Is Iceland Expensive? Spending In The Land Of Fire And Ice

Is Iceland expensive
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Is Iceland expensive? If you’re asking that then you’re probably planning a trip across to this far-flung corner of Europe, up where colossal ice fields creak above whale-filled Atlantic waters and where spurting geysers issue from fissures in the volcanic-rock ground. It’s an incredible place, but…

Sadly, Iceland isn’t famed as a cheap destination. Chances are that you’re going to have to fork out a lot more than you normally would for this particular jaunt. It might just be worth it though, what with roaring waterfalls, epic multi-day hikes, eye-watering glaciers, and quaint fishing towns by black-rock beaches all on the menu.

This guide will run through what we think you’ll need to have in the bank account for a trip to Iceland. It’s got information on what hotels will set you back, how much you’ll have to have at the ready for the most popular activities, and even what it costs to get over to the Land of Ice and Fire in the first place.

How much does a holiday cost in Iceland?

Iceland beach
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A vacation to Iceland isn’t likely to be the cheapest trip you’ve ever made. We’d estimate that the average week-long jaunt will set you back around $2,370. That’s based on staying in midrange hotels the whole way, eating out to a total of no more than $60 per day, having one night on the town, and your own car hire. We haven’t included the cost of getting over to Iceland in the first place, which can be cheap from Europe but a lot more expensive from the US.

There’s plenty of scope to do Iceland cheaper than this. For that, you’ll need to seek out the hostel stays and campsites, which can cut nightly accommodation rates to around $90-110 per night. You should also consider cooking for yourself (as supermarkets are cheaper) and ditching drinking sessions in Iceland for duty-free booze that’s bought before you even cross the border.

It’s also possible to spend stacks more than what we’ve outlined above, especially since Iceland is home to some particularly spectacular backcountry hotels that have access to their own natural spas and boast viewing platforms for the Northern Lights. They can command rates of over $700 per night in the peak season, and not much less in the low season.

Is Iceland expensive to travel to?

Iceland gorge
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Iceland is now way more accessible than it once was. Not only has it emerged as a convenient stopover point for transatlantic carriers going between Europe and America, but it’s also become a bit of a destination of choice for some of the globe’s best-known budget names – easyJet, Jet2, Wizz. And those low-cost carriers don’t just fly in from the EU. There are also services withe start-up brands like PLAY that link to big east-coast cities like Baltimore, Boston, and even Orlando.

Virtually all international air traffic drops into the Keflavík International Airport 30 miles south of Reykjavík, the Icelandic capital. Airfares vary considerably, changing a lot with the seasons and a lot depending on your origin destination. That said, stats made available on flight comparison site Momondo show that the average cost of links in from New York is just over $400 return but around just $150 from London.

You should find that the cost of flights to Iceland dips in the winter months. That’s because fewer travellers will be looking to tour the country at that time, especially since some of the most famous hiking trails and scenic drives will be shut due to snow coverage.

We’d say add about $150 to the budget to reach Iceland in the first place but around $300-500 if you’re planning on coming in from the USA or Canada.

Is Iceland expensive for hotels?

Iceland icebergs
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Generally speaking, hotels in Iceland will be pricier than what you pay in a lot of Europe’s popular destinations, from Spain to Italy, London to Berlin. It’s just that the going rate for a night’s sleep here is a touch higher, putting the average cost of a hotel at around the $150-180 mark.

There are some options that mean you’ll pay less, but even a hostel in Iceland costs something like $110 per night. You can, however, really push the boat out if you want to, with exceptionally high-class spa hotels in the capital and romantic dome hotels that are built specifically for watching the Northern Lights in the backcountry.

Here’s a look at a couple of hotels from across the spectrum in Iceland:

  • Bus Hostel ($) – A cool, clean hostel that has discounted beds near the bus station (hence the name). You’ll also save money at the bar, where there’s a generous nightly happy hour.
  • ODDSSON Hotel ($$) – This midrange hotel option has an edge of the boutique about it and offers a stay in the quiet streets of east Reykjavík.
  • Hotel Grimsborgir – Your Golden Circle Retreat ($$$) – Situated in the wild Icelandic backcountry amid the famous sights of the Golden Circle, this hotel has rooftop hot tubs and a sumptuous breakfast buffet.

The main thing you’re likely to notice affecting the price of stays in Iceland is the season you travel. Winter means some great deals as demand plummets when the snows hit, although city breaks to Reykjavík do remain popular so hotels there don’t cost all that much less. Summer, on the other hand, is peak time, and means you’ll usually need to pay at least a 20% premium on rooms.

We’d say a budget of $150-170 per night is a good way to go in Iceland.

Is Iceland expensive for food?

Waterfall in Iceland
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Perhaps a little surprisingly, Iceland has transformed into something of a foodie hub in the last few years. The spreading trend of New Nordic cooking has made its name here with fancy restaurants like Sjávargrillið and Grillmarkaðurinn leading the way. But there’s also been a boom in interest in the local cuisine, its fresh fish, fermented dishes, and hearty comfort food.

The downside? Sampling all that hardly ever comes cheap. You’re going to need a hefty budget of something like $80-100 per person if you want to eat out everyday in Iceland. To put that into perspective, that’s double what we’d recommend setting aside for Spain and Italy, which are foodie destinations extraordinaire.

One way to save is to shop at supermarkets and cook for yourself. However, that brings the added requirement that you book a stay with self-catering facilities or have the ability to cook for yourself if you’re camping. What’s more, supermarkets are still pretty pricy in Iceland, with average monthly shopping bills here topping $1,050 per person!

Is Iceland expensive for nightlife?

Iceland road
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First off – no one travels to Iceland for the nightlife. If you’re looking to party, party, and then party some more, this probably isn’t the destination for you. Europe hosts capitals like Madrid, isles like Zante, and buzzy Central-Eastern European cities like Krakow and Budapest for the hedonists. Iceland is much more about nature, and – here’s the main point – far too expensive to be a clubbing mecca.

It’s not unusual for a beer to cost $10 a pop, but some places will charge up to $15 for locally brewed craft stuff. Things hardly ease up if you decide to pre-drink with your own ammo, either. State-run liquor stores apply pretty hefty taxes to most drinks, to the point where a bottle of vodka could cost in excess of $90 and a basic bottle of wine will set you back in the region of $20. It’s hardly a surprise that most folks stock up in duty free when they jet in!

If you’re determined to party in Iceland, then there’s not really anywhere else to do it other than the capital of Reykjavík. There, we’d budget something along the lines of $200 for a night on the town.

The cost of things to do in Iceland

Iceland countryside
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One of the great pulls of Iceland is the explorations promised by this tundra-dashed, fire-forged, ice-carved world on the edge of the Arctic Circle. The good news is that a lot of that comes cheap. All you need is a good pair of boots, a map, and a sense of adventure.

Oh, and a rental car will hardly hurt. Your own wheels will make it easy to hit the trailheads, explore the Golden Triangle (an area that contains Iceland’s most famous sights), and cruise the scenic byways. Vehicle hire usually costs in the region of $30-60 per day, depending on what model you go for and how long you’re coming for.

On top of those wheels, there are other costs associated with activities in Iceland. Here’s a look at a few examples:

  • A night in a refuge hut on the Laugavegur Trail, Iceland’s most famous walking trail – Around $65 per person, with a surcharge of $4 for hot showers. The whole route takes two or three days, so you need to book multiples of these.
  • Parking fee at the must-see Thingvellir National Park – $4. Only guests who come on organized tours can avoid this. All people driving must pay.
  • Entry to the iconic Blue Lagoon of Iceland – $92. This is for a premium entry to the famous outdoor-indoor spa lagoon near Reykjavík. It’s a great way to finish off a holiday with some rest and recuperation.

Our estimation for a total activity budget in Iceland is around about $60 per person, per day, which covers a car hire and some extra attractions along the way.

Is Iceland expensive? Our verdict

Yes, Iceland is expensive. In fact, it’s up there with the most expensive places to vacation in Europe. Prices are similar to other Scandinavian countries like Denmark, Norway, and Sweden, largely due to high taxes on goods. Hotels are also noticeably pricy here, with rates similar to big city destinations like NYC or London – around $160 a night is normal. Finally, activities can be a lot, but there are also plenty of chances to enjoy the country’s wild backcountry on a budget, though you’re likely to need a hire car that comes in at upwards of $30 per day to do that.

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Joe has been a freelance travel writer for over nine years. His writing and roaming have taken him from the colonial towns of Mexico to the chowks of Mumbai to the Southern Alps of New Zealand. When he's not putting together the next epic blog on the best Greek islands or ski fields in France, you can usually find him surfing or hiking – his two top hobbies.