Is Iceland Expensive? How to Survive Sky-High Prices in Iceland

No doubt about it: Iceland is pricey. As an island, the cost of imported goods can jack prices in Iceland up to levels you’d never expect. But the tourism industry is booming and highly competitive, with companies vying for your business.

The real question is: does that make costs fall enough to make the country affordable or is Iceland expensive still?

Cost of Flying to Iceland

Flights to Iceland have been reasonably-priced for nearly a decade now, ever since the value of the Icelandic króna collapsed beginning in 2008.

fly icelandair | is iceland expensive
Actually, it’s scheduled at 5 hours and 40 minutes, or roughly the same time as flying from DC to San Francisco.

Even though the currency has re-gained strength, so many airlines have jumped on the tourism trend for visiting Iceland that you’ll find dozens of daily flights into Keflavik airport. It’s not hard to find a good airfare sale!

Approximate Price of Flights from USA to Iceland (High Season)

Look for sales that bring this down to $350-450 from major airports!

Approximate Price of Flights from USA to Iceland (Low Season)

Prices drop as low as $250 in the dead of winter, especially from east coast hubs.

Approximate Price of Flights from Europe to Iceland (High Season)

Low-cost carriers can drop this down to $150ish, but watch out for bag fees and extra charges.

Approximate Price of Flights from Europe to Iceland (Low Season)

I’ve seen prices as low as $54 from London, round-trip including taxes! Keep your eyes peeled.

Want to save even more on Iceland airfare? Look for package deals that bundle your airfare and hotel together! My package included round-trip airfare, 3 nights hotel, daily breakfast, airport transfers, and a visit to the Blue Lagoon — saving me about $300 compared to buying everything separately. Check websites like TravelZoo and Groupon.

Big Savings: Is Iceland Expensive in the Off-Season?

Visiting Iceland in the winter is significantly cheaper than going during summer.  City-center hotels are as low as $90/night, flights drop to $250-600, and you may even find discounts on private tours.

Want to book everything without a package?  I recommend CenterHotel Plaza, with low rates and a great location.  For even bigger savings, try Loft Hostel with dorm bunks at ~$38/night.

In other words, putting up with the cold will save you half the cost, but comes with obvious trade-offs.

Hallgrímskirkja | Halgrim's Church in Reykjavik | is iceland expensive
Hallgrímskirkja in the Snow (Halgrim’s Church in Reykjavik)

The country is gorgeous under a blanket of snow and I’d highly recommend it with one caveat: I went in mid-December when daylight hours are at their minimum.  Try February or March when you have a few more usable hours at your disposal!

Hardy travelers can still enjoy Iceland in the winter but it takes advance planning.  Read more on my tips to buy and pack some base layers ahead of time since winter clothing is very expensive in Reykjavik.

Transportation: Is Iceland Expensive to Get Around?

Driving in Iceland is one way to save money in Iceland so that you don't have to worry is iceland expensive.
Road conditions were (usually) okay.

Technically there is a bus service in Iceland, but outside of Reykjavik, schedules are infrequent and inconvenient.  Luckily, it is a breeze to drive in Iceland (especially when the weather is good): roads aren’t busy and navigation is easy.

If you need a rental car in Reykjavik, I recommend Route1 Car Rental and don’t forget you qualify for FREE rental car insurance when paying with your Chase Sapphire Preferred credit card.

Read More:

Frequently Asked Questions About Iceland (Opens in a new window) An in depth look at everything you need to know about visiting Iceland.

Five Things About Iceland That Weren’t In the Guidebooks (opens in a new window) These random facts may surprise you while planning.

The Question Remains…Is Iceland Expensive?

So with airfare and hotels priced affordably, what remains expensive?  Food, booze, and tours.

Food: Is Iceland Expensive to Eat Out?

Restaurant meals are an expensive part of traveling everywhere and Iceland was no exception.  Iceland is even more of a money pit because most options range from high quality to fine dining (or, at the very least, a huge step up from Applebee’s).

To save money:

  • Get recommendations ahead of time for affordable options that are still delicious and memorable
  • Share plates (which is widely acceptable in Iceland)
  • Load up during the free hotel breakfast
is iceland expensive | icelandic gourmet feast menu
Sure, this tapas feast is priced per person but we ordered one to split (and two other tapas a la carte to supplement the meal at a more reasonable cost)

Overall, we paid about $20/person for most of our meals, which is neither cheap nor expensive given the quality of food.  You could spend less by cooking on your own or by eating from gas stations, but since restaurants are a big part of travel culture, we didn’t want to skip them entirely.

Related Post: Try my four restaurant recommendations — all on a budget! — in Reykjavik.  (opens in new window)

Alcohol: The Iceland Budget-Breaker

Booze is taxed about a million percent in Iceland so it’s incredibly expensive to go out. Beer was usually around 900 krona ($8), a glass of house wine around 1300 krona, and mixed drinks just get started at that pricepoint.  Want top-shelf or a high-end cocktail bar?  Pack your favorite credit card.

The obvious answer to saving money in this category is not to drink, but hey, it’s vacation!  We stuck to one drink with dinner and only went to one bar during our entire visit.  Some people would consider this “missing out”, but we prioritized our daytime activities over the nightlife this trip since we couldn’t afford both.

If you want to drink more than that without blowing an entire paycheck then do what the Icelanders do: buy a bottle from a liquor store (or duty-free upon landing) and pre-game at the hotel before going out.  Hint: bars and clubs start hopping around 1am so plan accordingly.

is iceland expensive | 8 samples of icelandic beer $30
Eight samples of Icelandic/European specialty beers at Reykjavik’s MicroBar — about $30

Tours/Activities: Is Iceland Expensive in this Category?

Reykjavik is a small city and you can see it all in a day or two (less if you don’t enjoy museums).  Because of this, most visitors plan to take a few day trips to make the most of their visit while still being able to return to great restaurants, nightlife, shopping, and comfortable hotels in the city overnight.

When you’re ready to leave on day trips, plan on traveling independently.  If you’re checking out guided day tours before your visit to get a feel on prices, Iceland will seem incredibly expensive. 

The average tour runs $80 per person, and that’s if you share your experience with 40 other passengers on a bus.  Our private Golden Circle tour was about triple that because we splurged on a Super Jeep…ouch!

Geysir, on the Golden Circle. Do it yourself to save money in Iceland so you don't need to worry about is iCeland expensive.
Geysir, on the Golden Circle. Do it yourself to save money in Iceland.

Renting a car to do-it-yourself in Iceland is very straightforward and is one way to save money, especially if you’re in a group of two or more.  You can travel at your own pace and plan stops and departure times that best align with your interests.

Read More: Iceland’s Best Known Attraction: The Blue Lagoon (opens in a new window) It may be the best known attraction in Iceland, but in my opinion, it was also the country’s biggest miss.

The Bottom Line: Iceland is Expensive, but Manageable

Thankfully, getting a good price on the basics made it possible for us to piece together the rest of our trip at an affordable price. I won’t say that Iceland was cheap because we all know that’s a lie, but overall I felt our costs were in line with other western European capitals (and lower than some Nordic destinations).  If you can afford London, you can afford Iceland.

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Share your thoughts in the comments!

Where’s the most expensive place you visited?  Do you have budget tips to make Iceland less expensive?

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Want more information about visiting Iceland?  Check out my complete Iceland travel guide! 

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14 thoughts on “Is Iceland Expensive? How to Survive Sky-High Prices in Iceland”

  1. Hi Becky,
    Thanks for the informative article on Iceland. I’m going there with my travel group. It sounds like it’s going to be really fun.

  2. Thanks Becky.
    I know Iceland is a very popular destination right now.
    Was it as fabulous as people say it is or is there a bit of hype?
    Thank youj

    1. @Lisa, I think there is hype to Reykjavik. It’s a cool city and great if you get cheap airfare, but otherwise there are a hundred other places that are just as good.

      Now…the rest of Iceland (outside the capital) is truly amazing, so that’s where I’d spend most of my time.

  3. I actually think Iceland is affordable since I keep seeing advertised trips WITH airfare on Groupon for a couple hundred bucks! I want to go so bad!

  4. I have always thought Iceland was too expensive for my travel bucket list but I might have been wrong. I’ll have to think about whether going in the colder months is worth the savings!

  5. We actually returned from a 10-day trip to Iceland; it was stunningly beautiful (we drove around the entire island) but stunningly expensive as well. It makes Venice look cheap….we were not taking a high end trip–there were few choices in the rural places.

    Examples: 1 night in a very small room with a shared bathroom, no tv, no breakfast was $300 plus! We tried eating light at lunch but would end up spending around $30 pp and dinner was $45+ pp. A scoop of tuna salad and two pieces of toast from a coffee shop in Reykjavyk was $24. Traveling around to the small towns did not offer many choices. Renting an SUV plus insurance (necessary for dings from gravel, etc) set the credit card back $2500.

    As much as we loved it, the people, and the food, we won’t return due to the high costs. You just have to be prepared for the expense.

  6. Lolla Chimitris

    Hmm-I think its way easier to visit London on a budget than Iceland-there’splenty of places to grab a cheap lunch-you can have a nice (not fine dining) dinner for 15-20$ and day trips can be had for $40 and up-plus its immensely easy to just take a train and do your own day trips dropping the price even further. Hotels are probably about the same but there are a ton of vacation rentals for much less than a hotel

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