How to survive expensive Iceland without going bankrupt

Myvatn Air Iceland (6)

There’s been a lot of talk lately about how expensive Iceland is and some of the people that have talked the most about it are people that work in the Icelandic travel industry. Exclamations like: Three star hotel in Iceland more expensive than 5 star hotel in New York and Poor value for money – boo Iceland have been swimming around the interwebs lately leaving me wondering whether this is in fact true. Although I’m not going to argue that Iceland is a cheap destination there are always two sides to every story.

Comparing a hotel in New York and a hotel in the Icelandic country side is first of all like comparing apples and oranges. I’m pretty sure the hotelier in New York doesn’t have to drive tens or hundreds of kilometers for groceries for example (plus the de facto monopoly on groceries in Iceland or at the very least oligopoly) and somehow I suspect that labor costs are probably higher in Iceland too. I’m not saying that the hotelier in New York hasn’t got their own set of problems, I’m just saying that in my opinion these things are not comparable.

You also have to take into consideration the state of the currency, the fact that we import pretty much everything (and how that relates to the state of the currency), import duties, the aforementioned oligopoly and the fact that Icelandic consumers are super lazy and never protest against high prices no matter how unfair they think they are. At least not in public, there’s a lot or mumble and grumble in private though. So although you may sometimes feel cheated because of high prices there can be reasonable explanations for it. Can be – sometimes people are just charging obscene amount of money because they can and they care more about getting rich than the service part of tourism or giving their guests value for money.

Also, if you compare prices in Iceland to many countries around us (Western European countries with a high standard of living and even the US) you’ll probably discover that Iceland, in general, is not that expensive. When I was in the US in February for example I was surprised how expensive it was to eat out. The prices of the food were maybe lower in some cases but with the added tipping (something you don’t have to worry about in Iceland) the prices often came to about the same or even more than what I would pay at home. Other things were of course a lot less expensive (hello three pairs of Converse for the price of one!) but food, accommodation and drinks were similar.

So what can you do to make sure your vacation in Iceland is just the “oh they have to import everything” normally costly and not “oh my god they are robbing me blind” expensive?

Do your research

Don’t just jump at the first thing you see. I’ve seen car rental agencies offer vastly different prices for the same car depending on how or where you book it. Sometimes it’s more expensive to book things through (because of the commission rates) than booking things directly with the hotel. Don’t dismiss hostels because you think you’ll have to share rooms with 30 other people (most of them offer really nice two-bed rooms, often ensuite). Often you’ll find good deals and offers – like by downloading the Appy hour app or like the awesome MAR offer I sent out with my  newsletter recently. I know there’s also the question of your time being money and maybe it will cost more of your time to do research than what you save in krónur but why book a rental car for 20.000 ISK a day when you can get it for 7000 ISK a day?

Do like the locals do

Walk the extra few meters to go to Bónus in Hallveigarstígur rather than buying obscenely expensive stuff at the 10/11 store in Austurstræti. We do most of our serious shopping in the low-cost stores because we know it’s worth it. Ask a local whether they can recommend any good places with good offers on food. Eat at nice restaurants at lunch instead of in the evening (usually only applicable in the weekdays). Pick up your beer in the duty free on your way into the country instead of buying it in Vínbúðin. Go to one of the many amazing geothermal pools around Reykjavík and skip the Blue Lagoon.

Save money by drinking the tap water

I’ve mentioned this before and I will probably mention it again, there’s no reason to buy water in Iceland because the tap water is perfectly safe to drink and also very good. Spend your money on some good wine instead.

Use public transport

I know I’ve not been a big advocate for the public transportation system on this blog but if you are just going from A to B you don’t necessarily need to hire a car for that. Strætó, the city bus here in Reykjavík has recently expanded to the whole country and it’s not that terribly expensive. It may not be the best thing for road trips but if you are planning a solo trip  to Akureyri for example you’ll save a lot taking the bus compared to hiring a car. The bus to Akureyri is 7.700 ISK and they offer comfortable seats and free wifi. Worth looking into.

Alternatively you can also use ride share services like to find someone who’s going where you’re going.

Follow your intuition

The final piece of advice I’m going to give you is just to follow your gut feeling and use common sense. You can sometimes just feel it when someone is taking you for a ride and if that ever comes up just ask someone for a second opinion. There are countless forums where you can ask for advice or answers like the Lonely Planet’s Thorntree forum or the Tripadvisor forums where people will gladly help you figure out whatever you are wondering about. If paying an obscene amount of money for something seems unreasonable then just shop around and see what things cost elsewhere. Don’t just open up your wallet without thinking about it.

I’m not going to tell you to send your questions to me via e-mail because I’m so ridiculously busy that sometimes questions like that get buried underneath everything else I have to do but my followers on Facebook are often quite helpful if you post questions there. They usually answer them before I even have the chance to look at them.

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