of course, the transport budget will look different to those staying in and around the capital city vs. those who go on self-exploration excursions across the island. But these figures should give you a good idea of what to expect:
Car rental = $40-$50 per day + $90-$100 per full tank of gas
Public bus = $3.50
Public ferry = $13.50
Airport shuttle = $35
Food cost in Iceland
Feeling peckish? The following should offer you enough variety as well as cost options:
The self-catering/grocery route = $15 per person per day
Restaurants = $25-$30 per meal
Once again, being 2+ individuals that can share bigger self-made portions of food will be a definite budget benefit.
Activities & Attractions cost in Iceland
Many activities and attractions in Iceland such as the 10 000 Iceland waterfalls and the myriad of hiking trails are completely free of charge. But there are certain activities and attractions that will need you to open your wallet.
And, unfortunately, with some of the most notorious tourist attractions, maybe remortgage the house (just kidding, but almost). Here’s what you can expect price-wise when you’re out and about on the island:
Cost of a Road Trip in Iceland
We strongly believe that the best way to discover Iceland is by making a road trip out of it. There are many popular road trip routes on the island to choose from including the Ring Road, the Golden Circle, the Westfjords Way, the South Coast Way, and the Arctic Way.
Each will cost you different amounts depending on which you choose and the vehicle you’re doing it with.
But, for example, an Iceland Ring Road trip will cost you roughly $195 in gas. If you add on some of the most popular activities and attractions along the route, you’re looking at $720-$900 per person sharing (if you’re two) or $1070 - $1300 if you’re road-tripping solo.
Cost of The Blue Lagoon
Due to the volcanic activity on the island, Iceland boasts hundreds of natural hot springs that can either be used free of charge still in their natural form or as one of the geothermal public pools.
Probably the most infamous of these hot springs/pools is the Blue Lagoon. In fact, it’s so famous for its unique aesthetic that it’s been used in many movies such as Hostel and Star Trek. As an added benefit, those visiting the lagoon can choose between just taking a soak in its healing waters with a free silica-rich mud mask or opting for the real spa deal.
Of course, the various options at the Blue Lagoon come with various price tags and will impact the overall Blue Lagoon trip cost:
Blue Lagoon Comfort Package (entry, mud mask, use of towel, drink) = $59
Blue Lagoon Premium Package (entrance, mud mask + 2 additional, use of towel, drink, use of bathrobe, glass of sparkling wine) = $76
Retreat Spa Luxury Package (5 hrs access to the spa, private changing room, unlimited access to the exclusive Retreat Lagoon as well as the Blue Lagoon) = $408
Airport Shuttle direct to Blue Lagoon = $23
Cost of Tours in Iceland
An island that has such majestic and unique landscapes and so many natural wonders, it’s no surprise that you can’t turn a corner without bumping into another tour operator offering specialized and guided tours.
There are many things that you really don’t want to miss out on because of budget constraints due to bad planning. So here are a few of the must-do items you should have on your itinerary and what they cost:
Northern Lights
The Northern Lights is a beautiful neon light display that can be seen in the northern and southern hemispheres. Iceland is definitely a favorite viewing destination when it comes to this light spectacular.
Many opt to DIY their Northern Lights hunt, but since the phenomenon requires very specific conditions to come out and play. We suggest that you book a spot on a tour that’s led by experienced guides who are local and know exactly where and when to catch this amazing sight.
Iceland Northern Lights Trip Cost: $50-$100 per person per tour
Puffin Watching tours prices in Iceland
The Iceland Puffins are definitely not to be missed when they are on the island. These funny little penguin-like birds with their colorful beaks make the island their home every breeding season. In fact, Iceland boasts 60% of the global population of Puffins! Tours can be done via land and sea depending on the region you’re in.
Puffin tour cost: $45 - $100 per person per tour
Whale Watching tours prices in Iceland
Whales can be seen all year round, especially in Husavik (known as the whale capital of Iceland). But just like with the Puffins, many migratory whales also call the island home from April to September. Whether you opt to go whale watching in or out of season, there are plenty of tours available to go whale spotting.
Whale watching tour cost: $90 - $150 per person per tour
Ice Caves tours prices in Iceland
The ice caves are a seasonal attraction. Due to safety concerns (ice melts, remember?) the caves are only open during the cold winter months.
Ice cave tour costs: $150 - $300 per person per tour
Volcanoes tours prices in Iceland
You need to at least say that you saw both sides of the Land of Fire and Ice. Whether you decide to visit an old crater, a sleeping giant, or an active volcano with warm lava running across the earth – you will find the tour for you.
Volcano tour costs: $70 - $400
Tips on Keeping Costs Down
The following are some helpful tips on how to keep costs down during your trip to Iceland:
Always way up your options according to prices. What’s going to be more budget-friendly without cramping your specific style? Staying at a hotel, hostel, or campervan? And where should you eat? A restaurant, food truck or just grab some ingredients at the supermarket?
If you are planning on going camping (especially if you’re a family) the Camping Card is going to be a complete budget-saver for you. A Camping Card costs just €159 and will give a family of 2 adults and up to 4 children access to various camping sites all over the island for 28 nights!
Take a glance back at our accommodation section and do the maths. How much are you going to save?
Why not opt for a campervan? This is a very affordable and clever way of ticking off both the accommodation and transport boxes. And if you buy a Camping Card to park at various camping sites it’ll not only be one of the most adventurous road trips of your life, but also the most affordable!
Ask your car rental agency if they have any special offers, discounts, or vouchers they can share with you. Most rental agencies on the island have close connections and partnerships with other businesses in Iceland. Due to this business relationship, they often give rental agency clients a few extra perks that other travelers can’t get.
Do not buy any bottled water. Not only will you be wasting your money, but you’ll probably get a few giggles from locals. Iceland has some of the purest water on the planet because of its natural spring and glacier water and this water accounts for 95% of the tap water.
Because of the high quality of the island’s H2O, the water doesn’t need to be treated and contains no purification chemicals such as chlorine or nitrate.
This is probably the only place on earth where we will encourage you to pick up hitchhikers and have them pay their way. As the official safest country in the world (again), you can leave those horror movie thoughts behind when you someone’s looking for a ride. It’s a great way to save on some gas money.
Don’t grab a taxi. Taxis get really expensive, really fast. Make use of public transport or rent a vehicle.
Are you just itching for a good night out? Then why not go back to a student mindset and be on the lookout for places offering Happy Hour?
If you want to save money on food and are opting to make most meals yourself, then avoid shopping at 10-11 for your groceries. It is known as the most expensive grocery store on the island.
Whilst many have hot springs like the Blue Lagoon and the Myvatn Nature Baths on their Iceland bucket list, there are many cheaper options (even free!) alternatives that are just as special and unique (if not more so). Rather visit the cute Kvika Footbath or the Reykjadalur Hot Spring Thermal River.
Now That You’ve Got a General Idea about how expensive is Iceland
By now we should’ve answered your question “is Iceland cheap?” or “is Iceland expensive?” With the help of this article, you’ll now be able to properly plan and determine your travel budget to Iceland. Generally speaking, a trip to Iceland solo costs at least $250 per day.
A trip to Iceland for 2 will always be a more cost-effective solution as you will end up sharing most expenses. If you’re a family coming to vacation on the island, you’ll be spending roughly $1000 per day. But follow our helpful tips on keeping your budget low and you’ll get much more bang for your back when you travel to Iceland. See you on the island soon!
Comments