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How Much Does an Iceland Trip Cost? [2023 Iceland Budget]

Iceland is known for being an expensive destination and after visiting Iceland three times and helping over 30 people plan their Iceland trips, I’ve gotten a good sense of the average Iceland trip cost. While it is pricey, your Iceland vacation cost can still be within reach if you build your Iceland budget carefully.

To be honest, I’ve seen everything from people that found a cheap flight, stay in hostels, and sign up for group bus tours to keep costs down to luxury travelers that book private drivers, luxury hotels, and go all out with adventure experiences like private helicopter rides. How much a trip to Iceland costs really depends on what type of experience you are looking for, what kind of traveler you are, and ultimately, how much you want to spend.

And while I wouldn’t recommend taking big bus tours, if that is the only way you can see Iceland, it is still worth it to visit this incredible country. There are few places in the world that have touched my soul and captured my heart like Iceland. For its raw beauty, fire and ice extremes, vast emptiness (outside of main tourist stops), to the endearing quirkiness of the Icelandic culture, it is a place I will return to again and again.

The good news is that Iceland has greatly expanded its hotel inventory, which helps balance supply and demand. The exchange rate from U.S. Dollars to Icelandic Króna has also been trending in the favor of American tourists recently. And, the recent introduction of Play Airlines brings a budget airline option back to Iceland after the demise of WOW Airlines in 2019.

Dynjandi lower waterfalls with fall colors surrounding

Average Iceland Trip Cost

I’ll cut to the chase and give you the bottom line on how expensive a trip to Iceland can be, but be sure to read on to see the breakdown and ways that you can save money in each category. The average trip to Iceland cost adds up to about $350 per person, per day including airfare. (Based on current exchange rates) This assumes budget airfare, budget accomodations, limited organized activities, self-driving, and being careful in your food choices.

If you are traveling solo, your best bet will likely be staying at a hostel or renting an Airbnb. It definitely helps to travel with others so that you can split the costs.

Since hostels and bus tours aren’t our things, I’ve based the average cost for a trip to Iceland for a family of four staying in nice (but not extravagant) hotels or guesthouses and renting a car for a self-driving vacation. I’ve also included a few activities since I think it would be a shame to get to a bucket list destination like Iceland and not get to take part in a few adventures. But keep in mind, that there is enough natural beauty and hiking available that you can easily bypass these to conserve your budget.

The average Iceland trip cost for a family spending a week in Iceland is around $9,000-10,000 including airfare. Yup, that is about $1,400 a day. I have worked with families of five that have spent $25,000 on a 10-day trip, and couples who have spent $5,000 on a week-long trip. I’ve even planned an Iceland vacation for a solo traveler that cost them nearly $2000, all costs included, for a five-day trip.

Dyrhaloey arch -- where to find puffins in Iceland

Iceland Budget Tips

Note: This post contains affiliate links. If you click a link and make a purchase, I may receive a small commission. 

If you do want to save some money, my partner Hidden Iceland offers my readers 10% off scheduled group tours if you use promo code WE3TRAVEL. We have traveled with Hidden Iceland and highly recommend this company for its expertise, professionalism, and friendliness. See all their available tours. You can also book private tours or get help planning your whole itinerary — just be sure to mention We3Travel when you contact them.

You can visit Iceland on any budget, at least in theory, but here are some suggestions for keeping costs down:

  • Try camping instead of staying at hotels or guesthouses. You can rent a campervan that fits two people for about $80 a night, up to about $250 per night for larger campervans. You can camp for free in Iceland but if you are in a camper van, you will probably want to stay at a campground with facilities so budget another $10-50 per night for a campsite reservation.
  • If you don’t want to camp, you could also stay in hostels, which will run you around $40-100 per person per night in Reykjavik.
  • Airbnb or vrbo is another option for vacation rental apartments and cabins, which is a great option for families compared to renting two hotel rooms because there are only a few hotels in Reyjkavik for families that offer family-size rooms with beds enough for 4-5.
  • Food is one of the especially high expenses in Iceland so to save money, purchase and prepare your own food or buy snacks at the gas station convenience stores. If you want a foodie experience, you are going to pay through the nose for it so get used to sandwiches, burgers, and those famous Icelandic hot dogs.
  • Avoid paid attractions like the Blue Lagoon and costly excursions like off-roading tours and focus instead on scenic drives, stops at waterfalls, and nature hikes.
  • Stay in the countryside and avoid the biggest tourist spots instead of Reykjavik as things are going to be more expensive in the capital city. I was surprised by how affordable the accommodations are in the Westfjords and Snaefellsnes Peninsula.

Before you worry about having to convert and carry a ton of cash around Iceland, don’t stress. Almost everywhere takes credit cards in Iceland. Be sure to read my Iceland tips for some caveats.

How Much Does an Iceland Trip Cost?

The black sand of Vik in Iceland
The black sand beach at Vik

Let’s break down the average Iceland budget. As with other posts where I’ve broken down vacation costs for Italy, London, Greece, and Paris, this post outlines pricing for two adults and two children between the ages of 6-11, traveling from a major airport hub in the United States during the summer high season, such as NYC to Reykjavik, and spending a week in Iceland.

I find that in Iceland, some hotels list their prices in Euro, and most show rates in Icelandic Krona. To make it easier, I’ve converted to U.S. dollars to create an even playing field.

Airfare

Iceland Air

I can’t even count the number of emails that I’ve gotten from people traveling to Iceland that start with “I found a great airfare to Iceland next month (or some other close time frame)…” I then go on to pop their bubble about how expensive the rest of the trip will be.

Once WOW went out of business, prices went up a bit but I still have found rates on IcelandAir or Play Airlines from Boston for about $300-500 per person, roundtrip. However, you then need to build in the cost of checked luggage (unless you are an amazing packer Iceland will typically mean a checked bag) and seat selection. This can easily add another $100-200 per person.

Total airfare cost ($500 per person, round trip x 4 people): $2,000

Accommodations

Reykjavik hotel

If you are traveling solo, it is easy enough to stay in a hostel to save money on accommodation in Iceland. But most families will prefer either a hotel or Airbnb/VRBO. A rental will certainly save you money as there are only a few hotels that offer family rooms.

Most Reykjavik hotel rooms either have a double bed (two twins pushed together) or two twin beds. Occasionally you can find a triple or a family room, but a family of four often needs to reserve two rooms. A nice hotel in downtown Reykjavik with a family room will cost between $400-600 per night. You can also get two rooms at a moderate hotel for about $150-250 per night each.

Renting a vrbo apartment will save you a significant amount, as long as you are comfortable as an independent traveler. You should be able to find an apartment in the city large enough to fit everyone for about $300 per night. And if you have been saving up your hotel loyalty points, Hilton Honors members are now in for a treat with multiple Hilton properties now available in Reykjavik.

Dynjandi waterfall top
Dynjandi bridal veil falls

Full-service hotels in the countryside will start at around $150 per night for a standard room and $350 per night for a family room. There are also some guesthouses that start around $150 per night, per room or lower, especially in less crowded areas.

In the countryside, there is a large selection of vacation cabins available on vrbo. Expect to pay about $200+ per night for a cabin that sleeps four. Just plan in advance if you want to stay in popular locations along the south coast or by the glacier lagoon, as these sell out early.

If you are looking to do Iceland on a budget, renting an Airbnb or VRBO is the way to go unless you want to camp or stay in hostels, as covered above.

Total accommodation cost: assuming an average of $300 per night (if you primarily use vacation rentals) x 7 nights = $2,100

Car Rental

5 days in Iceland -- rent a car from Sixt

When visiting Iceland, if you want to get away from crowded bus tours and see the country or drive the Ring Road, you will need to rent a car. If you don’t rent a car, you will need to take a shuttle bus (about $30 per person) from Keflavik airport into downtown Reykjavik and then arrange group tours with pick up and drop off from there. Just don’t take a taxi as those can run about $150 one way between the airport and Reykjavik.

Car rentals can be pricey and you may be tempted to save money by skipping the insurance. Before you do, check with your credit card or car insurance provider because you probably still need to buy the ash and rocks coverage. Insurance can greatly increase the cost of the rental car, but you may need it.

There are plenty of budget car rentals but before you book, double-check their hours and location (how far from the airport, shuttle hours), and see the cost of add-ons so that you can compare apples to apples. (See other tips for Iceland car rentals.)

If you are visiting in the winter, you will definitely want an SUV or four-wheel drive. Otherwise, if you are sticking to the Ring Road, a four-wheel drive isn’t necessary. However, access to some hikes and activities will be on gravel roads and you will be more comfortable (and less likely to sustain damage from rocks) in a car with a higher clearance. I’ve seen a sedan get stuck on a rock in the parking lot for a hike before and people literally had to lift the car to get it off. Luckily it wasn’t totally ruined.

Black house in Arnarstapi

Also, keep in mind that to drive on the interior “F roads”, you will need a car that is allowed on those roads. Since many of those roads aren’t passable for much of the year or are extremely hard to navigate (I’ve literally seen a road sign in the middle of a field of snow), I wouldn’t bother with F roads.

The other thing to pay attention to is that you will want to make sure that your car is large enough to fit luggage for your family. Unless you are a super light packer, you will probably need checked bags for Iceland to make sure you are prepared for any weather. (See my Iceland packing list for tips!) I would recommend either a station wagon or an SUV for a family of four.

I use Auto Europe to check for the cheapest car rental rates in Iceland. Don’t forget to budget for gasoline as well (and please, if you rent a diesel car, make sure you use diesel petro!). Currently (December 2022), gas costs about $8.55 per gallon.

If you don’t want to drive, your best bet is to stay in Reykjavik and take tours that offer pick-ups from the city as day trips. If you want to hire a private driver-guide, you should expect to pay at least $500-1500 for the day.

Total car rental cost: Station wagon with insurance and unlimited miles will be approximately $1,200 for a week. Also, add about $300 for gas if you are driving a lot.

Food

Icelandic Fish and Chips in Reykjavik Iceland

You have probably heard that food in Iceland is expensive. If you have traveled to Scandinavian countries in the past, then you are probably used to high food prices, but for many, it can be a shock. This is especially true in the nicer restaurants in Reykjavik.

In Iceland, even a hamburger can run you $10-15 and most fish entrees will be closer to $30+. So dinner for a family of four can easily cost $100.

I’ve talked to many people who have felt Iceland was the most expensive place that they have traveled to when it comes to food. My advice is to splurge on one meal but keep the rest casual to keep the costs down.

mussels with a lemon wedge in a white bowl

You will want to try some of the specialties like Arctic char, langoustines, lamb, and if you are brave even try some reindeer or puffin. But to balance out those specialties, you can have a hearty lunch of meat soup or lobster bisque with bread. In the countryside, you can find many restaurants that offer buffets of amazing fresh, homemade food that will fill you up for hours so try to have a light breakfast, one large meal, and one lighter meal.

There is also no need to buy bottled water in Iceland as clean tap water is readily available (although it could have a bit of a sulfur smell at times), just be sure to bring along a refillable water bottle. You can also save by stopping at one of the markets, like the BONUS grocery store, and picking up supplies, especially if you are staying in a rental home or apartment.

Be sure to check out my recommendations on where to eat in Reykjavik.

Total food cost for a family of four: $200 x 7 = $1,400 (keep in mind that this can vary widely depending on if you cook and how much you splurge)

Tours and Activities

Blue Lagoon Iceland

How much you spend on tours is entirely a personal preference. You can plan a private helicopter tour for over $3,000, or you can take a free hike. And just about everything in between. There are also plenty of free things to do in Reykjavik too. I would recommend trying at least a few of these unique things to do in Iceland.

Whatever you do, don’t feel like you need to take a tour for everything. You don’t. For example, you can easily do the Golden Circle and Thingvellir National Park on your own full-day road trip. But you may want to splurge on something like a glacier hike or an ATV tour that you CAN’T do on your own.

You can also forgo the touristy and expensive Blue Lagoon (if you go you need to book in advance), in favor of other hot springs around the country, like Krauma, the Secret Lagoon, or Fontana Spas.

There are a few things that I always recommend to clients. First, this is the land of ice and fire. Do at least one activity that takes you out onto a glacier (the ice part) such as:

Another option is to take a boat tour of the Glacier Lagoon.

Super jeep Southcoast Adventure

For the “fire” part, I would recommend either a lava tube cave tour, a stop at the Lava Center, and/or a visit to at least one hot spring or spa.

There are so many fun things to do in Iceland. If you are adventurous, I would recommend splurging on something like a super jeep tour or ATV/buggy adventures.

I would recommend staying away from large group bus tours (e.g. Reykjavik Excursions) and instead book a small group or private tour with my partner Hidden Iceland. You can save 10% on scheduled group tours with Hidden Iceland using promo code WE3TRAVEL or for private tours, just tell them I referred you when you contact them.

If you can splurge on a few activities, here is what they would cost (based on current exchange rates):

  • Secret Lagoon (2 adults, kids are free) = $42
  • Into the Glacier (2 adults, 2 kids) = $530
  • Lava Cave tour (2 adults, 2 kids) = $104
  • Super jeep tour (2 adults, 2 kids under 11) = $737

Total Activities Cost for 2 adults and 2 kids under 12: $1413

Total Iceland Budget: $9,826

Category Cost
Airfare $2000
Accommodations $2100
Transportation $1500
Food $1400
Tours & Activities $1413
Total $9826

So yes, Iceland vacation costs are high. If you look closely at the breakdowns, you can find ways to save money. You can also easily spend more. This was meant to be a guide to how much a trip to Iceland costs based on my experience helping so many families. Larger families or groups will cost more. Couples or solo travelers will be much less.

Traveling off-season will save you money (see my tips for visiting Iceland in the winter.) You can also reduce the number of days you stay. If you stick to just one region, you can actually pack a lot into just five days, but I wouldn’t recommend staying any less.

Where to Go in Iceland

If you need some help deciding where to go in Iceland, be sure to check out our guides and itineraries:

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