BenThere Travel

Iceland Travel Costs: What We Actually Spent on a 10-Day Ring Road Trip

Iceland was expensive, but not in a way that felt random.

We knew going in that Iceland would cost more than many trips through Europe or the United States. What became clear over ten days on the Ring Road was where the money actually goes: lodging, fuel, restaurants in Reykjavík, guided activities, and the basic logistics of moving people and goods around a remote North Atlantic island.

We also did not build the trip around the cheapest possible lodging. We stayed in private Airbnbs, chose places with kitchens and space, added one spontaneous hotel night, drove the Ring Road, cooked some meals, ate gas station food without shame, and paid for the experiences that actually required a guide.

So this is not a “how cheap can Iceland be?” post. It is a realistic look at what we spent, where we spent more than necessary, where you can save, and how to budget honestly for the kind of Iceland trip you actually want to take. If you leave Iceland without eating at least one hot meal at an N1 or Orkan gas station outside of Reykjavík, you have made a mistake — and we’ll get to that. But first, here’s the full breakdown.

Colorful houses in central Reykjavík, Iceland
Reykjavík is one of the most expensive cities in Europe — but the costs drop significantly once you leave the capital. Photo: Christine Zenino, CC BY 2.0

The First Thing to Understand: Iceland Is an Island Nation

Everything in Iceland is imported, because Iceland cannot grow most of what it eats. The same agricultural economics that make Norwegian and Swiss food expensive apply here, but with the added logistical reality that goods travel by ship or air to a country of roughly 380,000 people on a volcanic island in the middle of the North Atlantic. Labor costs are high. The currency (the Icelandic króna) fluctuates but generally makes Iceland feel like a premium destination for American and European visitors. The infrastructure to support millions of tourists arriving annually is expensive to maintain on an island that can receive genuinely catastrophic weather at any point in the year.

None of this is arbitrary. But it helps to understand why things cost what they do rather than just reacting to each price as an imposition. Iceland is not trying to extract money from you. It is a place that costs a lot to live in and, by extension, to visit. Once you accept that, the question shifts from “why is this so expensive?” to “where does the money actually need to go, and where can I do better?”

DID YOU KNOW? Iceland consistently ranks in the top 5 most expensive countries in the world for cost of living, according to surveys by Numbeo and the Economist Intelligence Unit. Restaurant prices in Reykjavík are roughly 2–3x what you would pay in comparable U.S. cities, and alcohol — taxed aggressively — is one of the most expensive categories in the country. The state-run Vínbúðin liquor stores are significantly cheaper than buying at a restaurant bar.

Getting There: Flights and Entry Costs

Iceland does not have a tourist entry fee, and there is no tourist tax beyond what is typically included in accommodation pricing. The main cost to get there is the flight. Iceland benefits from geography — it sits almost exactly in the middle of transatlantic flight paths, which is why Keflavík International Airport is a hub for Icelandair and was the original basis for the old Wow Air stopover model. Direct flights from the U.S. East Coast run $500–$900 round trip in off-season and $700–$1,200+ in peak summer, depending on timing and how early you book. From Europe, you can sometimes find Iceland on budget carriers for $150–$400 round trip.

Keflavík is about 50 kilometers from Reykjavík. The Flybus airport transfer is around $25–$35 per person one-way depending on your destination. A taxi or rideshare is significantly more — budget $80–$120 for a private car to the city center. Many people rent cars at the airport, which makes the transfer question irrelevant but adds the car cost from day one.

Route 1 the Ring Road crossing Iceland landscape near Hverarönd in north Iceland
Route 1 — the Ring Road — crosses Iceland’s interior passing some of the most remote and dramatic landscapes on earth. Driving it yourself is one of the best ways to control costs once you’re there. Photo: Jakub Hałun, CC BY 4.0

Getting Around: Car Rental and Fuel

Unless you are doing a Reykjavík-only city trip, you need a car. Iceland is not set up for tourists without wheels, particularly outside of Reykjavík. Bus infrastructure outside the capital is limited, tour prices for individual attractions add up fast, and the whole appeal of Iceland — the ability to pull over on a gravel road because you spotted a waterfall that isn’t on any map — only exists if you are driving yourself.

Car rental is expensive. A basic sedan (a Dacia Sandero or similar) runs $60–$100 per day in shoulder season and $80–$140 in peak summer. You do not need a 4WD vehicle unless you are driving F-roads (highland interior routes), which require a 4WD and are only open in summer. For the Ring Road and all main paved roads, a standard car is fine. Add insurance — Iceland requires additional coverage for gravel damage, which basic international policies often do not cover. Gravel shield coverage runs $15–$25/day extra and is worth it given how frequently passing trucks throw rocks on Ring Road gravel sections.

Fuel is expensive and the island is large. The Ring Road is about 1,332 kilometers total. A sedan getting 35 mpg will use roughly 25–30 liters per 300km segment. At approximately $2.50–$3.00 USD per liter for petrol (prices fluctuate with global oil and the króna), a full Ring Road loop will cost $200–$300 in fuel. Diesel and EV options are available and cheaper per kilometer but require more planning around fill-up locations. The App Store has several Icelandic fuel price apps — use them. Prices vary by station, and some of the automated country stations are notably cheaper than brand-name stations in Reykjavík.

DID YOU KNOW? Fuel stations in rural Iceland often operate as unmanned 24-hour pumps that require a credit card with a PIN. American credit cards with no PIN (chip-and-signature only) can fail at these automated pumps. Before you leave for Iceland, contact your bank to set a PIN for your credit card — it takes 5–7 business days and can save you from being stranded at an empty pump late at night on the Ring Road.

Food in Reykjavík: Yes, It Is That Expensive. Order Anyway.

Let’s be honest with each other. Restaurant food in Reykjavík costs what restaurant food in New York or London costs, sometimes more. A main course at a sit-down restaurant runs $25–$45 USD. A burger and fries at a casual place is $20–$30. A beer on a Friday night in the bar district is $12–$18. A decent two-person dinner with a glass of wine each will run $100–$150 before tip. This is not extraordinary by global capital standards, but it is jarring if you are arriving from somewhere where a nice dinner for two is $60.

That said: Reykjavík has genuinely great food. The lamb is exceptional — Iceland’s free-range sheep are some of the best-raised animals in the world, and the lamb soup (kjötsúpa) we ordered on night one was absolutely worth whatever we paid for it. The seafood is excellent and fresh. The hot dogs (pylsur) at Bæjarins Beztu, which has been operating since 1937, cost about $4–$6 and are legitimately one of the best things you’ll eat in Iceland. Do not leave Reykjavík without one. The price-to-satisfaction ratio on that single hot dog is probably the best in the country.

Nicole standing on the rainbow-painted Skólavörðustígur street in Reykjavík with Hallgrímskirkja church visible in the background
Nicole on Skólavörðustígur — the Rainbow Street — with Hallgrímskirkja in the background. Photo: BenThere Travel

The practical advice: budget one or two proper restaurant meals in Reykjavík. Pick them deliberately. The rest of the time, eat well by other means — grocery stores, gas stations, coffee shops. The food culture in Iceland is legitimately good and worth experiencing properly. You just do not need to do it at every meal to experience it.

DID YOU KNOW? Iceland has strict alcohol laws that make buying booze at restaurants particularly expensive. The state-owned Vínbúðin liquor stores (about 50 locations nationwide) sell wine, beer, and spirits at roughly half the price of a bar or restaurant. If your Airbnb or guesthouse has a kitchen, buying a bottle of Icelandic gin or a six-pack from Vínbúðin before dinner is a significant cost savings over drinks at a restaurant.

The Gas Station Secret Nobody Tells You

This is the section we wish we had read before going. Outside of Reykjavík, the Ring Road is dotted with N1 and Orkan gas stations — big travel-plaza style stops with fuel, a convenience store, and a hot food counter. These food counters are not gas station food in the American sense. They are legitimate, hot, reasonably priced meals — the kind of place where you order at a counter and get a basket of something genuinely good in a few minutes. Lamb soup. Hot sandwiches. Soup with fresh bread. Plokkfiskur (the Icelandic fish stew). Skyr and granola. Hot dogs that rival the ones in Reykjavík.

N1 gas station in Reykjavík Iceland on Ægisíðu street
N1 is Iceland’s most common gas station chain — and its hot food counters are a genuinely excellent and affordable meal option, especially outside Reykjavík. Photo: Steinninn, CC BY 4.0

The prices at gas station food counters run $10–$18 USD per person for a full hot meal. Compare that to $30–$45 at a sit-down restaurant in the same region. The quality difference is often minimal, especially for traditional Icelandic dishes like lamb soup — the gas station versions are frequently made from the same ingredients by the same local suppliers. You are paying for the tablecloth at the restaurant, not the food.

We ate at gas stations on the Ring Road almost every day we were on the road, and we were never disappointed. The N1 at Vík, the Orkan in Höfn, the station outside Akureyri — consistently good, consistently honest portions, consistently way more affordable than sitting down somewhere. This is not a budget-travel compromise. It is how a significant portion of Icelanders themselves eat when traveling the Ring Road. It is the local move.

N1 service station at Staðarskáli Iceland along the Ring Road
N1 stations like this one at Staðarskáli are often the only services for dozens of kilometers on remote Ring Road sections. They’re lifesavers for fuel and genuinely good for food. Photo: Drumstick21, CC BY-SA 4.0

Groceries: The Closest Thing to a Hack

If you are staying in anything with a kitchen — an Airbnb, a guesthouse with a communal kitchen, a camping cabin — groceries are your best financial friend in Iceland. The main supermarket chains are Bónus (cheapest, recognizable by the giant yellow pig logo), Krónan, and Nettó. There is also Hagkaup for higher-end selections. In Reykjavík you will find all of these. On the Ring Road, Bónus stores appear in most of the larger towns — Selfoss, Hveragerði, Vík, Höfn, Akureyri, and others.

Grocery prices in Iceland are not cheap in absolute terms. They are notably more expensive than the U.S. or most of Europe. A loaf of bread is $3–$5. A liter of milk is $2–$3. Ground lamb or fish runs $8–$15 per kilo. A block of skyr (the thick Icelandic yogurt) costs $3–$5 and is filling enough to substitute for a meal. The vegetables are imported and priced accordingly — expect to pay double what you would at home for a simple salad kit.

But compare that to restaurants: even a modest grocery shop that lets you make your own breakfast and pack a lunch will save $30–$60 per person per day compared to eating every meal at a restaurant. Over a 10-day trip, that is a real number. We cooked breakfast in our Airbnb almost every morning — eggs, skyr, coffee — and packed simple lunches for the car. Dinner was the meal we prioritized, and doing the other two ourselves made the dinner budget comfortable.

DID YOU KNOW? Skyr is not yogurt, technically — it’s a cultured dairy product closer to a soft cheese with a yogurt-like consistency. It’s been produced in Iceland since the Viking Age, and it’s one of the best travel foods in the country: high in protein, very filling, available at every grocery store and most gas stations, and a nutritional staple that most Icelandic athletes and workers eat daily. We ate it for breakfast almost every day and never got tired of it.

Accommodation: Airbnb vs. Hotels

Hotels in Iceland are expensive. Comparable properties to what you would pay $120–$180/night for in the U.S. frequently run $200–$350/night in Iceland, particularly in peak season and in popular areas like Reykjavík, Vík, and Höfn. The higher-end hotels run $400–$600/night. There are guesthouses (gistiheimilar) that are more affordable — typically $100–$180/night for a private room — but availability is limited and they book out months in advance for popular travel windows.

We stayed in Airbnbs for most of the trip, and we’d do it again without hesitation. The prices were comparable to hotels for similar locations — meaning we were not paying less, necessarily — but the value was significantly better. A $180 Airbnb night in Iceland gives you an apartment: a full kitchen where you can make your own meals, a living room, often a second bedroom, a washing machine. A $180 hotel room gives you a hotel room. The arithmetic on this is simple: if you cook even two meals in the Airbnb kitchen, the effective cost of the accommodation is substantially lower than the hotel. Over a 10-day trip, that kitchenette pays for itself several times over.

The Airbnb market in Iceland also tends to put you in genuine residential apartments and houses rather than tourist-specific units. We stayed in a flat in Reykjavík that was a few blocks from where locals live, shop, and eat. That context — seeing how Icelanders actually spend their days — is part of why we travel, and it is easier to access through a short-term apartment rental than through a hotel in the tourist district.

What Our Airbnbs Actually Cost

Our Airbnb receipts tell the story better than a generic budget range.

For the three Airbnb stays we used as the backbone of the trip, the total came to $4,197.31:

StayDatesWhat We Paid
Thingvellir / Sandur area AirbnbOct. 7–10$1,905.77
Skaftárhreppur AirbnbOct. 11–13$893.54 net
Reykjavík AirbnbOct. 13–16$1,398.00
Total Airbnb lodging shown by receipts$4,197.31

That is not budget lodging. It is comfortable, private, two-person Ring Road lodging with kitchens and space. Compared with many trips in Europe or the U.S., the nightly cost was high. But the value was not just the bed. It was having a kitchen, room to unpack, laundry where available, and a place that made the trip easier instead of just cheaper.

For us, that mattered. We were not trying to backpack Iceland as cheaply as possible. We were trying to do a 10-day Ring Road trip comfortably, with enough flexibility to cook meals, pack food for long driving days, and recover between big weather-and-road days. The kitchens offset some of the food cost. The space made the long days easier. Our three Airbnb stays came to about $4,200 total — that is the honest number, not a generic range.

You Can Spend Less on Lodging Than We Did

Our Airbnb total should not scare anyone away from Iceland. We spent more on lodging because we chose private places with kitchens, space, and locations that worked for the trip we wanted.

There are more reasonable ways to stay in Iceland. If you are flexible, you can usually reduce lodging costs by choosing guesthouses instead of full apartments, smaller private rooms, shared bathrooms, hostels, campervans, farm stays, simpler cabins, or accommodations farther from the most popular South Coast stops. Booking earlier also reduces pressure — the South Coast in particular (Vík, Höfn) books out months in advance during popular windows, and last-minute flexibility costs money.

The biggest tradeoff is comfort and control. A full Airbnb gives you space, a kitchen, and privacy. A guesthouse or hostel may be cheaper, but you may give up room size, laundry, private bathrooms, or the ability to cook full meals. For travelers who are more budget-conscious than we were, Iceland can absolutely be done for less. For travelers who want private lodging in good locations during a Ring Road trip, the accommodation line can climb quickly.

Why We Still Chose Airbnbs

Even with the higher lodging cost, we would still choose Airbnbs again for this kind of trip.

The kitchen changed the economics of the day. Breakfast at home, coffee before leaving, skyr in the fridge, sandwiches or snacks for the car, and the option to cook dinner after a long weather day all mattered. Iceland driving days can be long, dark, wet, and windy. Having a real place to come back to was part of the value.

A hotel can be perfect for Reykjavík. A guesthouse can be a smarter budget choice. A campervan can be the right answer for a more adventurous traveler. But for the way we wanted to do the Ring Road, private apartments and cabins gave us more control over the day. That does not make them the cheapest option. It makes them the option that fit our trip.

DID YOU KNOW? Iceland introduced a tourist accommodation tax in recent years, applied to all paid overnight stays. The amount varies by municipality and accommodation type, but typically adds $3–$8 USD per person per night. This appears as a separate line item on your booking — it’s not hidden, but it’s easy to miss when budgeting. Factor it in when comparing accommodation costs.
Skólavörðustígur street in Reykjavík lined with colorful shops and guesthouses
Skólavörðustígur is home to many of Reykjavík’s guesthouses and boutique accommodations — but Airbnb apartments in the surrounding neighborhoods often offer better value with the bonus of a kitchen. Photo: Helgi Halldórsson, CC BY-SA 2.0

Activities and Attractions

This is where Iceland surprises people in both directions. Many of Iceland’s most spectacular experiences are free: the waterfalls (Skógafoss, Seljalandsfoss, Goðafoss), Reynisfjara black sand beach, the Diamond Beach, the Golden Circle viewpoints at Þingvellir and Geysir. Driving the Ring Road itself is free. Northern lights hunting — walking into a field at midnight and looking up — costs nothing. The landscape is public and accessible in a way that is one of Iceland’s great gifts to visitors.

The paid experiences add up fast: a glacier ice cave tour runs $106–$175 per person. Horseback riding is $80–$150 per person for a half-day. A whale watching tour out of Húsavík is $80–$120. A glacial hiking tour is $60–$120. A Northern Lights boat tour is $60–$100. A helicopter flight over a volcano is, as one might expect, significantly more. The general principle: the more specialized and guide-dependent the experience, the more it costs, and Iceland has a lot of specialized guide-dependent experiences that are worth having.

Our recommendation: budget $200–$400 per person for paid activities across the whole trip, spend that on the things that genuinely require a guide (ice cave, glacier hike), and do the free things — the beaches, the waterfalls, the geothermal pools, the road itself — on your own schedule. The balance of a 10-day Iceland trip should not be activity-heavy; the landscape does the heavy lifting.

A Realistic Budget: What a 10-Day Iceland Trip Costs

For two people doing Iceland the way we did it — Ring Road, private Airbnbs with kitchens, grocery breakfasts, gas station meals, a few restaurant dinners, and two or three paid activities — here is a realistic budget range:

Flights: $1,000–$2,000 total for two (varies enormously by origin and timing). Car rental + insurance: $800–$1,400 for 10 days depending on season and vehicle. Fuel: $250–$450 for a full Ring Road loop. Accommodation: $3,000–$4,500+ for a private-lodging Ring Road trip (our actual receipt total was $4,197.31 for three Airbnb stays; travelers using guesthouses, hostels, shared bathrooms, or campervans can spend significantly less). Food: $80–$140 per day for two people (mix of grocery, gas station, and two or three restaurant meals). Activities: $400–$700 for two people across the trip. Miscellaneous (parking, museum entrance, alcohol from Vín búðin, souvenirs): $300–$600.

Comfortable private-lodging total for two people, 10 days: approximately $6,500–$10,500+, including flights. That is the honest number for a Ring Road trip built around private Airbnbs, a rental car, a mix of grocery and restaurant meals, and two or three paid activities.

But that is not the only way to do Iceland. A more budget-conscious couple choosing guesthouses, shared bathrooms, hostels, or campervan travel, cooking almost all meals, and skipping some paid tours could bring the total down meaningfully. The biggest lever is lodging. Food matters, fuel matters, and activities matter, but the accommodation line is where the trip can swing by thousands of dollars.

Iceland is expensive. So are the other places that look like Iceland. Budget accordingly, spend strategically, and you will leave convinced it was worth every króna.

Why Iceland’s Expense Hits Different

There is a thing that happens on expensive trips where you track every purchase and wince at each receipt and come home feeling vaguely ripped off. We did not experience that in Iceland. That is actually how it went. The country has a way of being honest about its costs — nothing feels extractive or tourist-trappy in the way that some high-cost destinations can. The gas station lamb soup costs $12 because lamb is $12-per-bowl’s worth of ingredient in a country where lamb is the national protein. The glacier tour costs $120 because a guide went out in the snow to find the cave and the crampons and the insurance cost money. The prices track with reality. That does not make them small. But it makes them easier to accept.

Iceland also delivers. Every single thing we spent money on — the Troll Tours ice cave, the dinner in Reykjavík, the petrol that put us in front of Skógafoss at sunrise — delivered at the level the price suggested. There were no disappointing expensive experiences. The island is genuinely extraordinary, and you feel that on every drive, every hike, every morning where you wake up and look out the window and there is a glacier. You are paying for something real. Budget for it honestly, and go.

Practical Information

Currency: The Icelandic króna (ISK). Cards are accepted essentially everywhere in Iceland — it is one of the most cashless countries in the world. You rarely need cash. The exception is very small market stalls or remote farms selling direct. Your credit card’s currency conversion fee matters more than keeping ISK on hand.

Tax refunds: Iceland’s VAT refund system for tourists is straightforward and worth doing for any significant purchase. See the VAT Refund Guide section below for a full step-by-step breakdown of how it works at Keflavik Airport.

When to go: Summer (June–August) is most expensive for both flights and accommodation. Shoulder season (late April–May or September–October) offers better prices and smaller crowds. Winter (November–March) is cheapest for flights and accommodation but limits some activities — though it’s the only time for glacier ice caves, and the Northern Lights are prime.

Tipping: Iceland does not have a strong tipping culture. Restaurant staff are paid living wages and tips are not expected. Leaving a small amount (10%) is appreciated but genuinely optional — do not feel obligated, and do not let the absence of tipping culture make you feel you have underpaid.

Iceland VAT Refund: How to Get Money Back on Your Purchases

Iceland charges a 24 percent standard VAT rate on most goods — one of the higher rates in Europe. The good news for visitors: non-residents can get a significant chunk of that back on eligible purchases. We did this on our trip and had no problems. The refund ends up back on your credit card within a couple of weeks.

Here is how the process works:

Step 1: Look for “Tax Free” signs and ask in the shop. When you buy eligible goods — Icelandic wool clothing, souvenirs, outdoor gear — ask the store to complete a Tax Free form. In practice, most shops that sell to tourists already know this process and will offer the form automatically. If they don’t, just ask. Every store we dealt with was happy to do it. Minimum purchase to qualify is ISK 12,000 — roughly $85–$90 USD at the time of our trip — on a single receipt at a single store on the same day.

Step 2: Keep the goods unused until you leave Iceland. The refund applies to physical goods you are taking out of the country — not services, food, or restaurant meals. The items technically need to be unused when you go through customs, which in practice means don’t wear your new Icelandic wool sweater on the trip home before you’ve cleared the VAT desk.

Step 3: Do not check your luggage before visiting the VAT desk. This is the one most people miss. At Keflavik Airport (KEF), the VAT refund desk is located in the arrivals hall — not departures. You will see it when you first enter the terminal, opposite the car rental counters. Go there before you check in your bags, in case the agent needs to inspect the items. Allow extra time — 30 to 45 minutes before your check-in window is a reasonable buffer, though the actual process is usually quick.

Step 4: Present your documents. Bring your completed Tax Free form(s), original purchase receipts, and passport. For refunds under ISK 100,000, Arion Bank at KEF can validate your forms. For amounts over ISK 100,000, customs approval is required — a slightly longer process but still handled at the airport.

Step 5: Choose your refund method. You can receive your refund in cash (in various currencies), or request a credit back to the card you used for the purchase. We recommend putting all your souvenir shopping on a single credit card — when the agent asks how to return the refund, it is much easier to point to one card. The credit typically posts within two to three weeks.

A few additional tips:

  • You have three months from the date of purchase (plus the issuing month) to get your forms validated, so if you are on a multi-country trip you can still claim even if you leave and return.
  • If you are leaving Iceland by ferry from Seyðisfjörður rather than KEF, the ferry terminal has a VAT validation desk as well. Ask on board if you are unsure.
  • Services — including guided tours, rental cars, hotel stays, and restaurant meals — are not eligible for VAT refunds. Only physical goods you are taking home count.
  • The 11 percent reduced rate applies to food and books, so your grocery savings are not refundable through this program, but any wool, ceramics, outdoor gear, or clothing purchased in a store qualifies if you meet the minimum spend.
  • If you forget to claim at the airport, Planet Tax Free (one of the main processors) does offer a mail-in refund process, but you will need the stamped form. It is not worth skipping the airport desk if you have a meaningful amount to recover.

For most Ring Road travelers, the VAT refund is worth pursuing if you bought even one significant item — a wool sweater from 66°North or a handmade ceramic from a Reykjavík shop will easily clear the minimum threshold. It adds maybe 20 minutes to your airport arrival, and the refund is real money.

How to Spend Less Than We Did

You can absolutely spend less than we did. The easiest ways are:

Book earlier, especially for Reykjavík, Vík, Höfn, and the South Coast. Use guesthouses with shared bathrooms instead of full apartments. Consider hostels or campervans if that fits your travel style. Choose simpler rooms over scenic cabins or large private spaces. Cook breakfast and lunch almost every day. Eat gas station hot meals on driving days. Save restaurants for Reykjavík or one or two specific splurge meals. Skip paid tours that do not require a guide. Travel in shoulder season instead of peak summer. Stay slightly outside the most expensive tourist corridors when the driving distance still makes sense.

The biggest lever is lodging. Food matters, fuel matters, and activities matter, but the accommodation line is where the trip can swing by thousands of dollars. A traveler who trades full Airbnbs for guesthouses, smaller rooms, or campervan travel is doing the same Iceland. They are just protecting more of the budget for the experiences that made the trip memorable.

Iceland Cost Guide FAQ

How much does a trip to Iceland actually cost?

For a comfortable private-lodging version of a 10-day Iceland Ring Road trip, two people should realistically budget around $6,500–$10,500+ including flights. That is the honest range for the kind of trip we actually did: private Airbnbs, a rental car, a mix of grocery and restaurant meals, and two or three paid activities. Travelers can spend meaningfully less by choosing guesthouses, hostels, campervans, shared bathrooms, simpler rooms, fewer restaurants, and booking earlier. The biggest variable is lodging. Traveling in shoulder season (May or September) versus peak summer can also save $500–1,500 per person on flights and accommodation alone.

Is food in Iceland really that expensive?

Restaurant food in Reykjavík is comparable to New York or London — a sit-down dinner for two with a glass of wine each typically runs $100–$150. Outside the capital, gas station food counters (N1, Orkan, Olis) offer hot meals for $10–$18 per person and are genuinely good. Grocery stores are 40–60% less expensive than restaurants and are the best option if you have a kitchen. Eating smart, you can manage on $50–$70 per person per day.

Is Airbnb cheaper than hotels in Iceland?

Often not cheaper in raw price — comparable Airbnb apartments and hotels frequently cost similar amounts in Iceland. The advantage of Airbnb is value: you get a full apartment with a kitchen, which means you can cook meals and avoid restaurant prices. That kitchen difference effectively lowers your total daily cost by $30–$60 if you use it consistently.

What is the cheapest way to eat in Iceland?

Bónus supermarket for groceries (the yellow pig logo chain is Iceland’s budget grocery store), gas station food counters for hot meals on the road, and the Bæjarins Beztu hot dog stand in Reykjavík for an iconic $4–$6 snack. Skyr from any grocery store or gas station is one of the best value-per-calorie foods in the country.

Do you need travel insurance for Iceland?

Yes, strongly recommended. Iceland rescue operations are handled by the volunteer ICE-SAR organization, and emergency rescue costs — helicopter, mountain rescue — can run tens of thousands of dollars without coverage. Standard travel insurance that includes emergency evacuation is worth the $80–$150 per person. Also verify your car rental coverage for gravel damage, which is common on Ring Road sections and often excluded from basic international policies.

Is Iceland worth the cost?

Yes. Iceland is expensive in the same way that New Zealand and Norway are expensive — the price tracks with the quality of the environment, infrastructure, and safety standards. The landscape is genuinely unlike anywhere else in the world, the experiences are well-organized and well-run, and the worst-case scenarios (weather, mechanical issues, getting lost) are better managed here than almost anywhere we have traveled. Budget for it honestly and it will be worth every dollar.

The Bottom Line

Iceland costs what it costs. That is the honest bottom line. The sheep on the Ring Road graze under volcanic peaks next to thousand-year-old glaciers, and nobody is pretending that access to that landscape should be cheap. What you can do is be strategic: drive yourself instead of taking tours, stay in apartments with kitchens, eat gas station lamb soup between restaurant splurges, buy your wine at Vínbúðin, and book in shoulder season. Do those things and the trip becomes financially manageable. Skip all of them and eat every meal at a sit-down Reykjavík restaurant and stay in city-center hotels and you will spend significantly more and have a similar experience.

We spent what we spent and have no regrets. The glacier cave alone — which we’ve written about separately — was worth the price of the entire trip. Budget honestly, travel well, and go.

Read next: Iceland Glacier Ice Cave: What It’s Actually Like to Stand Inside a 10,000-Year-Old Glacier →

Keep Reading: More Iceland

What We’d Do Differently

We spent more than we planned, but honestly, Iceland is one of those places where the expense feels proportional to the experience. On a return trip, we’d allocate slightly more to accommodation to guarantee a private hot tub or better views from our Airbnb, and we’d budget an extra day in the Snæfellsnes Peninsula — it’s a part of the Ring Road that deserves more time than most itineraries give it. We’d also stock the Airbnb kitchen more aggressively from the beginning instead of discovering the Bónus strategy on day three.

More Iceland from BenThere Travel

Planning your Iceland trip? These posts cover the rest of the Ring Road and the highlights we remember most:

Ben & Nicole Mathews

Ben & Nicole Mathews

We’re based in St. Augustine, Florida, sharing the places we’ve actually been — from our home turf to corners of the U.S. and abroad. Ben is an attorney and a retired Air Force JAG (22 years), and a private pilot, which is why aviation and military history shows up here too.

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