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Estimating Travel Costs - is Iceland Expensive for Travelers?

Updated: Aug 10, 2023

Iceland is a volcanic island located in the North Atlantic, south of the Arctic Circle. The land of Fire and Ice which ignites the hearts and minds of travelers for years. This feeling is compounded by numerous attractions that you have heard and seen online many times. Once you step into this country for the first time, you will always want to come back to see even more. That is why when planning your trip you want to see as much as possible as the small island is full of powerful waterfalls, geysers, endless lava fields, and hot springs.

Most of the time, the factor that defines the range of the trip and how much you will be able to see is unfortunately your budget. This is obviously one of the most important things and one of the first ones you organize when you decide to visit Iceland. In this post we will explore how expensive Iceland is  to help you estimate your travel costs. We will give you some tips as usual on how to save some money!

Tourists doing trekking in Iceland which does not require any cost

Is Iceland expensive?

Probably when you googled Iceland for the first time you have read about how expensive country Iceland is. I need to confirm it right at the beginning to avoid further disappointments. Iceland is an expensive country for those who are travelling on budget. We need to remember that for some people that kind of trip might be a piece of cake while for others it is a trip once in a lifetime and surviving on bread and water for the next 10 years. I am exaggerating of course, but wanted you to see that this mostly depends as well on the budget the one has.

Iceland is currently placed on the third place of the most expensive countries to live in. So what makes Iceland such an expensive country? Politics, economics and geography of course!

The severe climate of the country makes Iceland dependent on imported food with small exceptions like meat, potatoes, milk and some vegetables. Everything which is produced in USA and Europe can be found in Icelandic stores. The import tariffs are high, as are wholesale and retail margins which cause the significant increase in price.

Remember the VAT, which is added to all the products and it is 24% for the goods and 11% for foodstuffs. This is quite a lot.

Another thing that makes the cost of goods in Iceland high is Icelandic currency. It is seen as a very strong currency in the market and was even considered the world’s best performing currency in 2017.

How expensive is Iceland food

Of course during your trip to Iceland you need to eat something and you would prefer to avoid living for one week on prepared food from cans right? To help you estimate the cost of food in Iceland we will give you some average prices of the most common products:

Loaf of bread - 450.00 ISK

Butter- 223.50 ISK

Eggs (10) - 500.00 ISK

Ham (1kg) - 2,000.00 ISK

Rice (400g) 225.00 ISK

Fish (1kg) 1,400.00 ISK

Bottle of water  1,5l - 177.50 ISK

Beer 0,5l - 350.00 ISK

Sugar (1kg)- 170.00 ISK

Potatoes (1kg) - 195.00 ISK

Pasta (400g) - 200.00 ISK

The cost of products in stores are higher than in other European countries. If you wish to dine in restaurants, you need to add a bit more to your budget. For a dinner in a restaurant in Reykjavik you should be prepared to pay around 2,000.00 ISK - 4,000.00 ISK. That is not cheap as you can see and for most of the Icelanders it is more like an occasional occurrence rather than a usual routine thing.

How expensive is Iceland to travel - tourist attractions

After all those numbers there are some good news that we have for you. Most of the tourist attractions in Iceland are completely free of charge. As you already know in Iceland the main attraction is the nature and unique landscapes. There is than no entrance tickets to be able to enjoy them. If you want to see the famous Golden Circle or any of the national parks, you do not need to be worried about the tickets.

Pile of icelandic krona - is Iceland Expensive for Travelers?

If your trip takes place in winter, you will be able to enjoy another show of Mother Nature free of charge: the Northern Lights.

There are however some day tours and geothermal baths where you will need to buy an entrance ticket. This is the case of Blue Lagoon, well-known among all the tourists. Here the tickets are quite expensive as the cost is from ISK 6.900 - ISK 162.000 depending on the package you choose of course.

To give you some idea on a cost of day tours so you can add it up to your travel expenses list, we will give you the prices of the most popular tours in Iceland:

  • Landmannalaugar day tour from Reykjavik- from ISK 15.400 per person

  • Jokulsarlon boat tour- from ISK 5.800 per person

  • Whale watching tour- from ISK 9.950 per person

The visit in museum would cost you from ISK 500 - ISK 1000 per person.

How to save some money?

There are few rules you should follow in order to help you saving some money during your trip to Iceland.

- The best way of travelling around Iceland is renting an RV and circle the whole island with your own home on four wheels. I would rather not count on public transportation especially if you are planning to see a bit more than Reykjavik city. We do recommend to make your booking way in advance, especially if you are coming to our country in summer, which is a high season. Check for any early bird discounts and avoid leaving this until the last minute and renting the car directly from the airport. Have a look at our tips on how to get the best deals on RV rental. Make sure to review your itinerary in case you need to pay any tolls during your trip.

- A good idea is to make some food supplies i advance. As eating in restaurants can be expensive in Iceland, the best way is to prepare your own meals in your rented campervan. Go shopping in bigger supermarkets like Bonus and Netto where the cost of foodstuffs is much cheaper compared to a typical grocery store. It is worth mentioning here as well about the other stuff you would probably need to buy during your trip like soap, shower gel, gas, etc (consider getting a prepaid gas card). There is a very nice custom in Icelandic campsites, there are some baskets where other tourists can leave the stuff that they do not need anymore so others can make a use of it. If you are lucky enough, you can even find rice and some cans of food.

- Avoid buying water in plastic bottles in a shop. You should instead bring one reusable bottle and fill the bottle with tap water regularly. Tap water in Iceland is perfectly drinkable and very tasty. As you can see there are some costs in Iceland that you can avoid.

- For those who are coming to Iceland for a party- you should rather change your plans. We do recommend exploring the nightlife especially while visiting Reykjavik because we have some really cool bars there. We would rather not recommend though, buying alcohol as this is one of the most expensive things here.

- It’s the same in the case of booking your rental vehicle. If you are planning to stay in the hotels, you should book them in advance when the prices are cheaper.

- If you have a choice, we recommend to travel around Iceland outside of high season. You can then enjoy much cheaper prices of car rentals, hotels and tours.

tourist overlooking the landscape -is Iceland Expensive for Travelers?

Estimating Travel Costs - is Iceland Expensive for Travelers?

The fact that Iceland is an expensive country should not scare you or make you postpone the trip. Even though it might make your budget a bit smaller. Iceland is definitely worth it. Remember that some of the costs can be avoided. Note that in Iceland, credit card payments are accepted almost everywhere and there is no need exchange money and thus you will not lose on the conversion. Regardless of the method of payment you need to be ready for Icelandic prices. Using our tips for saving some money, even an expensive country like Iceland does not have to ruin your budget. We guarantee that you will still be able to enjoy the beauty of the local landscapes.

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