Iceland has always been on our list of dream destinations we wanted to visit, but there were always all sorts of obstacles. Either we couldn't find decently priced plane tickets (at least under 150 euros/person), and when we did find them, the pandemic came; or we heard from other friends that it was a very expensive destination and that we needed a very large budget (large is such a relative term) to enjoy the beauties of the country.
And we knew – as you probably know – that Iceland is one of the most expensive countries in Europe, and when we started planning our trip, we tried to look for affordable flight options and save money where possible, without altering the entire experience in any way.
Before we go any further, I invite you to read about the things you need to know before going on vacation to Iceland.
Iceland – travel costs – Currency
The official currency of Iceland is the Icelandic krona. Iceland, like the other Nordic countries, is an almost cashless society. In every place we have been, we have had the opportunity to pay by card, and very often this was the only option.
We avoid paying by card outside the country, because of the fees we have, but if you have 0 fees when paying by card, do not rush to withdraw too much money from the ATM.
In the airport, on the ground floor, there are two ATMs where you can withdraw Icelandic krona. It is good to know that there is a fee that you have to pay for each cash withdrawal and that it varies depending on the amount you want to withdraw (the more money you want to withdraw, the higher the fee). We withdrew 30,000 ISK, and the fee was 800 ISK.
Conversion: 1000 ISK = 6.80 EURO
Iceland – travel costs – How to get to Iceland cheaply and easily?
As I said, we tried to keep our budget under control, saving where possible, without ruining our vacation or giving up on certain desires. That's why the first thing we considered was transportation.
I knew that Wizz Air had a few direct flights to Reykjavik, so for a year I periodically followed the prices, and when the opportunity arose, I bought the tickets.
Wizz Air has direct flights to Reykjavik from several cities in Europe, including: Milan Malpensa, Rome, Naples, Vienna, Budapest, Dortmund and London.
By chance, we found two super cheap plane tickets, on the Dortmund-Reykjavik route, at the beginning of August (which was perfect, because August is also the best month of the year to explore Iceland). Round-trip tickets cost us 90 euros/2 people (45 euros/round-trip/person). We were lucky to find the tickets at such a price 😀
There are many cheap flights from London or Milan (there used to be even to Dortmund). Milan Malpensa has around 3 flights a week to Reykjavik, operated by Wizz Air, and there are even more flights from London (last year EasyJet had direct flights London – Reykjavik, at 10 euros/flight segment).
From my point of view, the best option for your pocket is to make a stopover in London or Milan, and from there to leave for Iceland. However, you have to keep an eye on the prices and take advantage of the offers when they appear (for example, for May 2022, I found tickets London – Reykavik -London, from 70 GBP/person).
The best time to visit Iceland – financially
Iceland has a peak period when prices explode. The months of June-August are the busiest months, the most suitable for exploring the island and also the most expensive.
During this period, the prices for accommodation and transport (plane and rental car) are at least 40% higher, compared to September, for example. We felt these differences firsthand. Last year, we had a trip planned for the second half of September and I remember that for renting a car I paid 160 euros/5 days.
In contrast, this year I needed a car for the beginning of February, and the same car that I booked last year would have cost us 600 euros/5 days.
Iceland – Travel Costs – Transportation on the Island
One of the things you need to know when planning your vacation in Iceland is that you need a car. Period. In Iceland, public transportation is not that well-established, and if you want to explore the island (and you definitely want to) you need a car.
Ideally, you should plan your vacation a few months in advance and book your car as early as possible. Unfortunately, Iceland is not the kind of place to go last minute, because, contrary to what you might expect, hotels and rental companies have incredibly high prices for last minute.
For example, the same car that cost 600 euros/5 days, would have cost 1800 euros/5 days with a last minute reservation (about a week in advance). I really wanted to call Rental Cars and let them know that we don't want to buy a car, we just want to rent it.
Our initial plan was to rent a small car, but when we saw the prices, we took a step back and re-analyzed the situation. It seemed like a lot to pay 600 euros for a car to take us from point A to point B (imagine our reaction when we saw the price of 1800 euros), but we knew that there were not many other alternatives.
Later we had the (brilliant) idea to rent a camper – the lifeline for our budget – which ended up costing us much less than the car we wanted to rent (we'll talk about it soon).
We had never experienced traveling by camper before, with all that it entails (driving, sleeping in a campsite, etc.). But we were pushed from behind by circumstances, and after much calculation we realized that this was the best option both for our budget and for the entire trip.
After all, the fact that we slept in a camper, in the middle of nature, made our vacation truly special. So, a month before, we started scouring the internet in search of a serious rental company that would offer us a small camper, somewhat equipped and affordable.
We immediately found the people from Happy Campers, a family business, we talked to them a bit about what we wanted to do, and in the next second we rented a Happy Camper EX 1 (THE SMALLEST CAMPER THEY HAVE), ideal for two people and for short periods of time.
The camper saved our budget because we didn't have to pay for hotel nights, but only for camping sites, which were substantially cheaper. In addition, the car also had low fuel consumption (so low that it's almost hard to believe).
Costs:
- Happy Camper EX 1 /5 days + "bundle" insurance – 400 euros
- Camping sites – 3 nights – approx. 50 euros/2 people
- Gasoline for approx. 1100 km – approx. 120-135 euros (we consumed approx. 80-90 l)
Places where we camped
- Vik Campingsite (in Vik) – 1750 isk/person
- Mosfellsbær Campingsite (16 minutes away from the capital) – 1200 isk/person
As for transportation, you can also consider hitchhiking. We didn't consider this option because it's not our style and we didn't have time. Plus, we wanted to have a bit of comfort, flexibility, and, most importantly, independence.
Accommodation in Iceland is very expensive. Last year, we struggled to find accommodation and had a hard time finding something that was within our budget and had minimal amenities (i.e. a private bathroom).
After booking the camper, we didn’t have to worry about accommodation anymore, and luckily for us, the hotel in Reykjavik that we couldn’t get to last year offered us a voucher that we could use this year.
And we got a really good deal! Last year, we paid 80 euros for a hotel room, and this year, the same hotel room would have cost us 270 euros/night (as I said about exploding prices). Luckily, the voucher covered one night of accommodation and we didn’t have to pay the difference.
Is the hotel worth 270 euros/night? No, it’s definitely not worth that much money! The hotel is indeed 4 stars, we had the spa included in the price, it was clean and we had peace, but I don't think it's worth this price.
A night at a hostel, in a room with 8-12 beds, costs between 30-50 euros/night/adult. It's quite a high price (given that you share the room with other foreigners), compared to what you can get for this money in other European countries, but it's the cheapest accommodation option.
Iceland – Travel Costs – Restaurants and Shopping
The truth is that we didn’t eat much in restaurants, except for Hard Rock. We bought one or two at the supermarket, and when we got hungry, we would stop at a gas station to eat hot dogs or fish and chips. We didn’t eat at fancy restaurants, and maybe that’s why we weren’t really impressed with Icelandic cuisine.
I found the food quite expensive, both at gas stations and in the supermarket. In general, at gas stations, a simple hot dog costs 500 isk, and a portion of fish and chips costs 2000 isk, with a drink included. At restaurants in the port, for example, the lunch deal of the day costs 4000-4500 isk, and a main course costs between 4000 and 6000 isk.
We spent an average of about 40-50 euros/day/2 people just for food and drinks, but we don't usually eat 3 meals a day. Since we spent most of our time in the car, we always had some snacks on hand that we bought from Bonus (Bonus is a chain of supermarkets spread all over the island), and we usually had only one meal, in the evening, wherever we could. Luckily, gas stations also have a small restaurant next to them :))
Some estimated costs:
- a Hot Dog at Bæjarins beztu (best hot dog in town), in Reykjavik costs 550 isk.
- a meal for two at Hard Rock Cafe cost us 52 euros
- fish soup at Reykjavik101 cost us 1850 isk
- a 0.5l bottle of Coca Cola costs between 350 and 500 isk (you have to choose the store carefully, especially in the capital. Stores 10-11 are to be avoided)
- menu of the day (for lunch) – soup+main course+dessert = approx. 4000 ISK
I don't usually drink tap water, but I tried it in Iceland and it was actually ok. Plus, Iceland is said to have the purest water in the world, so it can't hurt. Given that a 0.5 liter bottle of water costs between 100 and 150 isk, you can save a pretty penny just by drinking tap water.
Even if you don't have a camper where you can cook, you can save a few pennies by buying food from the supermarket. In the morning you can eat Icelandic Skyr yogurt (it's a different yogurt from ours, very thick and creamy) for 170-250 isk (200 g) or cereal (on average, a box of cereal costs 800 isk).
When it comes to shopping, there's not much to say. I would even say that shopping in Iceland is to be avoided if you want to travel on a medium to low budget. We bought some souvenirs for our loved ones and some licorice chocolate for ourselves.
There are a lot of souvenir shops in the capital, selling everything: socks, hats, fur coats, fridge magnets, mugs, etc. Fridge magnets cost 400 – 900 isk/piece, and for wool socks I saw a promotion of 3 for the price of 2, where a single pair costs 1700 isk.
However, if you want to do more shopping, it is good to know that some stores offer you a 16% discount on the spot (the equivalent of VAT in Iceland) on purchases over 6000 isk.
On the other hand, at the airport I saw a lot of people filling out VAT refund forms, but I don't know if it applies to every expense (many people had dozens of receipts in front of them and were filling out the forms in a hurry).
We didn't keep the receipts, so we couldn't do anything about it. But I think it is worth doing a little research, to see under what conditions the VAT is refunded.
Tourist attractions and activities
From thermal baths, to sea trips and hiking on the largest glacier in Europe, Iceland offers everything a nature lover and outdoor enthusiast could want. We are not an example in this direction, but we enjoyed the landscapes immensely, which, to be honest, left us speechless.
In terms of activities, we chose to go to the Blue Lagoon and enjoy nature. We know that from Reykjavik you can do a lot of sea trips (whale watching) and puffin colonies, but we chose to skip these trips. Instead, we went to the Blue Lagoon, and the experience, although quite expensive, was fantastic!
The entrance to the Blue Lagoon is very expensive, but I think it is an experience worth saving a few pennies for.
Iceland on a Budget (9) – If you want to bathe in a hot spring without breaking the bank, you can look elsewhere. The good news is that Iceland is full of geothermal springs.
Entrance to the Blue Lagoon
The Blue Lagoon is undoubtedly the most famous tourist attraction in Iceland, and is the perfect way to start or end a vacation there. This spa – because the Blue Lagoon is actually a huge spa – is one of the 25 best in the world, by National Geographic, and due to its popularity and advertising, it is also an extremely expensive, touristy and crowded place.
Therefore, if you dream of a bath in the warm, mineral-rich waters of the lagoon, you should know that you need to make a reservation.
Visitors have a choice of two packages:
- Comfort: priced from 6990 isk – the package includes: entrance to the Blue Lagoon, a silicon face mask, towel and a drink of your choice from the Water Bar
- Premium: priced from 8990 isk – entrance to the Blue Lagoon, a silicon face mask, another face mask of your choice, towel, bathrobe and two drinks of your choice from the Water Bar
Important: It is best to book your Blue Lagoon ticket as far in advance as possible. We weren't so sure we would make it to Iceland (after two cancelled vacations) and chose to buy our tickets the day before. For that day, the comfort package cost us 8000 isk. Also, prices vary from hour to hour and from day to day.
Another popular activity during the summer months is a trip to the puffin colonies. The puffins retreat to the coastal areas of Iceland every summer. During this period, many excursions to the puffin areas are organized, and prices for these tours start from 50 euros/person.
Iceland – travel costs + tips for a small budget
Iceland is not a cheap country at all, and when you see that some travel agents, who enjoy a lot of promotion online, sell an 8-day trip to Iceland for 3550 euros/person, you wonder if it is possible that it is so expensive that a couple's vacation costs you at least 7100 euros (price that does not include meals and shopping).
Well, I was in Iceland, I stayed 4 nights and 5 days, I visited everything that could be visited during this time, and the entire trip, with all expenses included, cost us around 1000 – 1100 euros/2 people. It is true that we did not only have 4-star accommodations, but million-star ones (we only slept in nature), but we cannot say that we sacrificed any moment or any desire.
We wanted to go to the Blue Lagoon – the most expensive activity we've ever done, we visited all the places on our list and enjoyed a bit of disconnection (without internet and social media). In Iceland we traveled a little differently, as the environment also imposed on us, and I can honestly say that it was one of the coolest experiences I've ever had (along with Cuba, New York and Singapore).
And if I had to put Iceland in a top of the most expensive countries I've been to, I think I'd put it in 3rd position, after Norway and Switzerland.
I hope my article helped you get an idea of the travel budget for Iceland and that it inspired and gave you courage to visit this natural wonder.
Finally, I want to tell you that this was our travel budget and that depending on the time of year you go, what you want to do or the style in which you plan your trips, it can be higher or even lower. I wanted to give you some guidelines based on my own experience.