How to Budget for a Trip to Iceland
One of the most common questions visitors to Iceland will ask is “how much will a trip cost?” Once known as one of the most expensive places to visit, Iceland still isn’t cheap, despite its famous economic collapse and currency devaluation. But still, the cost of a trip to Iceland can vary greatly depending on a few factors: what time of year you go, how long you stay, whether or not you rent a car, and your travel style. So the short answer to “how much will my trip cost?”: a vague “well that depends.” For the long answer, read on.
The cost of flights to Iceland can fluctuate quite a bit. If you’re traveling from the US or Canada, from a hub not serviced by Iceland Express or Icelandair, and are traveling in summer, you can expect to pay anywhere from $700-$900 round trip, plus an additional $200-$300 to get you to a hub serviced by one of the airlines that flies to Iceland. But if you’re coming in winter, can be flexible with your dates to get the best deal, and can fly directly out of JFK, Boston-Logan, or Newark, you might be able to score a flight for as low as $350 round trip. Flights from the east coast to Reykjavik in winter are generally in the range of $450-$550 round trip.
The cost of accommodation will also range quite a bit depending on a number of factors, starting with the time of year. June, July and August are the busiest months of the year for tourism in Iceland, and room rates reflect the increased demand. Expect to pay $25-$35 per person for the most basic hostel or sleeping bag accommodation in summer; moderate lodging can generally be had for $100-$150 per night for a double room; and you’ll be hard pressed to find luxury-level accommodation for under $200 in summer high season. If you’re traveling on a small budget, your best bet for summer lodging is to stay at a hostel or sleeping bag accommodation. Camping near Reykjavik is available for as low as $10 or so US per person per night.
Winter rates can be significantly lower than summer rates, and most off-season rates are valid from mid-September to the end of May. During winter, you can often find double room accommodation with shared bath at a guesthouse or basic hotel for $80-$120 per night, or a single room for $50-$80 per night.
Car rental in Iceland isn’t cheap, and the price goes up if you rent one in summer, need an automatic transmission, or want a car capable of handling interior roads. The most basic car – a tiny compact with manual transmission – starts at about $70 US per day in winter and goes up to $130 during summer peak season. There are discounts available for longer rentals, but remember to add in the costs of gravel protection, insurance, and fees for extra drivers. If you need a car with an automatic transmission, figure on at least $100-$120 per day in winter and $130-$150 per day during summer. 4wd cars capable of handling interior roads can cost as much as $250-$350 per day.
Attractions and tours
If you thought figuring out a budget for hotel, flights and car rental was tricky, it doesn’t get any easier when it comes to attractions and tours in Iceland, because once again, the price is going to vary a lot depending on what you want to do. If you plan to spend most of your time in your rental car, simply driving around and checking out some of the amazing sights in Iceland, you won’t spend much on tours and attractions. But if you’d rather let someone else do the driving and want to go on a few organized tours, this section of your budget will quickly grow.
My advice: look through the list of tours and outdoor activities available and determine which you absolutely must do, then consider which you can do on your own with a rental car, like visiting Geysir, Gulfoss and Thingvellir on the Golden Circle. The cost of renting a car for the day and visiting these on your own will be less than the cost of booking a tour, especially if you can split the cost with one or more other people.
Attractions and museums in the city of Reykjavik will be less expensive. Several Reykjavik museums even offer free admission so you could go an entire day without spending money on sightseeing if you plan it right.
A good rule of thumb is to plan on $10-$15 per day per person for attractions and museums in Reykjavik and $100-$150 per person per day for other events and outdoor activities. Some, like diving or dog-sledding, will be more expensive, while other activities like horseback riding will cost less.
Drinking and dining
The costs of drinking and dining in Iceland may be the ones to fluctuate the most. If you really wanted to (and were staying in a hostel or guesthouse with cooking facilities or a free breakfast) you could get by on about $10 US per day for food and drink. But that would require eating home-cooked meals from supplies purchased at the grocery store every night. On the other hand, if you wanted to experience the best of Icelandic cuisine and opted to eat out for every meal (having a moderate breakfast and lunch and an entree and one drink for dinner), you’d need to spend close to $80 per day per person.
Obviously, there’s a huge middle ground between those two extremes. I suggest opting to eat breakfast at your accommodation and then alternate the rest of your meals – cooking in a few times for lunch or dinner, grabbing a few cheap eats like hot dogs, pizza or noodles for a couple of meals, and then mixing in a few of Iceland’s best culinary experiences. Also be sure to swing by the airport duty free when you land so you can stock up on inexpensive alcohol to consume at your accommodation, rather than paying $6-8 per beer in a bar. If you do that and spend $5-$8 on your cheap meals and $35-$50 on the more expensive meals (entree and one drink), you can get by on an average of $30-$40 per day.
Shopping may be the expense you have the most control over, and if there’s one place you need to trim your budget, this may be the easiest. In Reykjavik, the shops will tempts you with their stylish clothes and modern art, but like everything else, luxury goods in Iceland come at a premium. To save some money, do your shopping at the Kolaportid weekend flea market, where you can find homemade and gently used arts, crafts, jewelry, clothing, and toys for much less than in the souvenir shops.
The bottom line
The cost of your trip to Iceland will vary greatly according to a number of factors. If you go for one week in winter, flying out from a hub serviced by an Icelandic carrier, stay in basic accommodation, rent the lowest class of car for a few days, take minimal tours, and cook many of your meals at your accommodation, you could pull of the trip for as little as $1800-$2000. But if you go in summer, opt for an automatic transmission, dine and drink out many times, stay in more luxurious accommodation, and book several day trips, expect to spend at least $2500-$3000, with the price just going up from there.
Again, there’s a lot of middle ground there, and you have quite a bit of control over which end of the spectrum your daily budget in Iceland lands on. If you’ve got the funds and can go all out, you can plan a luxurious trip you’ll never forget. But just because your budget is on the smaller side doesn’t mean you can’t see and do quite a bit in this beautiful country. Sure, some sacrifices may have to be made to make your dollars stretch, but you can plan an amazing trip to Iceland on a smaller budget.