Iceland tops the charts on many bucket lists. For a nature and outdoor lover, it is a dream destination. Like all Nordic countries, the cost for a trip to Iceland is not cheap. We visited Iceland in June of 2023 and this post is a detailed account of our Iceland Trip Cost. Do note that this is not a budget travel guide to Iceland. It does give you a step-by-step guide on how to plan a road trip around Iceland.
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Is Iceland expensive?
YES. No ifs and buts. A trip to Iceland is expensive.
Summer is the best time to take a road trip to Iceland, as everything is open, weather is pleasant, there are tons of tours are running, and the roads are in much better condition. There are so many things to do in Iceland in summer. To save money in general, it’s best to plan a trip to Iceland during spring or fall. It is the shoulder season.
Our travel style in Iceland
Your Iceland vacation cost will vary depending on your travel style. Here is the way we usually do family travel. We usually stay at comfortable hotels. For Iceland, we dropped the level down one notch. For most parts of the trip to Iceland in June, we stayed at mid-budget hotels. We only splurged once at a luxury hotel towards the end of the trip. We used Booking.com for all our hotel bookings in Iceland
We did not eat at supermarkets in Iceland. Though that is a good way to save some money: to pick up a sandwich at supermarkets / convenience stores. We ate at nice restaurants and cafes through the trip. In Reykjavik, we let go of our booking at a Michelin-star restaurant but probably spent the same amount drinking in 5 different bars at Laugavegur street.
Our style of travel is usually do-it-yourself for activities. We did a self-drive road trip through the country and did short hikes like the Glymur waterfall hike by ourselves. But Iceland does need paid tours at many places, and these can be expensive. We did not splurge on any fancy plane or helicopter rides, yet spent a lot of money on activities. I would say some of these were once-in-a-lifetime experiences, and totally worth the cost.
Iceland Trip Cost
I have shown the cost estimates for a 7-day trip to Iceland. This will help you in planning your budget for Iceland. I have also included the amount we spent on each category: car rental, hotel, food and activities. Flight cost would vary hugely depending on where you are coming from, that I have left it out altogether.
Car rental + Fuel
Car rental is essential for a road trip to see the country, with limited public transport available in Iceland. First you would need to decide whether you want a regular sedan or a 4WD. Get the best car deals here!
An alternative renting a car and booking a hotel is to rent a Camper Van. No place better than Iceland than to rent a camper van. A fully-loaded model with Cozy Campers would be approximately twice the cost of renting a standard car. But with the savings on hotel rooms, your overall Iceland vacation cost would be far lower. There are amazing campsites in Iceland with stunning natural scenery, so that’s a plus! Renting a campervan is great if you are considering venturing into rugged, wild and sparsely populated Westfjords region in northwestern Iceland.
Car Type
The rental pricing would differ significantly depending on the car type (economy cards, 4WD, family cars). If you are going around the ring road only in spring or summer months (April to September), any car would do. A 4WD is needed only for off-roading or getting on F-roads (essentially unpaved tracks in Iceland). Like for a trip to Landmannalaugar in central Iceland. Also, factor in additional driver fee.
The rental pricing would also vary considerably depending on the season. We went in mid-June and this would be peak season pricing. In summer time, an economy car rental including full insurance protection would cost about EUR 110 – 130 per day. This would jump to EUR 140 – 170 daily for a 4WD.
Car Insurance
We spent a lot more on car insurance than expected. I recommend you to take full insurance that covers windy conditions, damage from sheep and other animals, ash and sand protection, gravel protection, and what not. Iceland has a high risk of sustaining damages to vehicles due to road and weather conditions.
Fuel cost
You have to add fuel cost to this. Fuel is expensive in Iceland, the second highest in the world! It is about 2.2 EUR per litre. For a 7 day trip, you may end up driving about 1500 km or 620 miles at the minimum. You can consider about 65 to 70 litres of petrol is required to run 1000 km. That would mean EUR 230 for about 1500 km (105 litre), or 620 miles (and 28 gallons).
You can use this useful calculator to estimate fuel for your road trip: Fuel calculator
Car parking and Toll fees
Many of the sites in Iceland have no entry fee but there is paid car parking. You will end up paying for parking outside most sites: Thingvellir national park, Kirkjufell, Hverir geothermal area, Seljalandsfoss to name a few. There are very few toll charges though. I remember only one tunnel from Akureyri to Husavik where we paid approx. EUR 11.
Total Cost
Total car cost for a 7 day trip: EUR 1120 [We paid EUR 2035 for a 4WD for a 12 day road trip]
Car rental – EUR 560 (for an economy category car)
Full Insurance: EUR 280
Fuel: EUR 230
Car parking and the tunnel ride: About EUR 50
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Hotel cost
Ours was not a budget trip, we didn’t stay at hostels or guesthouses in Iceland. That said, we also didn’t splurge on 5-star accommodation except for 2 nights at ION Adventure in Nesjavellir. You can expect an average of EUR 280 to 400 per night for a family of 2 adults and 1 child. This pricing is for summer time. For a couple only, expect this to be 20% cheaper.
If you are traveling with 2 children, the cost would go up. Many hotels will insist on 2 separate rooms so you may have to look for apartments to be in the same price range. Also, an apartment cost would be much lower than that of a hotel room, or a 2-bedroom apartment may work out to be the same as 1 hotel room. It may be a better bet for a family with 2 kids or more.
In places like Hellner in Snaefellsnes Peninsula or Akureyri / Myvatn in North Iceland, you will get a good hotel room for about EUR 200 to 300. In South Iceland, which gets more tourists, this would be around EUR 300- 350, especially during summer months of June, July and August.
We splurged only at ION Adventure, the family suite per night was upwards of EUR 600. Outside of this, the average accommodation cost for us (family of 2 adults and 1 child) was EUR 340 per night.
So for a 7 day trip to Iceland, average cost for 2 people sharing a room would be EUR 2100 (average of EUR 300 per day).
Food and Drinks
Alcohol is quite expensive in Iceland. We bought 2 bottles of whiskey at the Zurich airport for the trip. There were only 2 occasions where we ordered cocktails at a bar in Iceland. Of the two, I would not give up the experience of pub-hopping at Laugavegur street in Reykjavik.
Like I mentioned earlier, we ate at nice restaurants and cafes through out the trip. Though there were occasions like the day in Vik, where we had no time between the ATV Tour and the Katla Ice Cave Tour, and we bought sandwiches for a quick bite from a convenience store. Super cheap!
You can take an approximate cost of EUR 20 for mains at a nice restaurant for fish or duck or lamb (beef would be more expensive and vegetarian options a bit cheaper than this). This would be a EUR 30 meal with some salad or a drink in general. We spent a total of EUR 2010 on 3 people, about EUR 670 per person excluding a pricey dinner. We splurged at Silfra restaurant at ION Adventure (mains for EUR 50 to 60). Most of our breakfasts were included in the room cost.
So for a 7 day trip for 2 persons, the cost would be EUR 700 on food. This is assuming that your hotel covers the breakfast in its room pricing. Count alcohol as additional to this.
Tours and Activities
We splurged quite a bit on Iceland day tours. Activities in South Iceland like glacier hike, boat ride on an ice lagoon, and an ice cave tour are expensive but also unique experiences. Prices mentioned below are for an adult. These were much lower for many activities for our daughter.
Activities cost per adult for the following:
Blue Lagoon Comfort Pass: EUR 58
Whale watching Tour: EUR 77
Vatnashellir Lava Cave Tour: EUR 31
Glacier hiking in Vatnajokull: EUR 100
[We spent a little extra for shoes. They will check if the shoes are water-proof hiking shoes, appropriate for a glacier hike. This would be about EUR 200 if you go for a longer, extreme adventure version that includes ice climbing.]
Glacier Hiking combined with Jokulsarlon boat ride, the combo tour is about EUR 180.
ATV Tour in South Iceland: EUR 118
Katla Ice Cave tour: EUR 193 (expensive but an unique experience)
Icelandic horse riding: EUR 73
Landmannalaugar hike: EUR 171
Perlan Museum Entry: EUR 34
Total cost for activities per adult is EUR 855 per adult. Like I said earlier, the tours are expensive but make for lifetime memories. IF you HAVE to cut out something, I will be ok not doing the ATV Tour and the horse riding. We paid a total of EUR 1945 for all activities and tours in Iceland. You can put an estimate of EUR 1100 for all activities for a 7-day trip for 2 adults.
Summary of Trip to Iceland: Cost for 2
Here is the total for what we paid for our 12 day ring road itinerary in Iceland, excluding flights and some miscellaneous items. This is for 3 people (2 adults and our 12-year old daughter) sharing a room.
Car rental + Fuel: EUR 2035
Hotels cost: EUR 5175
All meals: EUR 2010
Activities: EUR 1945
Total: EUR 11,165
Here is my cost estimate for a 7-day trip to Iceland for 2 adults during peak summer time –
Car rental + Fuel: EUR 1120
Hotels cost: EUR 2100
All meals: EUR 700
Activities: EUR 1100
Total Iceland Vacation Cost Estimate: EUR 5,020
Like I mentioned earlier, I have excluded flights in the above estimate.You can add the flight cost and plan your Iceland trip!
Guide to planning a road trip to Iceland
Here is a step-by-step guide on how to plan a road trip around Iceland –
1. Book your flight tickets
This is the first step towards your dream Iceland holiday. Lock in the flights as early as possible.
2. Check on visa requirements
Check if you need a Schengen visa to enter Iceland. If yes, apply for this at least 3 months before the trip.
3. Do your research on Iceland to build a rough itinerary
Despite being a small country in size, Iceland offers a mind-boggling range of destinations and activities. Depending on the time at hand and your interests, you need to figure what you will cover on your Iceland trip. You can read some awesome books about Iceland while planning your trip.
If you have 10 days or more, check out this Iceland ring road itinerary.
If you have 5-7 days in Iceland, focus on a couple of regions in the country.
4. Book your car rental
Decide on your road trip route and figure if you will need a 4WD or not. Any car will suffice on the ring road in Iceland. A 4WD is needed only for off-roading or getting on F-roads (these are unpaved tracks in Iceland). And then book a car rental many months in advance. For the peak summer season, we booked our car rental 6 months in advance.
5. Book your accommodation
Based on your itinerary and requirement, figure which hotels or apartments you need to book. The availability will keep going down and prices will keep going up as you get closer to your trip, so do book these much in advance. We booked all accommodation for our trip 6 months before the trip.
6. Book your activities
Some of the popular tours, especially near Reykjavik and in South Iceland get sold out in peak season. So do your research and lock in the activities you want to do. Book them at least 2 months in advance.
7. Travel Insurance
Closer to your trip, do buy travel insurance that covers all family members.
8. Packing List for Iceland
Weather changes a lot in Iceland. It can rain, be windy and stormy even in summertime. It is important to pack for all weather type. You will need a comprehensive packing list for Iceland. Don’t put this away for last-minute, you may have several shopping requirements
Travel Resources for Iceland
Rent a car to drive around in Iceland. Get the best car deals here!
Use Kiwitaxi for airport transfer if you are not renting a car immediately.
We used Booking.com for all our hotel bookings in Iceland
Get an eSim for your trip for effortless and cheap data connection from Airalo.
Planning a trip in Iceland?
For a full ring road itinerary for 10 to 14 days, see The Ultimate Iceland Ring Road Itinerary
If you have 5-7 days to explore Iceland: Iceland in 5 to 7 days: Three Epic Itinerary Options
Best Iceland Tours: Day Tours for attractions + adventure
For the best things to do in Iceland: Top Things to do in Iceland in summer
What to pack for Iceland: Iceland Packing List
For exploring the capital, see Reykjavik sightseeing
Check out Is the Golden Circle route in Iceland worth the hype?
For travel tips on specific regions, read North Iceland Highlights, West Iceland attractions, Iceland South Coast Itinerary and Day Trip to Landmannalaugar
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Have you visited the Land of Fire & Ice? What has been your favorite destination or experience there?
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Very informative post! It is amusing how you started the post saying that Iceland is expensive, no ifs and buts.
ha..ha…well, if you sleep in a tent and hitch hike and eat at gas stations, it is not! But then it’s also not a holiday!
Iceland is so high on my bucket list so this break down was veryyy helpful!
Hope you get to visit someday! It is a bucket list destination.