I won’t lie: Iceland is expensive but it is possible to travel Iceland on a budget even though it is currently ranked as the third most expensive country in the world for tourists. Almost all food in Iceland is imported and, due to such a small population, there isn’t much competition between retailers and business owners that would drive prices down. As with any country, if you travel in the off-season or shoulder seasons, your daily costs will go down compared to peak travel season (typically the summers) which is one way to save money in Iceland. To put it in perspective: the first time I visited was in May 2016 and the same hostel almost doubled in price from the first night we stayed in Reykjavik to the last night two weeks later, as it was closer to peak summer months.
The first time I visited in 2016, I spent about $2,500 CAD on a 10-day road trip around the country and a few days in the capital city Rekyavik. We didn’t do any bus tours and brought a lot of snacks to eat in the car to save money on eating out. The second time I visited in 2019 I spent about $1,500 CAD on a 4-day visit but did one 2-day excursion and the Blue Lagoon. The second time I spent about $500 in food for the 4 days because we decided to try a few more restaurants rather than purchasing food at the grocery store.
All this being said: travelling Iceland has been my absolute favourite destination to date and I do highly recommend visiting if you enjoy adventures and being outdoors.
Iceland Trip Duration
I am of the mindset that the longer you can visit a place, the more cost effective your trip is because of how expensive flying can be. As a math nerd, I like to average my flight cost over the cost of my trip so going somewhere for two weeks instead of one week essentially halves the daily cost of your flight. That being said, you’re now spending more money each day so the cheaper the daily cost the better! Iceland is one of those places that may not be the most cost effective to go for longer but it is entirely worth it because of all the beautiful things the country has to offer! I have a suggested 10-day Iceland Itinerary here, but you can easily spend 24 hours in Iceland as a stopover, 3- or 5-days in Iceland or anywhere in between.
Iceland Trip Costs
The best way to save money while travelling is to adopt the “Do-It-Yourself” mentality. If you’re paying someone for their time, such as booking a bus trip or making your food, you’re going to spend more money than if you do it yourself. Renting a car and driving along the Ring Road in Iceland yourself is the most cost effective option; however, there are plenty of tours for reasonable prices that will take you to all the major tourist destinations.
BudgetYourTrip.com is the single best resource I use when budgeting to travel. It’s fairly accurate and gives a good baseline with which to plan your budget. You can expect to spend double the price of food in Canada or America when eating out in Iceland and more than double the average accommodation prices in Europe. On the smallest budget, you could spend about $100 per day in Iceland, and an average/mid-range budget would be about $200/day.
You’ll also have to factor in travel costs: the airport is about 45 minutes from Reykjavik and there are a few options including taking the airport bus transfer or a personal taxi. You can be smart and start or end your trip at the Blue Lagoon, which is close to the airport.
Iceland Trip Packages
There are plenty of Iceland trip packages to purchase and they range from one day to multiple days. If you’ve done any planning for Iceland so far, you’ll find that the Golden Circle tours are the most popular. I personally recommend the southeast Iceland tours because it’s my favourite stretch of the Ring Road. You also might consider paying for a tour that you wouldn’t be able to do in many other places in the world such as: an Ice Cave tour (available in the winters); a glacier hike; bird watching puffins (there are maybe 10 countries that have puffins); or a Northern Lights tour (not guaranteed to see them though).
I do recommend the Blue Lagoon even for the price, if it’s within your budget. (I visited the lagoon the second time I went to Iceland and I did very much enjoy it and typically spas are not my favourite activities). Even in the busy season you’ll find there’s lots of space between people in the pools and it’s a wonderful experience for those who enjoy spas and retreats. To get the most for your money, spend the day there.