In this blog post on our Iceland travel budget for one week, we write about all our costs for a one week trip to Iceland plus tips that you can adopt to cut down your costs. Read on to find out the best ways to save money in Iceland.

As usual, this blog post is a product of my love for travelling and writing. It is not sponsored in any way and all opinions expressed are my own.

With that said, let’s begin!

Iceland is a dream destination to visit (one of our highlights from 2019) with amazing vistas and mind blowing scenery but there is no getting away from the fact that it is also one of the most expensive countries on the planet to visit. While we have written a detailed travel guide on One week in Iceland along with all the Iceland travel tips for first time visitors, i wanted to write about one of the most important aspects of visiting Iceland: the Iceland travel budget.

It is not really a destination for budget travelers. Till date, we had only traveled within Asia (mostly in  Vietnam, Cambodia and Thailand. So Iceland was a giant leap for us budget wise. Everything from the food, accommodation, transportation and activities will add up to make your budget pretty high. We had researched a lot before the trip so we knew it was going to be very expensive. In fact Iceland is the most expensive country we have visited till date.

To give you an idea of how much you should budget for your trip, I have compiled a list of all our expenses. This Iceland travel budget for one week will help you in planning your budget as well as make you well prepared for the costs. Along with that we have listed quite a few tips that will help cut your travel costs. 

NOTE: These costs are for 2 people.

Want some serious travel inspiration? Check out 25 of our most stunning Iceland pictures from our recent trip. Wanderlust guaranteed ! And after getting inspired, plan your trip to Iceland using our complete guide for one week in Iceland.


There is no getting away from the fact that Iceland is one of the most expensive countries in the world which we already knew and had budgeted accordingly. Our Iceland travel budget for one week was Rs 2,28,544 or 3180 USD.

This amount includes accomodation, food, drinks, transportation, activities and souvenir shopping.  However, this amount DOES NOT INCLUDE flights, visa and travel insurance. We are Flashpackers AKA Mid range travelers. Our average daily budget turned out to be approx 450 USD/day for the both of us or 225 USD / day / person. We spent a major chunk of our travel budget on all the activities that we wanted to do. A rough daily travel budget would look something like this:

  • BUDGET TRAVELERS:        150-180 USD/day
  • MID RANGE TRAVELERS:  200-250 USD/day
  • LUXURY TRAVELERS:         > 300 USD/day

Now that we have revealed our total Iceland travel budget for one week, let’s check out the category wise breakdown of the total trip budget.


what to do in reykjavik for one day

Reykjavik guest house was a great budget option that we found right in the heart of Reykjavik. A cute little shared apartment that was clean and had all facilities like a fully functional kitchen. We spent only one full day in Reykjavik. The rest of the time we basically used the place to spend the night after returning from our trips. We also used the place for storing our luggage while we were out exploring the rest of the country. I don’t think there is much reason for splurging on accommodation in Reykjavik since you will be out exploring for the major part of your holiday.

NOTE: We spent 2 nights in the South coast and 1 night in the west coast and the cost of these nights was included in our tour charges.Will be writing more about this below.

BUDGET TIP 1: SHUN TRADITIONAL ACCOMODATION AND OPT FOR TENTS OR CAMPERVANS. You can make your hotel costs Zero by avoiding hotels altogether. Pick up tents and camp overnight for free at designated sites throughout the country. The other option is to rent campervans which are better for winter. Though campervans don’t come cheap, they take care of your transport plus lodging both and are are cheaper than guided tours. This company has a lot of good reviews if you want to go down the campervan route.


  • FLYBUS tickets to/from the airport: 7494 Rs/ 94.8 euro/103 USD
  • Transfer to/from the Blue lagoon: 86 USD/6192 Rs. We did this booking through the BLUE LAGOON WEBSITE.

Since we had booked tours for exploring the country, we did not have to spend anything extra on transportation as everything was covered in the tours. We explored Reykjavik by walking.

BUDGET TIP 2: RENTING A CAR. This is a tip that comes under both transportation and activities. If you drive and explore yourself, the total costs are going to be quite less than guided tours. Since most of the attractions in Iceland are free to visit, you can tent at designated camping sites and spend money only on the car.

However, if you add activities like glacier hikes/boat tours you will have to pay for them. It is best to rent a 4 X 4 for exploring Iceland especially if you are planning on going up to Northern Iceland or if your trip is in winter.

You can compare car prices in THIS WEBSITE and you can rent cars using This site.Alternately, in case you don’t fancy tenting and want proper rooms, you can rent cars as well as have your accomodation arranged using THIS COMPANY or This one.Do remember to factor in the fuel costs which are quite high (270 ISK/litre).

ACTIVITIES: Total= 1,53,600 Rs/ 2134 USD

glacier hiking cost in iceland

This tour included 2 nights accommodation in the South coast with breakfast at NICE HOSTEL (we are actually in love with this place!) , a highly comfortable mini bus along with an English speaking guide/driver and all the sightseeing in the South and the South east coast by road. The unique activities included were a guided glacier hiking and a boat tour through the floating icebergs in the Jokularsson glacier lagoon. Pick-ups and drop offs were at the bus stand nearest to your accommodation in Reykjavik.


This tour included a night’s stay in Borgarness (Snaefellness peninsula) with breakfast along with a comfortable mini bus, English speaking driver cum guide and all the sightseeing in the west coast. The special activities included in the trip were an underground tour of a volcanic lava cave and entry for Krauma hot water springs and spa.

BLUE LAGOON Rs 13,500/USD 188 

This price was the entry level price at BLUE LAGOON and included 2 complimentary drinks (one for each of us) and two towels. The blue lagoon has a sort of dynamic pricing system in which the number of people and time of the day decides the pricing. If you go at non peak hours like after 7 pm, you can get lower prices.

As you can see, we allocated most of our budget for our activities. We happily adjust with accommodation and flights if it means we can spend more on experiences. So we had no qualms about spending this much on these activities. Being independent travellers, we wanted small group tours instead of big bus tours and we booked both of our tours with Nice Travel (through GUIDE TO ICELAND website).

The tours were amazing and we loved both of them and strongly recommend NICE TRAVEL if you are looking for guided tours with small groups as well. The tours ran on time and were efficiently managed. The number of people in the group was limited to 15 (On one of the days we were only 8!!)

We got plenty of time at each of the sights to explore at our own pace plus lots of additional stops which were not included in the original itinerary. Trust me when I say that these prices were pretty reasonable compared to lots of other tour operators out there. If you chose private tours, the prices are going to be double/triple of these prices.

blue lagoon cost

As for Blue lagoon, we were very sure that we wanted to visit this place after having come all the way from India. Despite it’s reputation with regard to crowds and prices, we are very happy we experienced bathing in the milky blue hot water. The place really is beautiful. Blue lagoon is not cheap but we were well prepared for the prices and had made sufficient arrangements in our travel budget for this activity. If you want to cut down some costs, you can very well skip Blue lagoon for other cheaper/free hot springs out there.

BUDGET TIP 3: SKIP THE BLUE LAGOON. If you are travelling with a tight budget, it is best to skip the Blue lagoon for other cheaper/free hot springs like the SECRET LAGOON instead. Note that the Secret lagoon is no longer a secret and big bus tours regularly show up at the place with lot’s of tourists! If you your plans include a visit to Northern Iceland, visit the Myvatn hot baths instead. 

FOOD: TOTAL = Rs 16,350/ USD 228

iceland budget tips
skyr cost in iceland

The major components here were:

  • Precooked meal packets from India: Rs 3850/USD 55 
  • Grocery shopping at Bonus Supermarket: Rs 4500/USD 63
  • One Lunch in the Snaefellness peninsula(for two): Rs 4000/ USD 55
  • Miscellaneous snacks/coffees/skyr/hot dogs etc: Rs 4000/USD 55 

To keep our food costs down, we avoided eating out most of the time. We had bought quite a few precooked meals from India (rice/ khichdi / lentils/curries) and these were our de facto dinner choices. After a long tiring day of sightseeing we really needed our carbs! We have included those prices here to reflect the true amount that we spent on meals.

Apart from that, groceries from Bonus which included packaged sandwiches and instant meals like noodles/pasta, Skyr and desserts like donuts and croissants was what we depended on for keeping us filled during our tours. Gas station hot dogs, coffees and soups were the other items that we snacked on.

BUDGET TIP 4: COOK YOUR OWN FOOD. This is the best tip I can give you. Eating out is very expensive in Iceland and eating out twice a day even more so. It is best to cook your own food as that will really keep your budget in check. 

BUDGET TIP 5: DRINK THE TAP WATER. Tap water is fresh, clean and safe to drink in Iceland. Most importantly, it is FREE. So carry your own water bottle everywhere and refill.


  • Coffee in a gas station/small café: 800 ISK/400-500 Rs/6-7 USD
  • Hot Dog in a gas station: 400-500 ISK/200-300 Rs/ 3-5 USD
  • Soup with bread: 600-700 ISK/ 350 -400 Rs/5-6 USD
  • Skyr: 300-400 ISK/150-200 Rs/2-3 USD
  • 1 beer Can: 1100 ISK/600-700 Rs/8-10 USD
  • Packaged sandwiches/Noodles @Bonus: 700-1000 ISK/400-600Rs/ 6-8 USD
  • Box of donuts/croissants@ Bonus: 600-800 ISK/350-500 Rs/5-7 USD

BUDGET TIP 6: SHOP AT BONUS SUPERMARKET. Bonus is the best budget supermarket in Iceland and a great option for stocking up on those groceries for cooking. They also have a lot of ready to eat packaged meal options at reasonable prices. Most of the time we used to buy packaged sandwiches from Bonus and take them with us while travelling in the countryside for a picnic lunch instead of eating at restaurants.

DRINKS: Rs 5797 / USD 80

Out of this, the major amount was spent in the duty free picking up wine and scotch. Apart from this, we spent on a couple of drinks at the Krauma hot springs.

BUDGET TIP 7: BUY YOUR ALCOHOL IN THE AIRPORT DUTY FREE. Iceland has a strange relationship with alcohol. Until the 1980s prohibition was in place and it was only later that some rules were relaxed. Today, alcohol is available but very expensive. Cut down your alcohol and you are gonna spend a lot less on your meals. If you like your drink, stock up at the airport duty free.

SOUVENIR SHOPPING: 17,047 ISK/ 9,761 Rs/ 136 USD

We love picking up small souvenirs wherever we go and though Iceland was expensive we did buy a few items. This included postcards, fridge magnets, a couple of troll figurines and a few soft toys.

BUDGET TIP 8: DO NOT FORGET YOUR VAT REFUND. If your purchase exceeds 12,000 ISK at any of the shops, get a VAT refund form and receipt signed from the shop. Hand this along with your credit card details at the VAT Refund counter of Keflavik airport to get your tax refund.

So this was our detailed post on our Iceland travel budget for one week. As you have probably known by now, Iceland is not a cheap destination. But saving hard and making use of the tips listed here will help you make it to this bucket list place without going broke. Do you have any tips to share? Share your views in the comments!



tips to save money in Iceland