When planning a trip to Iceland, you’ll probably hear many responses. “Wow, Iceland is so beautiful! That’s amazing” is a popular one. “It’s going to be cold/windy/snowy/other awful weather condition” is another one. Yet another is “I’ve heard it’s really expensive to visit Iceland”. So, is that true? Well…Iceland is a Scandinavian country, and much like its Nordic neighbors, it can be quite costly to visit. Yet that doesn’t mean you can’t travel on a budget while here. It’s true that the cost of living, transportation, restaurants, and accommodation are relatively high. Think New York, but slightly pricier. But there are still lots of free activities and other ways to save money while traveling in Iceland.
Is Living in Iceland Expensive?
While you may not be planning a move to Iceland, the cost of living will definitely affect your trip. Everything from rent to utilities to groceries to gasoline to transportation has a direct effect on what you will pay as a tourist. Iceland ranked as the world’s third most expensive country in 2018. It comes in after Bermuda and Switzerland and is more expensive than European countries like Norway, Denmark, and Luxembourg. It’s definitely not cheap to go to Iceland, whether it’s for a short vacation or to live.
How Much Do Things Cost in Reykjavik?
The give you an idea for budgeting for Iceland, here are some common travel expenses you might want to know the prices for. This assumes that you’re traveling during high season in the summer. If you come in the winter, you’ll find lower prices everywhere on everything.
Hotel in Downtown Reykjavik: $142-482 (125-425€) per night
Hostel in Downtown Reykjavik: $37-88 (32-75€) per night
Guesthouses and Airbnb accommodation usually run between $115-186 (95-150€) per night.
Car rentals start around $60 (52€) per day in the summer.
Campervan rental starts around $146 (129€) in the summer.
Prices for car and campervan rental are reduced in the off-season between 30-50%.
A meal in a cheap restaurant: $16-28 (10-24€)
A 3-course meal: $50-75 (40-60€)
Beer: $10-15 (7-11€)
Cappuccino: $4-6 (3-5€)
How Do I Budget for Iceland and Save Money?
It’s true that Iceland is one of the world’s least budget-friendly countries for travelers. Estimates of how much money you realistically need hover around $175 per day for mid-range travelers. If you’ve got budget constraints, there are definitely ways to pinch your pennies to lower this estimate to around $60-75 (53-66€) per day.
The first one that springs to mind is what you eat. Restaurants and food, in general, are expensive in Iceland. The island has to import a lot of crops, so much of that cost gets passed on to the consumer. Iceland has a discount supermarket chain called Bónus, and you will create a ton of savings just by cooking your own meals.
Another great way to save money is camping rather than staying in hotels. You can either rent a car and stay in your tent at campsites or rent a campervan. Campervans start around $61 (54€) a day in low season. They are a much cheaper alternative than renting a car and booking a room somewhere. You should also look into the Iceland Campingcard to see if the $173 (149€) is worth it. Whether you have a tent, campervan, or motorhome, you still need to pay to stay overnight at a campsite in Iceland. When traveling with two people, the Campingcard pays for itself in a few days. Families should also seriously consider this option.
Yet another money-saving hack is to bring your own metal water bottle. The water here is clean and fresh, so there’s no need to buy bottled water. I also highly recommend coming during shoulder season or the offseason. Lastly, take advantage of free activities Iceland has to offer. While whale watching tours and glacier hikes are really cool, they can add up quickly. Pick and choose your activities carefully so your pocketbook doesn’t take a huge hit.
Is Iceland Expensive to Visit?
In a word, yes. But there are also plenty of ways to save money. In addition to cooking your own meals and staying in lower cost accommodation (including campervans), coming during the shoulder season or season will help immensely. Take advantage of free activities in Iceland. And remember, bring your own water bottle! There’s no need to spend $3 every time you want water when there is an abundance of fresh, clean water here.