The Cost Of Traveling In Iceland (and How To Save)

Introduction

When it comes to breathtaking landscapes, rich cultural heritage, and unique natural wonders, Iceland stands out as a top travel destination. However, one aspect that often gives potential travelers pause is the cost of visiting this Nordic island. From accommodation and transportation to food and activities, expenses can add up quickly in Iceland. But fear not! With proper planning and savvy budgeting, it is possible to explore Iceland without breaking the bank.

While it’s true that Iceland can be an expensive destination, it’s important to remember that the experiences and memories gained are well worth the expenditure. By understanding the cost factors and implementing cost-saving strategies, you can make the most of your Icelandic adventure.

In this article, we will provide you with a comprehensive guide to the cost of traveling in Iceland and offer insights on how to save money along the way. From affordable accommodation options to budget-friendly dining choices, we’ll cover all the essential aspects, ensuring that you can make informed decisions and keep your travel expenses under control.

So, let’s dive in and discover how to make your Icelandic dream a reality, without breaking the bank!

The High Cost of Accommodation

One of the most significant expenses you’ll encounter when traveling in Iceland is accommodation. The country’s limited number of hotels and hostels, combined with its booming tourism industry, has driven up the prices of lodging. Hotels and guesthouses in popular tourist areas can be particularly expensive, especially during the peak summer season.

On average, you can expect to spend around $150 per night for a standard hotel room in Reykjavik, Iceland’s capital city. Prices in more remote areas or luxury accommodations can be even higher. If you’re traveling on a tight budget, these prices can quickly eat into your overall travel expenses.

Another factor to consider is that Iceland’s accommodation options can fill up quickly, so booking well in advance is crucial, especially if you’re traveling during the peak season. Waiting until the last minute may limit your choices and result in higher prices.

However, keep in mind that the high cost of accommodation doesn’t have to deter you from visiting Iceland. With some planning and research, there are budget-friendly options available. Consider staying in guesthouses or hostels, which generally offer lower prices compared to hotels. These accommodations often provide communal spaces where you can meet fellow travelers, further enhancing your Icelandic experience.

An increasingly popular alternative is booking accommodations through platforms like Airbnb or other vacation rental websites. This can give you the option to rent apartments or houses, which can be more cost-effective, especially for families or groups. Be sure to read reviews, check the location, and communicate with hosts to ensure a smooth booking process and a comfortable stay.

Lastly, if you’re an outdoor enthusiast, consider camping during your trip. Iceland has numerous campgrounds with excellent facilities and stunning views. Camping not only saves money but also immerses you in Iceland’s natural beauty. Just make sure to pack appropriate camping gear and check campground availability in advance.

By exploring these alternative accommodation options, you can find more affordable places to stay during your time in Iceland, allowing you to allocate your travel budget to other memorable experiences and activities.

Budget-friendly Accommodation Options

While accommodation in Iceland can be expensive, there are several budget-friendly options to consider that can help you save money during your trip.

Hostels are a popular choice among budget travelers. They offer affordable dormitory-style rooms with shared facilities, such as bathrooms and kitchens. Not only are hostels more cost-effective, but they also provide opportunities to meet like-minded travelers and exchange tips and stories.

Guesthouses are another excellent option for budget-conscious travelers. These establishments typically offer private rooms with shared or private bathrooms. Guesthouses often have communal areas like lounges or kitchens, providing a comfortable environment to relax and connect with other guests.

If you prefer a more local experience, consider staying in a farmhouse or a guesthouse located in the countryside. These accommodations often have fewer amenities than city hotels but offer a rustic charm and an opportunity to immerse yourself in Iceland’s serene natural beauty. Farm stays may also provide the chance to participate in traditional activities, such as working with animals or learning about local farming practices.

For a unique and affordable experience, you can also consider renting a camping pod. These small, cozy cabins are located in various campsites throughout Iceland and provide basic accommodation with beds, heating, and sometimes even small kitchens. Camping pods offer a comfortable camping experience without the need to bring your own tent.

Finally, if you’re traveling with a group or prefer more privacy, renting an apartment or a vacation home can be a budget-friendly option. Websites like Airbnb and Vrbo offer a wide range of private accommodations, allowing you to cook your meals and have a home-like experience while exploring Iceland.

It’s important to note that regardless of the accommodation option you choose, it’s vital to book early, especially during the peak travel season. This way, you’ll have more choices and potentially better rates.

By opting for budget-friendly accommodation options, you can significantly reduce your overall travel expenses and allocate your savings toward other aspects of your Icelandic adventure, such as activities or dining.

Transportation Expenses

Getting around Iceland can be a significant expense, but by planning ahead and choosing the right transportation options, you can keep your transportation costs manageable.

If you’re flying into Iceland, the first decision you’ll need to make is how to get from Keflavik International Airport to your accommodation. The most convenient option is taking a taxi or using a shuttle service, but these can be quite expensive. A more budget-friendly alternative is using the public bus service, which offers regular transfers between the airport and popular destinations in Reykjavik and other parts of the country.

Once you’re settled in, there are several transportation options to consider for exploring Iceland. Renting a car is a popular choice, as it allows for flexibility and the ability to visit off-the-beaten-path locations. However, keep in mind that rental costs can be high, especially during the peak season. It’s recommended to book your car rental in advance to secure the best rates.

If renting a car isn’t within your budget, don’t worry—there are other ways to navigate Iceland. The public bus system, operated by Strætó, provides transportation between towns and popular tourist destinations. This can be a cost-effective option, but it requires careful planning, as schedules may be limited, especially in more remote areas.

An alternative mode of transportation is traveling by scheduled or guided tours. Many companies offer various day tours or multi-day excursions that cover popular attractions and provide transportation. While these tours can be more expensive than independent travel, they take care of transportation logistics and often include knowledgeable guides who can enhance your experience.

If you’re planning to explore Reykjavik, the capital city offers a reliable and efficient public bus system. The city center is also easily walkable, allowing you to save on transportation costs while discovering its charm.

Lastly, if you’re planning to visit more remote areas or venture into Iceland’s highlands, renting a 4×4 vehicle may be necessary. Keep in mind that driving off-road is strictly prohibited and can result in significant fines, as well as damage to the sensitive Icelandic environment.

Regardless of the transportation option you choose, it’s essential to factor in fuel costs, parking fees, and any applicable tolls. By considering your transportation needs and budgeting accordingly, you can keep transportation expenses in check while exploring the stunning landscapes of Iceland.

Saving Money on Transportation

While transportation expenses in Iceland can add up, there are several strategies you can employ to save money and make your travel budget stretch further.

Firstly, if you plan on renting a car, make sure to research and compare prices from different rental companies. Prices can vary significantly, so taking the time to find the best deal can result in substantial savings. Additionally, consider renting a car from a location outside the airport. Rental agencies located in the city often offer lower rates due to lower overhead costs.

Another way to save money on transportation is by booking shared rides or carpooling services. Several shuttle companies operate in popular tourist areas, offering shared transfers to and from attractions, reducing costs compared to private taxis. Additionally, some tour companies may provide transportation as part of their tour packages.

If you’re planning to rely on public transportation, consider purchasing multi-day or multi-ride passes. These passes can provide discounts on bus fares, making it more affordable to explore different parts of Iceland over several days.

Timing is also crucial when it comes to saving money on transportation. If you have flexibility in your travel dates, consider visiting Iceland during the shoulder seasons (late spring or early fall) when prices for flights, car rentals, and tours are generally lower compared to the peak summer season.

When it comes to exploring Reykjavik, take advantage of the city’s walkability. Many of the main attractions, restaurants, and shops are within walking distance of each other, eliminating the need for transportation costs within the city center. Additionally, consider renting a bike to explore the city on two wheels, and take advantage of bike paths and cycling-friendly infrastructure.

Lastly, don’t forget to leverage the power of local knowledge. Talk to the locals, ask for advice, and inquire about any special offers or discounts available for transportation. They might provide valuable insights and tips on how to save money while getting around Iceland.

By employing these strategies and being mindful of your transportation choices, you can significantly reduce your transportation expenses, leaving more money in your pocket for other memorable experiences during your Icelandic adventure.

Food and Dining Costs

Food and dining expenses can quickly add up while traveling in Iceland. The cost of ingredients and dining out in restaurants can be higher compared to many other countries. However, by being strategic and exploring various dining options, you can manage your food expenses without sacrificing the opportunity to enjoy Iceland’s culinary delights.

One way to save money on food is by self-catering. If you’re staying in accommodations with kitchen facilities, consider preparing some of your meals yourself. Visit local grocery stores or supermarkets to purchase ingredients and cook your own meals. Not only does this save money, but it also allows you to experience local flavors through the cuisine you create.

Take advantage of Iceland’s abundance of fresh and local produce, such as fish, lamb, and root vegetables. Visit local farmers’ markets, known as “Bónus” or “Krónan,” to find reasonably priced ingredients. Stocking up on snacks, fruits, and drinks from supermarkets can also save you money on-the-go.

When dining out, consider opting for more budget-friendly options. Look for food trucks, small local eateries, and cafes, which often offer more affordable prices compared to upscale restaurants. Icelandic cuisine focuses on simple, hearty dishes, like seafood soup, lamb stew, and hot dogs, which can be found at affordable prices in various establishments.

Another way to save money on dining is by taking advantage of lunch specials or early bird menus offered by restaurants. Many establishments provide discounted prices during specific hours, allowing you to enjoy a delicious meal at a more affordable price.

It’s also worth noting that tap water in Iceland is of excellent quality and safe to drink. Instead of purchasing bottled water, fill your reusable water bottle from the tap to stay hydrated while exploring the country.

Lastly, avoiding excessive alcohol consumption can significantly reduce your dining expenses. Alcoholic beverages are generally expensive in Iceland, so consider limiting your consumption or enjoying a few drinks in a more affordable setting, such as your accommodation or a local bar.

Remember, tasting local cuisine and experiencing the food culture is an essential part of any travel experience. By implementing these tips and being mindful of your dining choices, you can enjoy Icelandic delicacies while keeping your food expenses within your budget.

Tips for Saving on Food and Dining

Traveling to Iceland doesn’t mean you have to break the bank on food and dining. With some smart planning and aware choices, you can enjoy delicious meals while saving money. Here are some tips to help you save on food and dining expenses during your trip:

• 1. Cook your own meals: If you have access to kitchen facilities in your accommodation, take advantage of them. Buying groceries and cooking your meals can be significantly cheaper than eating out for every meal. Visit local supermarkets or farmers’ markets to stock up on ingredients and experience the joy of preparing your own Icelandic-inspired dishes.
• 2. Explore budget-friendly eateries: Look for food trucks, local cafes, and small eateries that offer affordable options. These establishments often serve delicious meals at reasonable prices, giving you a chance to try local flavors without draining your wallet.
• 3. Take advantage of lunch specials and early bird menus: Many restaurants in Iceland offer discounted prices during specific hours, such as lunchtime or early evening. Take advantage of these deals to enjoy a satisfying meal at a lower cost.
• 4. Pack your own snacks: Carry snacks with you while exploring Iceland to avoid costly impulse purchases. Stock up on granola bars, fruit, and other non-perishable snack items from supermarkets before heading out for the day.
• 5. Stay hydrated with tap water: Iceland has excellent tap water, so bring a reusable water bottle and refill it from the tap. This will save you from buying expensive bottled water and help reduce unnecessary waste.
• 6. Share meals or opt for smaller portions: Icelandic portion sizes can be quite generous. Consider sharing meals with travel companions or opting for smaller portions. Not only will this save you money, but it will also give you the opportunity to try more variety.
• 7. Avoid excessive alcohol consumption: Alcoholic beverages can be quite expensive in restaurants and bars. Set a budget for alcohol consumption or consider enjoying a drink or two in a more affordable setting, such as your accommodation or local bars.
• 8. Take advantage of free breakfast or included meals: If your accommodation offers complimentary breakfast or meals, make sure to take advantage of them. Start your day with a filling breakfast that can keep you energized and satisfied while exploring.
• 9. Research affordable dining options in advance: Before your trip, do some research to find affordable dining options in the areas you’ll be visiting. Look for local recommendations, read reviews, and check menus to ensure you find places that fit your budget.
• 10. Embrace the local food culture: To truly experience Iceland’s food culture, embrace the affordable and traditional dishes. Embrace local favorites like hot dogs, fish and chips, or traditional Icelandic soups and stews. These options are not only tasty but also budget-friendly.

By implementing these tips, you can enjoy flavorful Icelandic cuisine and save money on food and dining expenses, allowing you to make the most of your travel budget and experience all that Iceland has to offer.

Activities and Tourist Attractions Costs

Exploring Iceland’s breathtaking landscapes and engaging in exciting activities is a highlight of any trip to this unique destination. However, it’s essential to budget for the costs of activities and attractions to ensure a well-rounded experience without breaking the bank.

Visiting popular tourist attractions in Iceland often requires an entrance fee. These fees can add up, especially if you plan to visit multiple attractions. It’s important to prioritize the sites you most want to see and allocate your budget accordingly. Research the entrance fees in advance and create a list of must-visit attractions to help you plan your expenses.

Another aspect to consider is guided tours and activities. While these can provide valuable insights and enhance your experience, they often come with a price tag. Carefully evaluate the activities you’re interested in and compare prices from different tour operators. Look for discounts or package deals that combine multiple activities, as this can help you save money.

Keep an eye out for any free or low-cost activities that align with your interests. For example, exploring the stunning natural landscapes or taking a hike in Iceland’s national parks often comes at no cost. Research local events, festivals, or cultural performances that may offer free or inexpensive entertainment options during your stay.

Iceland is known for its stunning waterfalls, geothermal pools, and hiking trails. Many of these natural wonders offer unique experiences at no cost. Research the areas you plan to visit and take advantage of the opportunity to explore Iceland’s natural beauty without incurring additional expenses

It’s also worth considering purchasing a tourist pass like the Reykjavik City Card. This pass provides free or discounted entry to various museums, attractions, and public transportation within a specified period. Evaluate your itinerary and see if the benefits of a tourist pass align with your planned activities to determine if it’s a cost-saving option for you.

Lastly, don’t forget to factor in any additional costs associated with activities, such as equipment rentals or transportation to and from the activity site. These expenses can quickly add up, so be sure to incorporate them into your budgeting process.

By researching and planning your activities in advance, prioritizing your must-see attractions, taking advantage of free or low-cost activities, and comparing prices for guided tours, you can manage your expenses while still enjoying the incredible experiences Iceland has to offer.

Saving Money on Activities and Tourist Attractions

Exploring the unique activities and tourist attractions in Iceland doesn’t have to drain your travel budget. With some strategic planning and money-saving tips, you can enjoy memorable experiences without breaking the bank. Here are some tips to help you save money on activities and tourist attractions:

• 1. Prioritize your must-see attractions: Create a list of the top attractions you want to visit and prioritize them based on your interests. This way, you can focus your budget on the activities that matter most to you.
• 2. Take advantage of free or low-cost activities: Iceland offers numerous natural wonders and outdoor activities that are free of charge. Go hiking in national parks, explore geothermal areas, admire waterfalls, or take a stroll along the beautiful coastline. These activities allow you to experience Iceland’s natural beauty without spending a fortune.
• 3. Research discount packages and combo deals: Many tour operators and attractions offer discounted package deals that combine multiple activities. Look for these combo deals to save money while experiencing a variety of attractions.
• 4. Look for discounts and coupons: Before booking any activities or attractions, search for discounts or coupons online. Check official tourism websites, social media platforms, and coupon websites for any special offers or promo codes that can help you save money.
• 5. Consider independent exploration: Instead of taking guided tours for every activity, consider exploring some attractions on your own. Renting a car or using public transportation can give you the flexibility to visit sights independently, saving you the cost of a guided tour.
• 6. Timing is key: Consider visiting attractions during off-peak hours or the shoulder season when prices may be lower. Many popular attractions can be crowded during peak hours, so going early or late in the day can not only save you money but also offer a more serene experience.
• 7. Utilize tourist passes: Investigate whether tourist passes, such as the Reykjavik City Card or regional travel cards, offer benefits for the attractions you plan to visit. These passes often provide discounted or free entry to attractions, as well as public transportation, making them a cost-effective option.
• 8. Seek local advice: Consult with locals or tourism offices for insider tips on free or lesser-known attractions. Locals can share hidden gems and off-the-beaten-path experiences that may not cost a dime.
• 9. Bring your own gear: If you plan on participating in outdoor activities like hiking or camping, bring your gear instead of renting. This can save you money on rental fees and allow you to use equipment you’re already comfortable with.
• 10. Be selective with paid tours: While guided tours can offer valuable insights, not every activity requires a guided experience. Choose paid tours that provide unique access or expert knowledge that you couldn’t otherwise experience on your own.

By implementing these tips, you can enjoy the incredible activities and tourist attractions Iceland has to offer while keeping your expenses under control. Remember, it’s all about prioritizing, researching, and finding the right balance that fits your budget and travel preferences.

Miscellaneous Expenses

When planning a trip to Iceland, it’s important to factor in miscellaneous expenses, which can include a variety of costs that may arise during your travels. By considering these expenses and budgeting accordingly, you can better manage your overall travel budget. Here are some common miscellaneous expenses to keep in mind:

1. Souvenirs: It’s natural to want to bring home mementos from your trip to Iceland. However, souvenirs can add up quickly and impact your budget. Determine how much you’re willing to spend on souvenirs and consider purchasing authentic local products or handmade crafts that truly reflect the Icelandic culture.

2. Communication: Staying connected while traveling is essential for many people. Whether it’s purchasing a local SIM card, activating an international data plan, or using public Wi-Fi, consider the costs associated with communication and budget accordingly.

3. Tips and gratuities: While not mandatory in Iceland, it’s customary to tip for exceptional service. Keep in mind that gratuities can add up, especially if you’re dining out frequently or using services like guided tours or taxis. Consider budgeting a percentage of your expenses to account for tipping.

4. Travel insurance: It’s highly recommended to have travel insurance that covers medical emergencies, trip cancellations, or delays. While this expense may not be directly incurred during your trip, it’s important to include it in your overall travel budget to ensure you’re adequately protected.

5. ATM and banking fees: If you plan on withdrawing cash or using your credit/debit card while in Iceland, be aware of any fees associated with foreign transactions. Consider using ATMs that don’t charge withdrawal fees or inform your bank of your travel plans to avoid any card issues or unexpected charges.

6. Parking fees: If you’re renting a car and exploring Iceland’s attractions, parking fees may be applicable, especially in popular tourist areas. Keep in mind that parking fees can vary, so be prepared to budget for these costs.

7. Medical expenses: While healthcare in Iceland is generally excellent, it’s important to budget for any unexpected medical expenses that may occur during your trip. Carry any necessary medications and ensure you have adequate travel insurance coverage for medical emergencies.

8. Postage and shipping: If you plan on sending postcards or shipping any items back home, consider the costs associated with postage and shipping fees. Prices can vary based on the weight and destination, so budget accordingly if these services are needed.

9. Entry taxes and fees: Some attractions or natural reserves may charge entry taxes or fees separately from the admission fees. Research in advance to determine if there are any additional charges and include them in your budget.

10. Unexpected expenses: Always have a contingency fund set aside for unexpected expenses that may arise during your trip. It’s impossible to predict every expense that may occur, so having a buffer can provide peace of mind.

By considering these miscellaneous expenses and budgeting accordingly, you can ensure that you’re financially prepared for your trip to Iceland. This way, you can fully immerse yourself in the experience without any unnecessary financial stress.

How to Save Money on Miscellaneous Expenses

When it comes to managing miscellaneous expenses during your trip to Iceland, there are several strategies you can employ to help save money and stay within your budget. By being mindful and proactive, you can make the most of your funds. Here are some tips on how to save money on miscellaneous expenses:

• 1. Set a budget: Start by creating a comprehensive travel budget that includes all potential miscellaneous expenses. This will help you have a clear understanding of how much you can allocate to each category and make informed decisions during your trip.
• 2. Research and compare prices: Before making any purchases or booking activities, research and compare prices from different vendors. Whether it’s souvenirs, communication services, or travel insurance, take the time to find the best deals and opt for cost-effective options.
• 3. Shop strategically for souvenirs: Souvenirs can be expensive, but there are ways to save money. Consider shopping at local markets or smaller shops rather than touristy areas, as prices tend to be lower. Look for unique and locally made products that offer better value for your money.
• 4. Opt for free or low-cost communication options: Instead of relying solely on expensive international data plans, take advantage of free Wi-Fi available at restaurants, cafes, and accommodations. Use messaging apps to stay in touch with family and friends without incurring additional communication charges.
• 5. Be mindful of tipping customs: While it’s customary to tip for exceptional service in Iceland, it’s not obligatory. Assess the quality of service before deciding to tip. If you do choose to tip, round up the bill or leave a small percentage rather than a large sum to help manage expenses.
• 6. Use no-fee ATMs and travel-friendly banking options: Research banks and ATMs that don’t charge foreign transaction fees or high ATM withdrawal fees. Consider opening a travel-friendly bank account or using a travel money card designed for international use to minimize banking fees.
• 7. Seek out free or discounted activities: Look for free or low-cost activities to enjoy during your trip. Take advantage of free walking tours, explore public parks and gardens, or engage in self-guided city walks. Check local event calendars for free concerts, festivals, or cultural performances.
• 8. Plan and prepare for medical expenses: Bring any necessary medications from home to avoid inflated prices in Iceland. Familiarize yourself with the healthcare system and emergency services to ensure you’re aware of any potential medical expenses. Confirm your travel insurance covers medical emergencies to minimize unexpected costs.
• 9. Minimize shipping and postage fees: Instead of purchasing and shipping bulky souvenirs, consider opting for smaller, lightweight items or digital mementos. Send postcards from local post offices rather than expensive tourist shops to save on postage costs.
• 10. Stay within entry taxes and fees: Research entrance fees and taxes for attractions and plan accordingly. Look for bundled entry tickets or passes that provide access to multiple attractions, as they can offer cost savings. Be mindful of any additional fees that may be applicable for certain activities.

By implementing these strategies, you can effectively save money on miscellaneous expenses throughout your trip to Iceland. Remember to be mindful of your spending, plan ahead, and allocate your budget wisely to make the most of your Icelandic adventure. 

Conclusion

Traveling to Iceland may come with its share of expenses, but with careful planning and smart decisions, it is possible to enjoy this remarkable destination without breaking the bank. By considering the high cost of accommodation, transportation, food, activities, and miscellaneous expenses, you can budget effectively and make the most of your travel funds.

When it comes to accommodations, choose budget-friendly options like hostels, guesthouses, or vacation rentals. Book in advance to secure the best rates and consider camping for a more affordable and immersive experience in Iceland’s stunning outdoors.

Transportation expenses can be mitigated by comparing rental car options, utilizing public transportation, and taking advantage of shared rides or shuttle services. Plan your itinerary carefully and leverage seasonal discounts if possible.

To save on food and dining, self-catering is a cost-effective option, utilizing local supermarkets and farmers’ markets. Explore affordable eateries, take advantage of lunch specials, and embrace the local food culture to savor Icelandic cuisine without overspending.

When it comes to activities and tourist attractions, prioritize your must-see sites, research discounts, and consider free or low-cost options like exploring Iceland’s natural wonders or participating in self-guided activities. Utilize tourist passes and look for package deals that offer multiple experiences at a discounted price.

Don’t forget to account for miscellaneous expenses like souvenirs, communication, tips, travel insurance, and unforeseen costs. Setting a budget, researching prices, and being strategic can help save money on these extras, allowing you to better manage your overall travel expenses.

In conclusion, Iceland is a captivating destination that offers unique experiences and stunning landscapes. By planning ahead, making informed choices, and being mindful of your spending, you can maximize your budget and create unforgettable memories in this extraordinary country. So go forth, explore Iceland, and make the most of every krona!