Iceland has a reputation for being an expensive place to visit and there’s some truth to that statement. However, the value of the Icelandic króna collapsed beginning in 2008 and the U.S. dollar strengthened in 2015 and 2016, making Iceland more affordable for travelers.
The real question is: did costs fall enough to make Iceland affordable or is Iceland expensive still?
Iceland Flights: Is Iceland Expensive to Get To?
With the introduction of low cost flights on WOW Air, flights to Iceland are now very affordable from hubs like Boston, Baltimore, Los Angeles, and San Francisco.
>>>>> Related Post: My Review on WOW air (opens in new window)
To save more, Iceland is one of those destinations where package deals provide great discounts. Bundle your airfare and hotels through IcelandAir and you’ll frequently receive free extras like airport transfers, tours, and breakfasts. My package saved us about $300 compared to buying everything separately.
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.
In other words, putting up with the cold will save you half the cost, but comes with obvious trade-offs.
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?
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.
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
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.
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!
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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