By Gemma Tedaldi | Published: 5th January 2024 | Updated: 14th December 2024
Why is Iceland so expensive? At The Travelling Tedaldi, you may have noticed we like to go on a trip here and a trip there. But in order to visit so many places, we are always mindful of keeping our trips affordable.
That being said we do like the occasional splurge… However Iceland is known for being notoriously expensive, so how do you budget for a trip there?
Well, Iceland isn’t as expensive as you think it is. That’s right I said it, it is not THAT expensive. You just need to know a few tricks that will help keep your overall costs affordable whilst still enjoying your time in Iceland.
Planning Your Trip? Use our favourite travel resources below:
Accommodation: We recommend Booking.com
Rental Car: We recommend Rentalcars.com
Flights: We recommend Kiwi.com
Tours: We recommend Get Your Guide & Viator
Currency Conversion: We recommend Wise
Travel Insurance: World Nomads
Iceland Ring Road Tour – How to spend 7 days exploring Iceland’s ring road and beyond
Is Reykjavík actually worth visiting?
Why Is Iceland So Expensive – Money Saving Tips for Iceland
1. Rent a car
Renting a car or campervan in Iceland is not only cheaper than spending your money on multiple tours but you get the freedom to go where you want, when you want not just where a tour takes you. Be sure to rent a 4×4 if you plan on driving any F-Roads, Highland roads or lots of gravel roads though as most rental companies won’t allow certain vehicles down them unless they are 4×4.
Use Rentalcars.com for getting some of the best deals out there.
2. Accommodation – Stay in hostels
Cheaper accommodation, kitchens to cook your own food in and more often than not, discounts to places in the surrounding area, what’s not to like! Hostels often get a bad name in other countries but Iceland’s HI Hostels are like none we have ever stayed in, they’re more like mini-hotels with quaint homely touches here and there.
There are also 34 HI Hostels around the entire island so you can have your pick of where to stay. Some of the hostels also come with some rather welcome additions such as saunas and naturally heated hot spring tubs.
Check out HI Icelands Hostels here: Hostelworld
The Best North Iceland Itinerary & Top Things to do
The Best East Iceland Itinerary & Top Things to do
3. Explore the free things
So many places in Iceland have free things to enjoy out in nature. Waterfalls, glaciers, hiking, black sand beaches, you name it you can probably do it for free! There are of course multiple things you could and should do with a tour guide like glacier and volcano walks, but we found the majority of things you would want to do as a traveller in Iceland are free.
So get off the beaten track, (which is where most things are charged for anyway, especially along the Golden Circle Route) and explore the natural wonders Iceland has to offer on your own.
4. Eat off the beaten track where the locals do
This is something that should be said for every place that you could visit, not just to keep you on an affordable trip in Iceland, to eat off the beaten track! Don’t go for the first restaurant you find on the main square, don’t go for the one that is full of tourists, go to the one with locals out the door. These places are often the ones with the best food, (and drink), that you can get in the area, and you often get talking to the locals who will tell you of other places to visit or stories from the area as well.
The Best South Iceland Itinerary & Top Things to do
The Best West Iceland Itinerary & Top Things to do
5. Utilise petrol station hot dogs
Now, this may seem like an odd one but bear with us here. Rather than spend out mega-money at a city centre or town centre restaurant when all you want is a quick snack before hitting the road again, why not grab a hotdog (or two) from an N1 petrol station? Then you can fill up both yourself and the car at once, saving time and money, leaving more of your trip to exploring the wonders of Iceland!
6. Travel in the off-seasons
Another rather obvious one, but if you plan to visit Iceland in peak Northern Light season or when the puffins and whales arrive, then you can expect to pay a little more for your accommodation. That’s all well and good if you are planning on seeing said draws, but if you’re not, visit when it’s not so busy. We have visited Iceland both at the beginning of December and the end of April, so have witnessed the winter and spring / first day of summer in Iceland, but due to our timings, we were technically visiting during the off-seasons so it was wonderfully quiet.
Tips for visiting Iceland
It is worth noting that not everything is expensive in Iceland. These things are often free or very reduced in price, proving that Iceland isnt expensive for everything:
📍 Hot Springs – Certain hot springs are actually free to enter, just steer clear of the ones that are all of social media and you will find a free one for sure.
📍 Hot dogs – Some of the cheapest and tastiest food you can find on the road.
📍 Public transport – Where it is located, it is cheap to use.
📍 Visiting waterfalls – All waterfalls in Iceland are free to visit and most are also free to park at.
📍 Viewing the Northern Lights – Unless you go out on a dedicated tour, which will of course cost money, viewing the Northern Lights is totally free.
📍 Hiking – Again, unless hiking on glacier tours, on specific treks through the Highlands of Iceland, hiking is another absolutely free thing to do in Iceland.
Why is Iceland so expensive – How to have an affordable Iceland trip FAQs
Do the costs outweight the benefits of a trip to Iceland?
100% yes, and we would visit Iceland again and again if it weren’t for other locations worldwide that we want to also visit!
Why has Iceland become so expensive?
Iceland has always been a relatively expensive country, along with its Nordic neighbours Norway, Sweden and Finland.
Is it really expensive to go to Iceland?
Iceland is an expensive country to visit, but don’t let that put you off visiting! Just because it is expensive doesn’t mean that it has to be for your trip so long as you budget, and plan in advance, and if you are travelling around the country, cooking your own meals rather than eating out every day.
Why is eating out in Iceland so expensive? How much does a meal cost in Iceland?
Meals in Iceland cost roughly the following;
📍 Cup of coffee – 500 ISK / 3.50 Euros / 3.65 USD
📍 Pint of beer – 1250 ISK / 8.30 Euros / 9 USD
📍 One traditional Icelandic hotdog – 690 ISK / 5 Euros / 5 USD
📍 Fish of the day in a traditional Icelandic restaurant – 3150 ISK / 20 Euros / 22 USD
📍 2 course meal – 6000 ISK / 39 Euros / 41 USD
📍 3 course meal – 9500 ISK / 62 Euros / 66 USD
Is Switzerland or Iceland more expensive?
Switzerland is actually considered to be more expensive than Iceland, so for tourists visiting Iceland just be glad you aren’t in Switzerland!
Affordable Iceland tours
Tours are one of the most affordable ways to see a lot of Iceland without the hassle of having to organise it yourself. Here are some of our top tour picks that we have taken from Reykjavík as day trips:
Conclusion: Why is Iceland so expensive – How to have an affordable Iceland trip
So is Iceland really as expensive as it seems? Not if you plan ahead and travel in the off seasons, but even if it is, Iceland is a once in a lifetime destination you just have to discover. So what are you waiting for, get out and explore the parts of Iceland you never thought you could now you know how to have an affordable trip to Iceland instead of querying why Iceland is so expensive!
All Our Iceland Content
Here are a few other articles you may find useful for planning your trip:
📍 The Perfect 1 Week Iceland Ring Road Itinerary
Gemma Tedaldi
Gemma is the owner and author of The Travelling Tedaldi, a travel blog helping travellers to discover the best road trips and travel itineraries throughout the UK and Europe. When she isn’t writing about her favourite travel destinations, she can often be found out exploring local hikes or planning future trips.