Is Iceland Expensive? Cost of Hotels, Food & Activities
Iceland is probably the most expensive country I’ve been to. And that’s coming from someone who lived in London for four years and is used to paying excessive amounts for everything.
I’d been told it was pricey, so I wasn’t expecting a budget break, but I wasn’t quite prepared for just how expensive things were.
My boyfriend and I visited Iceland for a week, and our total trip cost was £3,500. That’s £500 a day! A lot more than we’d usually spend on a holiday.
It was a bucket list trip for us and worth every penny, but that doesn’t mean we weren’t a little stressed when we checked our bank accounts!
So to help you feel prepared for your trip, I’m sharing exactly what you can expect to pay for hotels, accommodation, food and drink.
Food and drink
The cost of food and drink in Iceland is what shocked me the most.
You should expect to pay 8,000 – 11,500 ISK (£50-£70) for a mid-range dinner for two.
In Reykjavík, we paid:
- 8,300 ISK/£50 for burgers and fries
- 28,000 ISK/£168 for dinner for two at a slightly fancier restaurant
- 3,600 ISK/£22 for three tacos at a Mexican restaurant
Even outside of the capital city, we paid 3,300 ISK/£20 for one pizza in Vik!
For that reason, I’d really recommend stocking up on groceries and having packed lunches to save money. Krónan is a great, budget-friendly option.
For drinks, expect to pay:
- 1,300 – 1,800 ISK (£8-£10) for a beer/glass of wine
- 2,500 – 3,000 ISK (£15-£18) for a cocktail
If you’re looking for somewhere more affordable to drink in Reykjavík, The Irishman Pub is a great option, as they have happy hour from 12pm-7pm every day.
A beer would usually cost you 1,750 IKR/£10, but during happy hour it’s 1,000 IKR/£6.
Accommodation
Hotels in Reykjavík tend to be more expensive than in the rest of Iceland. We stayed in two different hotels, one was a smaller, boutique hotel with very few amenities, and the other was large chain hotel with a restaurant, bar and a spa. We also spent one night in an airport hotel.
- Boutique hotel – 33,204 ISK/£200 per night
- Larger hotel – 38,000 ISK/£230 per night
- Airport hotel – 23,400 ISK/£141 per night
If you’re on a budget, there are hostels in Reykjavík where you can get a bed in a shared room from around 5,000 ISK/£30 per night.
When we left Reykjavík, hotels got more affordable:
- One night in Vik – 25,000 ISK/£150
- Two nights near Jökulsárlón – 12,500/£75 per night
All of the hotels we stayed in were extremely clean, with lovely staff and great locations, and I’d really recommend them for your trip. I’ve listed them below:
- Hali Country House Hotel – near Jökulsárlón
- Hotel Local 101 – boutique Reykjavík hotel
- Grandi by Center Hotels – larger hotel Reykjavík
- Farmhouse Lodge – Vik hotel
- Aurora Hotel – Airport hotel
Activities
One of the best things about Iceland is just how many amazing experiences you can have. But those once in a lifetime experiences don’t come cheap, and this is probably where you’ll find most of your money going.
We did a mixture of driving ourselves to the sights, as well as taking day trips from Reykjavík.
Hiring a car is your best option if you’re on a budget. Most of the waterfalls and national parks are free to enter, you’ll just need to pay for parking.
If you decide to book day trips, where you’re picked up in a bus and driven to each place, you can expect to pay hundreds of pounds per person.
This is usually because they include extra activities, like snowmobiling, or hiking on a glacier, and there’s a local guide with you telling you lots of interesting information about each place.
We paid 25,000 ISK/£150 per person for this tour of the South Coast, which included visits to Skógafoss, Seljalandsfoss, Reynisfjara Beach and a glacier hike. The glacier hike was the best thing I did in Iceland, so it was well worth the money.
We also paid 42,668 ISK/£257 per person for a day trip to the Golden Circle, followed by snowmobiling on a glacier. It’s definitely expensive, but even if you book the snowmobiling separately, it would cost you around 30,000 ISK/£180.
Car hire
Hiring a car is a great way to cut costs, as you can drive yourself around and you won’t need to rely on expensive day trips.
Compared to a lot of things in Iceland, I found the cost of car hire to be quite affordable.
We rented a Dacia Duster and paid 22,500 ISK/£135 for four days of car rental in February.
The price will vary depending on the type of car you choose, when you’re visiting, and how long you need it for, so your best bet is to use Discover Cars to compare the cost across different rental providers.
I use them every time I hire a car abroad and I’ve always had a fantastic experience. They have great customer service, and flexible cancellation policies in case you need to change your booking.
The specific rental company I chose in Iceland was Ice Rental 4×4. They’re located a short drive away from the airport and you they’ll send a free shuttle to pick you up once your flight arrives.
➡️ Read my guide to hiring a car in Iceland if you want to know exactly what to expect. It’s based on my experience driving in Iceland in winter, but lots of the information applies all year round.
Hot springs
Something Iceland is famous for is the hot springs scattered across the country. They’re a great way to warm up in the winter months, but they can be pretty pricey.
Sky Lagoon tickets start from 14,000 ISK/£84, with Blue Lagoon costing 12,000 ISK/£72. Both of these are man-made and are more like spas, so if you want to save money, find one of the natural hot springs that are completely free.
Or if you like something in the middle, I’d really recommend Hvammsvik Hot Springs. Tickets start from 6,000 ISK/£35, and it’s made up of eight natural hot springs, with facilities like changing rooms, toilets, a restaurant and a swim up bar.
➡️ Read my full review of Hvammsvik Hot Springs so you know exactly what to expect ahead of your visit
Free things to do in Iceland
Despite how expensive Iceland is, there are lots of free things you can do if you’re on a budget.
You can visit waterfalls like Gullfoss, Skógafoss and Seljalandsfoss for free, as well as Thingvellir National Park, the Geysir geothermal area and Reynisfjara black sand beach. You’ll need to pay for parking but it’s usually only around 1,000 ISK/£6.
If you’re visiting during the winter months, watching the northern lights is the perfect free activity. I saw an amazing light show from my hotel near Jökulsárlón and it was the highlight of my trip.
If you’re road tripping around Iceland, you’ll spot lots of Icelandic horses on the side of the road. They’re really friendly so make sure you get out to say hello!
There’s also lots of free things to see in Reykjavík, like visiting the Harpa concert hall and Hallgrimskirkja church, seeing the Sun Voyager statue, doing a free walking tour, and browsing the many shops along Rainbow Street.
Read my other Iceland guides
16 Best Things to do in Iceland
The Ultimate Iceland Winter Packing List
Renting a Car in Iceland in Winter
