Travel Iceland on a Budget
Iceland is an expensive country, that’s a fact BUT there are budget friendly ways to go about visiting. Let me guide you through...
When traveling to a new country many like to make an estimated budget and for a country like Iceland, it is recommended. But how much are things in Iceland?
As one of the most unique and remote travel destinations, Iceland is known not only for its spectacular views, but also for taking a top spot in the list of expensive countries. Iceland is a small country with a short harvest season, and as a result, it relies a lot on imported products. But even if some price tags are bigger, it doesn’t mean you should avoid Iceland! There are many ways to budget and make sure you get a good value for your hard-earned bucks!
Traveling to Iceland doesn’t have to cost a fortune as long as you take some time to check out the general information about prices and look for bargains. Or, to ease your worries, simply book an all-inclusive tour. In fact, compared to 2021, most prices for accommodation have visibly dropped! There really hasn’t been a better time to visit Iceland in the past decade than right now.
To help you get an overall impression of prices in Iceland, we gathered recent information about accommodation, food, and transport for the year 2023. Check out this guide and pack your suitcase, because now just might be the best time to visit Iceland!
All these prices were checked in December 2022, using platforms such as booking.com, airbnb.com and numbeo.com
The price checks were all carried out for 2 adults sharing a room in downtown Reykjavík.
If you are going out of the city center, which can be great if you have a car rental, then the prices are going to go down. So, if you are staying out of town you can cut your accommodation budget by around 30-50%!
Prices for a 4-star hotel and up per night:
ISK: 18.018 – 53.800
EUR: 126 – 462
The prices were checked out by searching on www.booking.com for a twin room for the 1st March 2023 for the accommodation located less than 3 km from the city center.
The shoulder seasons of March / April and September / October can often offer some bargain prices. Searching booking.com for the 1st March 2023 found some cheaper hotel and guesthouse rooms located less than 3 km from the city center.
ISK: 6.721 – 49.935, plenty of rooms at good city hotels at 12.012 – 25.052
EUR: 47 – 348, plenty of rooms at good city hotels 84 – 175
USD: 54 – 398, plenty of rooms at good city hotels 95.70 – 200
Choosing your dates carefully can make your accommodation budget-friendly! Booking last minute can be quite risky in Iceland, throwing up a fabulous bargain, or leaving you with a few quite expensive and/or inconveniently located accommodations.
Dormitory style accommodation was checked out at Loft hostel, Kex Hostel, Bus Hostel for the 1st March 2023:
ISK: 10.946 – 19.369
EUR: 77 – 135
USD: 88 – 155
Hostels that are more expensive are usually the “nicer” ones, offering a bar, restaurant, or a good café and places to hang out, often there will also be live music or events going on.
My Reykjavík favorites are Loft Hostel and Kex Hostel, both have lively and cozy bars and very individual styles – there is always plenty going on but you can just chill out if you want. The loft offers soups and light refreshments, and Kex serves tasty pub-style meals and snacks.
If you want to save money on your accommodation, some hostels which are less stylish, but still comfortable, and not quite in the heart of the city offer cheaper private rooms, so again it depends on your priorities. Another site that is very useful for researching hostels is hostels.is, particularly when you want to arrange stays at various locations around Iceland. Not all hostels are listed there, though, so it is always best to check booking.com as well.
The hostel at Stórholt, Akureyri is my absolute favorite place to stay outside of the capital. Not quite in the center of Akureyri, it has great views of the mountains and is particularly good value. On 1st June 2023 a twin room would cost:
ISK: 11.711 – 16.917
EUR: 81.66 – 117.97
USD: 93.32 – 134.81
A higher price gets you a larger room, and if you pay more, you can even have a private bathroom. Stay on the 1st of November 2023 and you will pay less:
ISK: 9.009 – 12.012
EUR: 62.82 – 83.77
USD: 71.79 – 95.72
However, you do need to check out each individual hostel, their prices, and their facilities as they can vary. You can finish up paying more or less in really remote places – there is no hard and fast rule!
Guesthouses are often charming, with many offering similar facilities to a small hotel. Quite a few have guest kitchens, and cooking for yourself is another great way to keep costs lower. The prices were checked out for 1 July 2023. You can normally find lower prices in Spring and Autumn.
ISK: 7.968 – 14.300
EUR: 55.56 – 99.72
USD: 63.52 – 113.99
There is a huge range of Airbnb accommodation in Iceland, and the availability is constantly changing, as this market is very season- and location-dependent. A small private apartment for 2 people or a 2-person room is the best way to go. You might want to check out the facilities, because if you opt for the room, you may be sharing the bathroom with other guests or your host. It’s also good to know that while some hosts share their bathroom or kitchen with the guests, others might refuse to do so.
The prices you might pay for a private apartment with beds for at least two adults in Downtown, Reykjavík for 1 July 2023 are the following:
ISK: 23.457 – 74.762 per night
EUR: 163.57 – 521.34 per night
USD: 187 – 596 per night
If you are willing to stay on the outskirts of Reykjavík it can be easier to find slightly cheaper Airbnb accommodation. Likewise, you can often find lower prices out in the countryside. Although in areas where the demand is very high and only a few accommodation options, prices can be pushed up. Spring or Autumn mean slightly cheaper available options.
Combining your accommodation and transport gives you freedom and flexibility. Plus, there’s nothing better than non-stop driving around Iceland’s natural beauty and stopping at majestic landscapes. Camper vans will be a great option if you want to travel the whole Golden Circle, take the Ring Road, and see the world-famous Northern Lights and hot springs. So, what does the cost of hiring a two-berth campervan per day?
ISK: 13.000 – 49.000
EUR: 88 - 345
USD: 100 - 390
Companies will not normally rent a van to you for less than three days, especially in the summer. The most expensive vehicles come with extras, for example, a shower and/or a roof tent. Standard insurance coverage is included, with extra options being available for an additional fee. Some, but not all vehicles, can be insured for driving on F roads. The items that the basic rental fees will cover vary from company to company, so this is something you should check up on too.
Iceland is not a cheap country when it comes to food but there certainly are ways to keep the costs down. If breakfast is included in your accommodation, then go for it! If your accommodation gives access to a kitchen, you can cut costs a lot. Preparing your own food and going for picnics is always going to be cheaper than eating out all the time.
Reykjavik has a good selection of supermarkets with a wide choice of Icelandic food. Shopping tips can help a lot – Bónus stores offer the best value, there are a few in the city and, also, in various country towns. 10 to 11 is great if you run out of something essential but it is quite expensive. Krónan and Hagkaup offer a good choice of high-quality products but they are also more expensive than Bónus. You will also find village shops are a little more expensive than city stores, such as Kjörbúðin and Samkaup, which you will find in the countryside.
In terms of street food and cheap places to eat in Reykjavik, we’ve made a separate blog post about the places for foodies with meals that cost around 1000 ISK / less than 10$.
A meal in a cheap restaurant is 1.590 - 5.000 ISK (Euro 10.01 – 34.87 / USD 12.68– 39.86)
A 3-course meal in a mid-range restaurant price for 2 people 9.500 – 20.000 ISK (Euro 66.25 – 139.48 / USD 75.73 – 159.44)
McDonalds or combo meal deal 1.500 – 2.400 ISK (Euro 10.46 - 16.74 / USD 11.96 – 19.13)
500 ml beer (domestic) 800 – 1.500 ISK (Euro 5.58 – 10.46 / USD 6.38 – 11.96)
Cappuccino 375.30 - 900 ISK (Euro 2.62 – 6.28 / USD 2.99 – 7.18)
Coke/Pepsi (0.33 liter) 200 - 500 ISK (Euro 1.39 - 3.49 / USD 1.60 - 3.99)
Water (0.33 liter) 200 - 375.30 ISK (Euro 1.39 - 2.62 / USD 1.60 - 2.99)
1 liter milk 150 – 245 ISK (Euro 1.05 – 1.71 / USD 1.20 – 1.96)
500g white bread loaf 280 – 900 ISK (Euro 1.96 – 6.29 / USD 2.24 – 7.19)
1 kg white rice 235 – 599 ISK (Euro 1.64 – 4.19 / USD 1.88 – 4.78)
12 eggs 500 – 900 ISK (Euro 3.50 – 6.29 / USD 3.99 – 7.19)
1 kg boneless chicken 1,300 – 2,500 ISK (Euro 9.09 – 17.48 / USD 10.38– 19.96)
1 kg beef steak 2,000 – 4,000 ISK (Euro 14.13 – 28.27 / USD 15.88 – 31.76)
1kg oranges, apples or bananas 200 – 600 ISK (Euro 1.41 – 4.20 / USD 1.98 – 4.79)
1 kg potatoes 195– 460 ISK (Euro 1.36 – 3.22 / USD 1.56 – 3.67)
1 kg tomatoes 349 – 800 ISK (Euro 2.44 – 5.59 / USD 2.79 – 6.39)
1 kg onions 67 – 369 ISK (Euro 0.47 – 2.58 / USD 0.53 – 2.94)
1 head of lettuce 170 – 400 ISK (Euro 1.19 – 2.80 / USD 1.36 – 3.19)
Bottle of wine (mid-range) 1,900 – 4,000 ISK (Euro 13.29 – 27.98 / USD 15.16 – 31.91)
Domestic beer (0.5 liter bottle) 289 – 600 ISK (Euro 2.02 – 4.20 / USD 2.31 – 4.79)
Cigarettes 20 pack (Marlboro) 1,399 – 1,800 ISK (Euro 9.78 – 12.59 / USD 11.16 – 14.36)
Normal-strength alcohol is only sold at Vínbúðin stores. The only way to buy alcohol cheaper is to maximize your duty-free limit when you come into the country.
An individual bottle of Brennivín 619 ISK (Euro 4.35 / USD 4.96)
Individual vodka & lemon 445 ISK (Euro 3.21 / USD 3.57)
An individual bottle of wine (187ml) 449 – 800 ISK (Euro 3.16 – 5.63 / USD 3.60 – 6.42)
Bottle of wine – cheap to middle range 1,900 – 4,000 ISK (Euro 13.29 – 27.98 / USD 15.16 – 31.91)
Bottle of dessert wine 1.699 – 8990 ISK (Euro 11.95 – 63.23 / USD 13.63 – 72.13)
Medium bottle of brandy 500 ml 3.299 ISK – 8.599 ISK (Euro 23.20 – 60.47 / USD 23.36 – 202.16)
Bottle of port – cheap to middle range 4.499 – 15.589 ISK (Euro 31.64– 109.63 / USD 36.15– 125.27)
Bottle of Brennivín (schnapps) 3.099 – 8.940 ISK (Euro 21.86 – 62.97 / USD 24.88– 71.78)
Bottle of Harveys Bristol Cream Sherry 4.299 ISK (Euro 30.20 / USD 34.48)
Bottle Tequila 6.999 – 17.999 ISK (Euro 49.15 – 126.39 / USD 56.13 – 144.35)
Bottle of whisky 4.698 – 19.999 ISK (Euro 32.99 – 140.45 / USD 37.69 – 160.43)
Bottle of best whisky 49.999 ISK (Euro 351.13/ USD 401.08)
500 ml of beer will set you back between 800 and 1.500 ISK with prices of 1.000 to 1.200 ISK being typical. 1 liter of beer does not cost much more than 500 ml. Happy hour will get you a great reduction on these prices and sometimes a 2 for 1 offer. However, the price of beer in Iceland may differ from one place to another.
Many visitors say gas is expensive in Iceland, however, the prices are not very different from those in the UK. As in a lot of countries, during the recent year, the petrol prices have grown drastically in Iceland they were affected too, although it’s true that most other countries have cheaper petrol.
Petrol prices currently vary around 322.31 ISK per liter, and diesel price in Iceland is around 327.02 ISK per liter.
And if you want to rent a car in Iceland, the price will begin somewhere around 20.184 ISK / 141 EUR / 159 USD for 24 hours.
The Smyril Line Ferry Company can ship your car from Denmark to Seyðisfjörður, a charming port on a magnificent fjord in East Iceland from 353 Eur. The journey on a ferry from Denmark to Iceland takes 3 days, and the rates given below are per person for 2 people making a return trip with their vehicle.
Ready to book your trip to Iceland? Check out our multiday vacation packages to get the most bang for your buck!