Ready to trade that modern, urban life for some spectacular nature and wide open spaces? Iceland, the “land of fire and ice,” is one of the planet’s most stunning countries, but it’s also considered to be one of Europe’s most expensive destinations.
According to Budget Your Trip, the average daily cost for lodging, food, transportation, tips and booze is about $177 per person. The website has average travel costs for thousands of cities around the world, all provided by other travelers.
But money expert Clark Howard says that the recent demise of Wow Air has resulted in a steep drop in the number of tourists from other parts of Europe visiting the country, which makes this a great time plan a trip there.
How to plan a trip to Iceland on a budget
Visiting Iceland: Table of contents
- When to go
- Getting there
- Rental cars
- Dining & food
- Tours & activities
- Multi-day tour activities
- Free things to do in Iceland
When to go
Located below the Arctic Circle, Iceland’s summers (mid May to late July) are bright, with almost 24-hour daylight. On the summer solstice, the sun sets around midnight and rises again before 3 a.m., but some daylight is ever-present. High season also can mean the highest prices on lodging.
Consider skirting the busy season and visit in late May, early June, or September. The island is one of the best places to experience the Aurora Borealis, or the Northern Lights, best seen when days are the darkest, or from September to April.
The total two-country trip must be less than 14 days and the Iceland stopover must be 7 days or fewer. For example, a nonstop Icelandair flight from Minneapolis-St. Paul averages $550 (late July and forward) and the same $550 gets you a ticket to Paris with a stopover in Iceland (from mid August and forward). Rates from Chicago to London average $580 (effective August 6 and forward) with the optional stopover. A sample round-trip rate from Chicago to Iceland is $520, nonstop.
Through July 8, the airline offers an exclusive Buddy Hotline staffed by Icelandair volunteers ready to answer questions and make travel suggestions, via a phone call or Facebook Messenger. They are passionate about their country and have the insider knowledge to help make the most of your time. This is available for all Icelandair passengers.
Most domestic and international carriers often price-compete or undercut Icelandair and Norwegian Air with deals to Reykjavik. Here are some low/high round-trip rates from all participating carriers, based on late-August through November and early 2020 departures:
- Boston and New York: $169-$425
- Chicago, Los Angeles or San Francisco: $200-$500
- Washington DC: $220-$475
- Orlando: $300-$420
Checked bag and advance seat selection fees can apply.
Shop for the lowest airfare at Google Flights or Kayak.com/Explore. The best rates are highlighted in green. Use RESET often and tweak departure dates to refresh the calendar results. You may find the best deals with one-way tickets.
You’ll pay more to stay in Reykjavik than in the countryside and up to double during summer. Here are some average per night rates:
- $25 shared dorm room basic hostel
- $42 shared dorm in a nicer hostel
- $71 private guesthouse room with shared bathroom (Booking.com lists 476 guesthouses)
- $100 budget hotel or guesthouse
- $167 mid-range hotel
- $250 and up for 4- and 5-star hotels
Tip: Forgo the fancy hotel stay. More popular in the capital and throughout the country are guesthouses and apartments with many having a kitchenette to prepare a breakfast or light meal while saving dollars for daytime adventures. Even better, consider a hostel stay. Hostel World offers booking options at 32 locations in 18 cities (with an average rating of 8.9 based on over 16,000 reviews).
Airbnb is a good option in the capital and countryside, with a double room averaging $65 a night.
Learn more about all lodging options at Inspired By Iceland.
Since rental cars can be one of the pricier components of a trip, take public transport into the city after you land (45-min, about $28 one-way) and only pick up a rental car when you’re ready to hit the road. Here are some estimates for self-drive trips (automatic cars price higher; mileage caps may apply):
- Compact car: $40-$80/day
- 2WD car: $56-$115/day
- 4X4: $80-$160/day
- 4-person camper: $1,360/week (w/200km per day limit); from $1,455 (unlimited miles)
Note: During any time of the year, follow current road conditions at Road.is. It’s never a good idea to leave paved roads for unmarked paths (or to venture beyond marked hiking trails), but it’s always wise to share your plans with Safetravel, Iceland’s search and rescue teams. You never know what can happen especially with Iceland’s unpredictable weather. Download the useful app which allows the emergency services to track a GPS of your location, should a rescue be necessary.
Dining & food
Even an allowance of $50-$60 per person, per day, can limit your dining choices, especially if you like a meal at sit-down restaurant with an adult beverage. Some sample prices include:
- A hot dog from a hot dog stand (very popular in Iceland): About $3.75
- 12-inch Subway sub: Just over $9
- Burger at a fuel station: $14-$18
- 2-course meal (no drinks) for two at mid-range restaurant: $100
- Bottle of wine: $20 at shops and $30+ restaurants
- Beer: $11 ($6 happy hour)
Tips: Take your main meal at lunchtime and light nibbles during happy hours or at these city-center spots that offer cheap eats. Skip bottled water purchases — tap is pure and free. Tipping is not mandatory, but you’re welcome to leave for above-board service.
Tours & activities
Here are some per person prices based on the type of tour, length, and inclusions:
- One-hour puffin watching boat tour from Reykjavik: $42
- Full-day Golden Circle sightseeing bus tour: $83
- Horseback riding: $106
- South Coast bus tour: $138
- Ice cave tour: $167
Multi-day tour ideas
The Guide to Iceland is a solid information site with dozens of suggested itineraries and trip ideas for any length of visit. Actually, four days is more than enough time to immerse yourself in Icelandic culture and nature. While you won’t have time to circle the island (six or more days), you’ll still be able to take multiple trips out of the capital city, enjoy several exciting activities and can even embark on a multi-day journey out into the country.
This budget 5-Day/4-Night summer self-drive, The Golden Circle, South Coast & Glacier Lagoon takes in the popular Golden Circle tour, Gullfoss, Seljalandsfoss and Skogafoss waterfalls, the geothermal valley of Haukadalur, Thingvellir National Park and the crown jewel of the South Coast; Jokulsarlon Glacier Lagoon. It starts from $399, based on four travelers, April-August. Included are four nights of accommodation (different levels available; breakfast not included, shared bathrooms), 5-day rental car (upgrades available), CDW insurance, a GPS system, taxes, and a detailed Itinerary with fun and practical information on the nature, history and culture of Iceland. Fuel, meals are additional.
Icelandair’s 6-Night Hidden Powers and Northern Lights (based on November 27 departure) is priced from $1,663 per person, including round-trip flights (east coast gateways), two nights in Reykjavik (first and last), a 4-day escorted coach tour with three hotel nights in the countryside, a checked bag and hand luggage, daily buffet breakfast (except arrival and departure day) and three one-course dinners with coffee and tea.
Viator is a one-stop shopping website to book local tours, multi-day tours and adventures.
InspiredByIceland.com offers a wealth of tips, trips and suggested itineraries.
New: On June 8, Iceland’s first official touring route will open on the Arctic Coast Way. This northern perimeter coastal route of 560-miles traces six peninsulas with sights from black sand beaches to spectacular cliffs and high mountains. Not only is this an optimal place to witness the Northern Lights, but the new path leads to 18 geothermal pools and summertime cultural and musical events in 17 communities and 21 fishing villages. Discover things to do and places to stay and much more at Visit North Iceland.
Free things to do in Iceland
Take a free City Walk tour to learn about the history of Reykjavik while strolling through some of the most beautiful neighborhoods in the city.
Elliaardalur Valley and its beautiful river Ellidaa is said to be the only salmon fishing river in the world that flows through a capital. This huge nature reserve is an ideal spot to stroll or bike to waterfalls at every turn. It’s about a 15-minute bus ride from central Reykjavik.
Thermal springs are abundant throughout the country and are free or cheap to visit (skip the Blue Lagoon). One that’s about a 40-minute drive from the city is in Reykjadalur. There’s a bit of a hike to get there (about 30 minutes) but it’s wonderfully secluded.
Visit HotpotIceland.com (or get the app) to find the best hot springs and pools.
If you’ve always dreamed of visiting Iceland, the bad news for Wow Air and its impact on the country’s tourism industry could be great news for you. Using some these tips, price out an itinerary and you may just find that for the first time in a long time, a trip to this beautiful country just might be in your budget!
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