Published on
December 26, 2025
Iceland’s stunning landscapes are like something out of a dream – fiery volcanoes, majestic glaciers, and geysers that seem to defy nature.
Iceland’s stunning landscapes are like something out of a dream – fiery volcanoes, majestic glaciers, and geysers that seem to defy nature. It’s a land where nature’s raw beauty is on full display, from the eerie glow of the Northern Lights to the dramatic views of black sand beaches and towering waterfalls. But as enchanting as Iceland may be, it comes with a hefty price tag that can leave even seasoned travellers in shock. While the unforgettable experiences are worth every penny, the cost of exploring this land of fire and ice can quickly add up. So, if you’re planning to visit, prepare not just for breathtaking sights, but also for a journey that will stretch your budget.
When you stroll through the streets of Reykjavik, you’ll inevitably spot quirky tourist shops selling black T-shirts emblazoned with the slogan: “Iceland. Not just cold.. But don’t let this humorous motto deter you— Iceland’s unique charm and unparalleled beauty have earned it a place on every travel bucket list.
If you still have doubts about the costs, just ask Ísòl, Visit Iceland’s AI concierge agent. She’s quick to explain that the high living expenses in Iceland are no joke. According to her, the country’s geographic isolation, limited resources, high wages, taxes, and ever-increasing tourism demand are all contributors to the inflated prices. Though Ísòl delivers this information with a tone of regret, it’s undeniable: Iceland’s growing popularity as a tourist destination has driven up the cost of living and travelling.
A Classic Iceland Experience: Cold, Expensive, and Beautiful
I recently spent three days exploring Iceland, a classic tour that included a night in Reykjavik and two nights in Reykholt, nestled along the famous Golden Circle route.
The country certainly lived up to its reputation: cold, expensive, and rainy. However, the real surprise for me was the constant reminder of the high prices. At one point, I left my glasses in the cabin and, unable to read the menu at a restaurant, was blissfully unaware of the cost. It wasn’t until the bill arrived that I realized the damage: €137 (£120) for one main course and a glass of wine. And believe it or not, this was quite standard for dining in Iceland.
For forgetful visitors like myself, Iceland may seem like the perfect place, as we are blissfully unaware of what’s going on around us. For others, though, the high prices can be a major strain on the wallet.
Seeking Budget-Friendly Alternatives: Ísòl’s Recommendations
On the flight back home, I overheard a conversation between a man and a friendly Icelandic woman. He was lamenting the financial damage he’d incurred during his trip. “I know… it’s terrible,” she sympathetically replied. This made me wonder if Icelanders are secretly trying to keep tourist numbers low. Perhaps they are encouraging us to go elsewhere.
Naturally, I decided to ask Ísòl if there were any budget-friendly alternatives for travellers looking to avoid the high costs of Iceland. She suggested several countries with lower expenses, including Poland, Hungary, Mexico, Portugal, and Greece. While these destinations are certainly wonderful and much more affordable, Ísòl could have probably named 190 other countries that offer a more budget-friendly experience.
Is Iceland Trying to Keep Tourists Away?
Some have speculated that Iceland is intentionally pushing away tourists through messages like “cold and expensive” or by recommending other, cheaper destinations. Iceland’s tourism board, after all, encourages visitors to consider quieter regions like the Westfjords instead of the popular Golden Circle route.
Prime Minister Kristrún Frostadòttir, whose name translates beautifully as “daughter-of-the-frost,” has hinted at the idea of toning things down a bit to manage the rising number of visitors. Over the last decade, Iceland’s tourism numbers have surged, largely thanks to the Game of Thrones phenomenon, which showcased the island’s striking landscapes. In 2010, the country welcomed just 500,000 visitors, but by 2018, the number had ballooned to 2.3 million.
While some argue that this influx of tourists has caused significant strain on the country’s infrastructure and led to environmental concerns, Iceland’s tourism board remains optimistic. They believe they can comfortably manage up to 2.5 million visitors annually. Still, they continue to urge tourists to explore lesser-known regions like the Westfjords, which offer solitude and natural beauty without the crowds.
Iceland’s Unwavering Appeal: A Unique Destination
Despite the high costs, Iceland’s magnetic pull is undeniable. From its striking volcanoes and geysers to its rugged landscapes and rich history, Iceland is a destination unlike any other. It’s a land of contrasts – a place where fire meets ice, and where nature’s forces are on full display.
New attractions, such as the Perlan Museum, are helping Iceland maintain its place as a must-visit destination. Visitors can explore exhibitions on Iceland’s glaciers, volcanoes, and geothermal energy, which showcase the country’s unique natural phenomena in an engaging and educational way.
While some may question the sustainability of Iceland’s tourism growth, the country’s natural beauty remains one of its greatest assets. In fact, Iceland’s appeal is so powerful that even poet and wallpaper designer William Morris, who visited the country in 1871, couldn’t resist writing about it. Though he complained about the litter at the Thingvellir geyser, he also wrote a poem that described Iceland as the “land of fire and ice,” a phrase that continues to attract travellers to this day.
The Cost of Visiting Iceland: Worth It or Not?
After my trip, I found myself weighing the pros and cons of visiting Iceland. While the flights were relatively affordable, the accommodation and meals quickly added up. A two-night stay at an Airbnb in Reykholt, for example, cost me €515 (£450). The property, however, offered luxurious amenities and breathtaking views over the surrounding landscape, making it a memorable experience.
The bottom line? Iceland is not a budget destination. If you’re looking for a cheap getaway, this might not be the place for you. But for those willing to splurge on a once-in-a-lifetime experience, Iceland offers something truly magical. The country’s unique landscapes, friendly locals, and world-class attractions make it an unforgettable destination.
The Future of Icelandic Tourism: What’s Next?
As Iceland continues to grapple with overtourism, the government is focused on ensuring that tourism remains sustainable. While they welcome the economic benefits brought by tourism, they also recognize the need to balance visitor numbers with environmental preservation. The country’s allure is undeniable, and while the “cold and expensive” message may serve as a deterrent for some, it’s clear that Iceland will continue to be a popular destination for years to come.
In the end, Iceland’s mix of natural beauty, rich culture, and unique experiences make it a destination worth visiting, despite the costs. For those who can afford it, the memories and experiences are worth every penny. So, while Iceland may be cold and expensive, it remains an island of wonders, attracting millions of tourists each year.
