How Expensive is Iceland Really? An Honest Guide from the Locals!

Hey friend! Thinking about heading off to the land of fire and ice?

We can tell you that Iceland is STUNNING with all it’s waterfalls, glaciers, puffins, hot springs, volcanos, you name it! But one question that always comes up is - "How much is this magical place going to cost me?" Iceland is for a fact one of the most expensive countries in the world so it is no wonder that people try to think with a budget friendly mind when visiting us!

Well, grab a cup of coffee and get cozy as we’re about to break it all down, from sleeping and scooting around to soaking, sightseeing, and snacking. Let’s dive into what you really need to budget for when planning a trip to Iceland!

*DISCLAIMER*

The prices shown in this blog are at today’s rate (May 2025) so prices can be higher or lower depending on when you read this blog and visit Iceland.

Accommodation: Sleep Smart, Not Pricey

Where you sleep can make a huge difference in cost. Here we will give you an example of what you can expect to pay for a night in Reykjavík. This example is based on an accommodation booking made with a 3 month advance.

Of course this can be very different depending on what season you are visiting in and for example during the summer, prices really go up and also during the holidays in December (prices here are shown in USD but the Icelandic currency is called ISK)

Budget Travelers

• Dorms in hostels can vary, but the most decent ones start at around $110-160 per person a night. These spots are sometimes cheaper and sometimes a bit more expensive. This can all vary by season and also on the location of the hostel you will be staying at.
• One of our favorites? Loft Hostel in Reykjavík as it is in a very good location and close to everything in the downtown area of Reykjavík city. CityHub Reykjavík is also a great hostel and situated by one of the most popular streets in Reykjavík and even has a hot tub on the rooftop (great for some Northern Lights viewing).

Apartments

• Can be a great option for larger groups, such as families and friends or just longer stays in Iceland that offer more flexibility.
• Expect to pay around $170–$250 per person a night depending on size, location and season of course. Booking at AirBnb is the most common way to book apartments and houses in Iceland but checking out housing exchange websites could also be a good idea.

Mid-Range Hotels

• Sweet spot for couples or comfort-seekers that want to enjoy their holiday to the absolute fullest.
• Around $200–$280 per person a night depending on location and season.
• Try Skuggi Hotel for a great location + value and also CenterHotels in Reykjavík as they offer a good variety of hotels in the Reykjavík area for a fair price. Alda Hotel is also very nice and super popular amongst travelers.

Luxury Hotels

• Wanna splurge? Expect $500–$900+ a night for hotels like The Reykjavík Edition and other luxury hotels in Reykjavík with 5 stars and top notch service and spas. Tower Suites Reykjavík is also super nice and luxurious with stunning views from the 20th floor and big glass windows.
• Blue Lagoon Retreat can go all the way up to $1,800-2,000 per night.

Budget Tip:

We recommend that visitors always check Google Maps before they book their accommodation in Reykjavík! Some places claim to be “downtown” in their name but when in reality they are actually miles away from the 101 area.

If you're in town for a short stay, try to stay in the 101 area in Reykjavík and then you can walk everywhere and no rental car is needed which means instant savings and no need to try to find and pay for parking spaces in Reykjavík.

Transportation: From Scooters to Super Jeeps

Getting around Iceland depends on your vibe and expectations: Transportation can vary, such as public transportation, buses and taxis and then we also have electric scooters and bicycles to rent in Reykjavík and of course then we have people that want to rent their own car and drive around Iceland.

Public Buses (Strætó)

• Around $5 a ride, but not super tourist-friendly beyond Reykjavík unfortunately.
• App available for download for those that want to use public transport.

Car Rentals

• Starts at around $170/day for small cars.
• Don’t forget the cost of gas (that's not cheap) and also car insurance for your rental (Icelandic wind is no joke). This all adds to the real cost of renting a car.
• Looking for a nice rental company? We recommend skipping the car and doing daytours to save you the hassle and the risk of driving yourselves, but if you will be driving - check out Blue Car Rental!

Taxis

• Most taxi rides for short journeys start at around $25.
• A 10-min ride is usually around = $35-$40 depending on the day and traffic.
• For a taxi trip from Keflavik Airport - Reykjavík, there is a fixed price of 22,500 ISK (173 USD), this also applies to the drive from Reykjavík and to Keflavik Airport. Hreyfill is the main taxi service in Iceland and we recommend riding with them.
• Pro tip: No Uber/Lyft here in Iceland, but Hopp just launched a local taxi service!

Electric Scooters

• Also through Hopp and super fun for zipping around town and very easy to use with their mobile app! Just remember, do not drink and drive and this applies on the electric scooters especially to avoid accidents!
• Bolt also has an electric scooter service in Reykjavík and you can use their service with the Bolt mobile app and it’s super convenient.

Day Tours

• Want zero stress during your Iceland adventure? Go tour-style my friend!
• We at Wake Up Reykjavík offer all kinds of different and adventurous tours that offer all kinds of experiences in Iceland. Whether it is your basic sightseeing tours around Iceland, Food Tours or some adrenaline thrills on Snowmobile tours, RIB Boat tours or ATV rides, we have it ALL.
• No need to drive, buy gas, or argue over GPS routes. Just sit back and enjoy the ride. You can book the tours with us HERE
• Here are some of our most favorite and popular day tours that we offer and you have to check them out! They give you the most of what Iceland has to offer in only one day.
• Golden Circle Tour
• South Coast Adventure Tour
• Snæfellsnes Peninsula Tour

Activities: Epic Adventures or Chill Nature Vibes

Some things in Iceland are gloriously free and do not require any entry fees or anything like that. Popular landmarks in Iceland that offer free admission are our stunning Waterfalls, geothermal geysers, lava fields, mountains & of course the scenic drives in the countryside are FREE OF CHARGE!

But for those one of a kind experiences like scheduled tours and geothermal lagoons, here’s what you can expect to pay:

• Reykjavík Food Walk - $137 (worth every tasty bite!) Get to experience true Icelandic cuisine with a local guide in the heart of Reykjavík city. The most top rated tour in the whole of Iceland believe it or not.
• Northern Lights Tour - $145 (free rebooking until you see them!) See this natural phenomenon in the skies, it’s truly magical.
• Blue Lagoon - starting price $80 - Soak in one of the wonders of Iceland and the most famous lagoon in the world. It is very touristy and we LOVE it.
• Sky Lagoon - starting price $100 - Soak in the hot geothermal water by the Atlantic Ocean and try out the famous 7 step ritual.
• Whale Watching - $107 - Say ‘’Hi’’ to our friends in the ocean and see the stunning scenery around Reykjavík.
• Horseback Riding - Around $130 - Ride our cute little Icelandic Horses through Lava Fields outside of Reykjavík in a beautiful environment.
• Snowmobiling + Ice Caves - Around $370+ - It is for those that love the adrenaline thrill and to be out in the wild in the middle of absolute nowhere.

Budget Tip:

Buy multiple tours with us and use the promo code FUN for discounts with us on all tours!

Food: From $6 Hot Dogs to Fancy Feasts

Let’s eat some delicious Icelandic cuisine y’all, because, well it is in our top priorities to eat good food am I right?

Cheap Eats

• Famous Icelandic hot dogs, bakery bites, preprepped meals from the local grocery stores and some gas station snacks are around: $6-$12
• Suggested bites:
• Hot Dog at Bæjarins Beztu Pylsur
• Cinnamon Bun at BakaBaka
• Bowl of soup at Svarta Kaffið

Mid-Range Meals

• Sit-down spots usually run about $30–$50 per person
• Meals of the day at restaurants are usually cheaper than other meals on the menu and it is also great that you are able to try something different from the chef and maybe safe some money at the same time.
• Suggested bites
• Fish pan at Messinn restaurant
• Tacos or chicken at Bastard Brew
• Lobster or something Icelandic at Íslenski Barinn

Fine Dining

• Iceland now has 3 Michelin star restaurants, how fancy! But we have way more fine dining spots than that, for most of them expect to pay around $60-$130+ per person - but oh so worth it. YUMMY!
• Want recommendations on fine dining restaurants in Reykjavík? Check out these and if you want to make a reservation hassle free. Send us a line at info@wakeupreykjavik.com and we can make a reservation for you at one of these restaurants!
  • Matarkjallarinn (Food Cellar) Matarkjallarinn has a stunning langoustine dish and a live piano performance in the evening.
  • KOL - Has delicious steak dishes and a super fresh set of cocktails on the menu.
  • Sjávargrillið (Seafood Grill) They offer amazing seafood dishes and also meat, salad, pasta and sushi.
  • Tapas Barinn - Spanish infused Icelandic restaurant with their signature Licorice lamb, just might be the best bite in Reykjavík.

Pro Move:

Book the Reykjavík Food Walk early in your trip. It’s our top-rated experience on TripAdvisor and the best intro to Reykjavík’s food scene and the Icelandic culture in Reykjavík!

Final Thoughts: Is Iceland Worth It?

Yes, Iceland sure isn’t cheap. But it’s 1000% worth it. With the right mix of splurges and smart-saving tips, you’ll have the adventure of a lifetime without blowing your whole budget if you think wise and stay smart!

Plan well. Book early. Eat well. And let’s make some EPIC memories together in the land of fire and ice!

Have questions? Want our local restaurant list or help planning your journey? Drop us a line at info@wakeupreykjavik.com and we’d love to help you plan your Iceland adventure!