Budgeting for Iceland – Is Iceland Expensive?

Whale watching iceland

If you haven’t already heard, Iceland is pretty expensive. Food and hotel prices can be pretty steep in Reykjavik, and then on top of that, you need to pay for trips and excursions. I hope that you find this blog helpful when you are budgeting for Iceland.
You really don’t want want to go to Iceland and only stay in Reykjavik, because there is amazing scenery including lava fields, glaciers and waterfalls to see when you get out of the city. So do make sure that you get out of Reykjavik itself, otherwise, you are missing much of what Iceland has to offer.

Remember to Budget for your Equipment too!

One thing to remember about your budget for Iceland, is that you should include the cost of warm gear you will need to take. Walking boots, waterproofs, thermal base layers and fleeces are all essential. Before I came to Iceland, I had most of my equipment, but I did spend £75 on footwear, insoles and socks, and another £30 on thermal base layers.
If you are wondering what you need to invest in, read my previous article on What to Pack for Iceland.

What to Pack for Iceland

Iceland can get cold in winter, and so you definitely want to be thinking about investing in a thermal base layer and thermal socks. A good wind and waterproof mountain jacket and walking boots are essential purchases for Iceland in the winter.

Iceland Mountain Jacket

Also remember to pack your hat, scarf and gloves. Regarding specialist equipment such as crampons and diving gear for Silfra, most tour operators supply these included in the price of your tour or for an extra supplement.

Winter in Iceland - Hat and scarf

So what is the Ideal Budget for Iceland?

It is still possible to do Iceland on the cheap. You can fly to Reykjavik from UK with Easyjet (see Arriving in Reykjavik) and stay in a hostel. But your food and excursion budget will need to be on a par with London, or probably even higher, depending on how often you will be eating out.
You can check the exchange rate on www.xe.com to help you to plan.  At the time of writing this blog (April 2016) it was around 175 Krona to the £1. The easiest way to work it out, I found, was to round 1000 Krona to about £5. I was lucky, as a blogger, I was sponsored by Oddsson Ho(s)tel and Reykjavik Excursions, so I only really need a food budget.
Here’s my run down of budgeting for Iceland…

Accommodation Prices in Reykjavik, Iceland

The following estimates are based on central Reykjavik locations.
Hostel dorm bed – around £25 per night (I stayed at Oddsson)
Hotel Room Private single or double – around £130 per night (I stayed at Hotel Hilda)

Prices can be cheaper if you are willing to search slightly further out, or if you are willing to share a dorm with more people (10 person dorms come up cheaper).

Food Prices in Reykjavik, Iceland

Generally, most meals in the centre of Reykjavik are all around 2000-3000 Krona. I was eating nice meals such as veggie lasagne or burger and chips for around 2000 Krona. Here’s exactly what I paid and where for a few of my favourite places…
Egg and Bacon Breakfast at Laundromat Cafe – 1990 Kr (about £11.40)
Cranberry juice at Laundromat Cafe – 600 Kr (about £3.50)
Salmon and Cream Cheese Bagel at Laundromat Cafe – 1890 Kr (about £10.80)
Salmon and Cream Cheese Bagel at Laundromat, Reykjavik
Cheeseburger (Royal) and Chips at Prikid – 2200 Kr (about £12.50)
Veggie Lasagne and Elderflower water at Babalu Cafe – 2500 Kr (about £14.30)
Hot Chocolate at Joi Fel – 585 Kr (About £3.40)
Carrot cake at Joi Fel – 485 Kr (about £2.80)

Iceland on a Budget?

If you are really on a budget, avoid buying drinks in cafes, and there is pretty much always iced water available for free, as long as you are purchasing food. You can also consider supermarkets, but we found that food was not that much cheaper there, so we ended up eating out all of the time anyway! The cheapest supermarkets (cheap for Iceland anyway!) are Bónus and Kronan (see www.iheartreykjavik.net).
You can also consider hiring a car rather than doing excursions but make sure that you have plenty of warm gear, and several fully charged mobile phones. You can read more about things to know before you go here, and it explains how to register your whereabouts with the Icelandic rescue services.

Blue Lagoon Tour Iceland

Cost of Excursions in Iceland

There are two main tour companies that offer tours from Reykjavik – Reykjavik Excursions and Grey Line. Budgeting for Iceland excursions can be a challenge, but the cost reflects the equipment needed and the fact that you probably need to travel in a four wheel drive or a monster truck! Also, petrol is expensive. These two tour operators are both reliable and good value for money.

Here’s the cost of the main excursions from Reykjavik…
Golden Circle – from £52
Blue Lagoon with entrance – from £52
Northern Lights Tour – from £35 (often you are allowed to reschedule if you don’t see any lights!)
South Coast Tour – from around £113
Game of Thrones Tour (Gray Line) – from £55
You can book most of these on arrival, but if you are in Reykjavik for only a short time, it might be a good idea to book in advance. There are many other tours available including snow-mobile, Whale Watching, horse riding and caving.

Budgeting for Iceland – Budget Trip – £50 per Day

Overall, I would recommend a budget of at least £50 per day for accommodation and food, if you are doing it on the cheap. This would include a dorm room and basic eating out combined with supermarket lunch/snacks.
In addition, I would say that you want to do at least 3 tours per week, which would be around £250 (depending on the tours, of course). This would total a weekly budget of £600 to really enjoy and experience Iceland.
Hiring a car and splitting the cost of the petrol money would, of course, make the tours cheaper. My aunty and her husband drove the Golden Circle themselves and really enjoyed it.

Stay at the LOFT Hostel from approx £30 a night (Bed in Mixed Dorm) or Vibrant Iceland Hostel from approx £36 a night.

Budgeting for Iceland – Mid Range – £150 a Day

If you had a budget of £150 a day, you could stay in a nice hotel and eat out frequently. This would also mean that you didn’t have to cut out the alcohol! (Alcohol is expensive in Iceland).
Again, you would need to add about £250 per week for two or three good tours. As you can see, you can easily spend £1k in a week in Iceland!

One of the Best Value Mid-Range hotels in Iceland is the Storm Hotel that you can book online starting from £90 per night.

Budgeting for Iceland – Luxury – £500-£1500 a Day!

If you want to see Iceland in Luxury, your hotel alone could cost £1000 and so it’s easy to see how you need a fair few grand to see Iceland in Luxury. A meal in a fancy restaurant can easily be a few hundred. Then you have the private tours and luxury yachts which can be a few hundred each per person.

Wanna go all out? Stay at the Retreat Hotel at the Blue Lagoon.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.