As we disembarked from our flight, the crisp Icelandic air greeting us wasn’t the only thing that gave us a hint of what awaited. Hailing from the sunburnt landscapes of Australia, we’ve traversed continents, immersing ourselves in diverse cultures and landscapes. But as every seasoned traveler knows, some destinations, while breathtaking, can also be heavy on the pocketbook. Our adventure in the Land of Fire and Ice was one such journey. From geysers and waterfalls to cozy Reykjavik cafes, our quest to experience Iceland’s magic also brought with it a realization: this Nordic beauty comes with a price tag. Join us as we delve into the burning question every traveler to Iceland asks – Is Iceland expensive?

First Impressions & The Initial Spend

As soon as our feet touched Icelandic soil, the beauty around was undeniable. Majestic landscapes and the promise of unique adventures beckoned. But alongside this came our initial brush with the country’s price points.

• Airport to City: Our journey from Keflavík International Airport to Reykjavik was our first taste. While transport options were aplenty, from buses to private taxis, we quickly noted that costs here were significantly steeper than back home in Australia.
• First Meal: Hungry from our journey, we decided to dive into Icelandic cuisine right away. Opting for a local restaurant, we relished dishes like Plokkfiskur and Skyr. Delicious? Absolutely! But it made us recalibrate our dining budget for the rest of the trip.
• Accommodation: Our stay was a cozy, well-reviewed guesthouse in Reykjavik’s heart. But even this “mid-range” choice was priced closer to what we’d consider “luxury” in many other destinations we’d visited.
• Quick Groceries: We made a pitstop at a local grocery store, thinking it might be a way to save. But even everyday items, from bread to milk, bore price tags that were noticeably higher than what we were accustomed to down under.

These initial experiences set the tone. While the charm of Iceland was undeniable, and every moment felt worth it, we couldn’t ignore the fact that traveling here required a more generous budget than many of our previous adventures.

Accommodation Insights

One of the central facets of any travel experience is where you rest your head at night. Iceland offers a broad spectrum of accommodation, each with its own charm and, of course, price tag.

• Hostels & Budget Accommodations: As a couple, we often look for private rooms in hostels to save on costs. In Reykjavik, we found that even the most basic private rooms in hostels leaned towards the expensive side, reminiscent of upscale hotel prices in some of the other countries we’ve been to. Shared dormitories are more affordable but don’t expect the dirt-cheap prices you might find in Southeast Asia or South America.
• B&Bs and Guesthouses: A middle ground for travelers, these establishments offer a blend of comfort and local experience. We relished the warm, personal touches and breakfasts that often featured homemade Icelandic treats. Price-wise, they’re comparable to boutique hotels in major Australian cities.
• Hotels and Luxury Resorts: We treated ourselves one night to a luxury hotel overlooking a geothermal hot spring. The experience was otherworldly, with top-notch amenities and views to die for. But the cost? It was a splurge that we had to think twice about, given its premium pricing.
• Alternative Stays: We also explored Airbnb and local rentals. While sometimes offering better value, especially if you’re considering longer stays or traveling with a group, they were still more expensive compared to similar offerings in other destinations.

As travelers who cherish both experiences and budgeting, our take is this: Accommodation in Iceland is undeniably costlier. However, with careful planning and prioritizing, you can find places that offer value, even if it means occasionally splurging to truly embrace what this beautiful country has in store.

Eating in Iceland

Icelandic cuisine is a beautiful blend of traditional flavors, fresh ingredients, and modern culinary twists. As a couple with a penchant for savoring local dishes wherever we go, Iceland was no exception. But as our taste buds celebrated, our wallet often reminded us of the premium we were paying for these delights.

• Street Food & Cafes: Our first casual eatery experience was trying out the famous Icelandic hot dogs at a street stand. While delicious and uniquely Icelandic with its lamb meat and special condiments, the price was comparable to a full meal back in Australia. Cafes, especially those in touristy areas, also leaned towards the higher side, whether it was for a slice of cake or a cup of coffee.
• Local Restaurants: Venturing into restaurants, especially in and around Reykjavik, often felt like a premium experience. Traditional dishes like fermented shark, lamb stew, or the fresh catch of the day come with a price tag that reflects the country’s high living standards and import costs. A typical dinner for two, with a couple of courses and drinks, could easily rival a fancy date night back in Sydney or Melbourne.
• Local Delicacies: Despite the costs, we couldn’t resist diving deep into Icelandic specialties. The dairy products, especially Skyr, became a favorite. Fresh seafood, especially in coastal towns, was a treat worth the splurge. And for the brave-hearted, there’s always the unique experience of hákarl (fermented shark) – an acquired taste with a touristy price.
• Groceries & Self-Catering: Given the restaurant prices, we often found ourselves heading to local supermarkets. Brands like Bónus or Krónan became familiar spots. Cooking our meals, at least occasionally, did save us some krona. However, it’s worth noting that even grocery prices are elevated, given the country’s reliance on imports.

In our culinary journey through Iceland, we learned that while the country offers a rich and diverse gastronomic experience, it does demand a more substantial budget. But for travelers like us who believe that food is an integral part of the travel tapestry, every krona spent was a memory earned.

Getting Around Iceland

One of the quintessential Icelandic experiences is the road trip – vast landscapes, volcanic terrains, waterfalls at almost every turn, and the enchanting Northern Lights. But, as with most things in Iceland, traversing these wonders doesn’t come cheap.

• Public Transport: Iceland’s public transportation is mainly centered around its capital, Reykjavik. Buses connect major attractions within the city, but they’re not the most budget-friendly. We found the prices akin to what you might pay in some of Australia’s pricier urban areas.
• Flybus & Airport Transfers: While efficient and timely, the shuttle service connecting Keflavík International Airport to Reykjavik (and vice versa) was another expense that took us by surprise. It’s a comfortable ride, but the costs can add up, especially for a couple like us.
• Car Rentals: This was our chosen mode of transport, allowing us the freedom to explore the Ring Road and the myriad attractions along the way. Renting a car in Iceland is undeniably expensive, and that’s before considering the added costs of insurance, which we highly recommend given the unpredictable weather conditions. And then there’s the fuel – petrol stations became both our regular pit stops and regular reminders of the country’s high living standards.
• Tours & Excursions: For those not keen on driving, guided tours offer a hassle-free way to see the sights. Whether it’s the Golden Circle, glacier hikes, or whale watching, there’s a tour for everything. They’re well-organized and offer the expertise of local guides, but they also come with a significant price tag.
• Alternative Modes: We met fellow travelers who explored parts of Iceland using bicycles or even hitchhiking. While these are budget-friendly options, they require a level of fitness, preparation, and comfort with unpredictability.

Our takeaway? Mobility in Iceland is a bit of a luxury. Whether you’re renting a vehicle or relying on organized tours, transportation is a significant chunk of the travel budget. But in exchange, you’re granted access to some of the most awe-inspiring landscapes on this planet, making the expense a worthy trade-off in our eyes.

Activities & Attractions

Iceland is a land of unparalleled natural beauty, offering attractions that are both unique and mesmerizing. But as we soon discovered, immersing oneself in these wonders often came with a price tag to match their grandeur.

Natural Wonders:

• The Blue Lagoon: Arguably one of the most famous geothermal spas globally, this was a must-visit for us. While the experience was surreal, bathing in mineral-rich waters amidst lava fields, the entrance fees were decidedly on the higher side.
• National Parks: Places like Thingvellir, Vatnajökull, and Snæfellsjökull National Parks offer breathtaking views, and while some areas are free to enter, activities like guided tours, cave explorations, or specific trails usually come with fees.

Cultural Experiences:

• Museums and Cultural Centers: We found Reykjavik’s museums, such as the National Museum of Iceland and the Saga Museum, insightful for understanding the nation’s rich history. While not exorbitantly priced, they still cost more than similar institutions in other countries.
• Festivals: During our stay, we got wind of local festivals. Participating offers a genuine taste of Icelandic culture, though some, like the famous Airwaves music festival, can be pricey.

Adventure Activities:

• Glacier Hiking and Ice Caving: These unique experiences, while unforgettable, were among the pricier activities. Guided tours are essential for safety reasons, and they don’t come cheap.
• Whale Watching and Puffin Tours: Setting sail to witness these majestic creatures in their natural habitat was a highlight. But again, the tours, while comprehensive, demanded a fair bit from our travel fund.
• Northern Lights: While the lights themselves are free to witness, maximizing the experience often involves tours or stays in secluded lodges, both of which add to the expense.

Hot Springs and Public Pools: A cherished pastime in Iceland, and while some are free or nominally priced, others, especially the more renowned ones, can be costly.

In reflection, every krona spent unlocked a part of Iceland that left us in awe. While there’s no denying the expenses associated with these attractions, the memories and experiences they offer are genuinely priceless. As with most aspects of Icelandic travel, it’s about finding that balance between budget and experience.

Tips for How to Save Money in Iceland

Iceland’s undeniable allure is matched only by its reputation as a pricey destination. However, with some clever strategies and planning, it’s possible to enjoy the Land of Fire and Ice without burning a hole in your pocket. Here are some tried-and-tested tips from our Icelandic adventure:

1. Off-Peak Travel: We quickly learned that prices for accommodation and even some attractions can dip outside of the peak tourist seasons. Consider traveling during the shoulder months when the weather is still pleasant, but the crowds (and prices) are thinner.
2. Embrace Local Eateries: Instead of the tourist-centric restaurants, we often ventured to local eateries or bakeries. Not only did this offer a more authentic taste of Iceland, but it was also gentler on our budget.
3. Plan Ahead & Book in Advance: For attractions that are a must-visit, consider booking well in advance. Sometimes, early-bird prices or combo deals can offer substantial savings.
4. Self-Cater When Possible: As mentioned, dining out in Iceland can be expensive. We often frequented local supermarkets and prepared our meals, saving substantially. Plus, it added a fun, homely touch to our travels.
5. Free Attractions: Iceland’s beauty is vast, and not everything comes with an entrance fee. Explore Reykjavik’s streets, hike in areas that don’t necessitate guides, or simply pull over at one of the countless scenic spots while driving.
6. Shared Transport: If you’re open to it, consider shared transport options. We met fellow travelers and shared rides to common destinations, cutting down on fuel and rental costs.
7. Discount Cards: Investigate city or regional discount cards. The Reykjavik City Card, for instance, offers free entry to numerous museums and public transport.
8. Local Insights: Never underestimate the value of local advice. Engaging with locals often led us to hidden gems, affordable eateries, and cost-effective ways to enjoy popular attractions.
9. Opt for Hostel Accommodations: Even if you’re not into dormitories, many hostels offer private rooms. They’re often more affordable than hotels and provide communal kitchens for self-catering.
10. Stay Connected Affordably: Instead of international roaming, consider local SIM cards or pocket Wi-Fi devices. It keeps you connected without the exorbitant bills.

While Iceland is undoubtedly an investment in terms of travel expenses, its rewards are manifold. With a blend of careful planning, open-mindedness, and these practical tips, the Icelandic experience can be both enriching and reasonably budgeted.

Shopping in Iceland

Iceland, a fusion of rich culture and unique landscapes, offers intriguing shopping options, from traditional crafts to contemporary designs. Here’s a brief guide to making the most of your Icelandic shopping spree:

1. Icelandic Woolen Goods: The iconic lopapeysa sweater, crafted from local sheep’s wool, embodies Icelandic tradition. For genuine pieces, consider the Handknitting Association of Iceland in Reykjavik.
2. Artisanal Handicrafts: Explore the Kolaportid flea market in Reykjavik for diverse local crafts, from ceramics to jewelry.
3. Icelandic Literature and Music: Dive into the country’s rich artistic scene with books by local authors and music from renowned Icelandic artists.
4. Local Delicacies: Skyr, Icelandic chocolates, and Brennivín schnapps capture the flavors of Iceland. Remember to check import rules when taking them home.
5. Natural Skincare: Treat yourself with products from brands like Blue Lagoon and Sóley Organics, harnessing Iceland’s unique natural ingredients.

General Shopping Advice

• VAT Refunds: If you spend over a certain amount in one store (usually around 6,000 ISK), you may qualify for a VAT refund. This can equate to a 24% price reduction. Ensure the store offers VAT-free shopping and complete the necessary paperwork.
• Beware of Tourist Traps: As with all popular destinations, be wary of overpriced goods targeting tourists. Do a bit of comparison shopping before making a significant purchase.
• Support Local Artisans: While you might find cheaper, mass-produced souvenirs, investing in items made by local artisans ensures you’re getting an authentic piece and supporting the local economy.
• Carry a Reusable Bag: Iceland is environmentally conscious, and many stores charge for plastic bags. Carry a reusable bag to save a bit and reduce waste.

Comparison with Other Destinations: Is Iceland Expensive?

When considering our globe-trotting adventures, Iceland holds a distinct place, especially in terms of expenses. Here’s how the costs in Iceland stack up against other destinations we’ve visited:

• Accommodation: In popular European cities like Paris or Rome, a mid-range hotel might set you back a significant amount, but Iceland’s accommodations, especially in Reykjavik, often exceed those prices. Comparatively, Southeast Asian destinations like Bali offer luxurious stays for a fraction of the cost.
• Dining and Cuisine: While sampling street food in Bangkok or enjoying a hearty meal in Melbourne might be budget-friendly, dining out in Iceland, even at modest establishments, is notably pricier. The isolated location and reliance on imports drive up food costs.
• Activities and Attractions: Adventures like glacier hiking or geothermal spa experiences in Iceland come with a hefty tag, especially when juxtaposed against activities in destinations like New Zealand or the Canadian Rockies, which offer natural wonders at more accessible prices.
• Transportation: Renting a car in Iceland is almost essential to explore its vast landscapes. However, rental and fuel costs here can be significantly higher than in places like the US or Australia.
• Souvenirs and Shopping: Handcrafted goods and local products in Iceland, while unique and of high quality, often have a steeper price point than similar items in destinations like Morocco or Turkey, where artisanal crafts are more affordable.
• Overall Value: Though Iceland is on the pricier side, it offers unparalleled experiences. In contrast, destinations in Southeast Asia or South America might provide more bang for your buck in terms of sheer volume, but the exclusivity and raw beauty of Iceland’s offerings often justify the higher expenses.

While many destinations cater to travelers on a spectrum of budgets, Iceland leans towards the expensive end. But as with all things of value, the experiences and memories crafted in this unique land often feel worth every krona spent.

Conclusion

The age-old adage, “You get what you pay for,” often rings true in the realm of travel. Yes, Iceland carries a heftier price tag compared to some of our other adventures. But as we’ve discovered, some experiences simply don’t come with a budget alternative. The ethereal dance of the Northern Lights, the raw power of geysers erupting, and the serene beauty of glacier lagoons are not mere tourist attractions – they’re encounters with the sublime.

The question, “Is Iceland expensive?” can be met with a definitive “Yes.” However, a deeper exploration prompts another question: “Is it worth it?” To which, as travelers who’ve felt the magic of Iceland first-hand, our response is an unequivocal “Absolutely.”

Every destination has its unique value proposition, and while some offer quantity, Iceland offers an unmatched quality of experience. In the end, memories aren’t made of kronas and cents, but of moments that take our breath away. And Iceland, expensive as it may be, is rich in those unforgettable moments.

Frequently Asked Questions

How does the cost of accommodation in Iceland compare to other European destinations? Accommodations in Iceland, especially in Reykjavik, are generally pricier than most European cities. A mid-range hotel in Iceland can sometimes exceed the prices of a similar hotel in cities like Paris or Rome.

Helpful Resources

• The 13 Best Things to do in Iceland
• 7 Easy Budget Travel Tips: How You Can Save to Travel

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