If you've talked to anyone who's traveled to Iceland, there are probably two things they mention first: "It's so beautiful!" followed by "And so expensive!"
Iceland is one of the most expensive countries in the world to visit, thanks to the country's high inflation rate, protectionist trade policies, and geography as a small island in the North Atlantic. Accommodations, gas, and many attractions are costly, but you'll especially experience price shock when dining out. Here are some sample restaurant prices from our June 2025 trip:
- Two pieces of cake, one hot chocolate, and one coffee: $30
- Two bowls of soup served with bread: $38
- Meat and cheese platter for two: $65
- One order of fish and chips, a bowl of fish stew, and one beer: $71
Luckily, there are plenty of strategies for eating and drinking in Iceland without going broke, whether you're on a tight budget, willing to spend a moderate amount, or want to splurge wisely.
Tips for eating and drinking in Iceland on a tight budget
Bring food from home.
Packing shelf-stable food items not only saves money (assuming the food costs in your home country are lower than Iceland), it also ensures that you'll have food on hand so you don't have to dine out or buy expensive snacks.
We brought granola and instant oatmeal for breakfast—I added the granola to skyr I purchased at the grocery store. For dinner, we brought deluxe macaroni and cheese (the kind with cheese sauce so we didn't have to track down milk and butter) and microwavable packages of lentil dal. We supplemented our dinners with fresh bread and fresh vegetables. For snacks, we brought dried mango and protein bars. We also brought instant coffee but ended up not using it since our Airbnbs had pod-style coffee machines.
Drink tap water.
Skip plastic bottles of water and soda—bring a reusable water bottle and keep it filled with tap water. Iceland's tap water is safe to drink, although there may be a slight sulfur odor. If so, let the water run until it's cold and the odor dissipates. Many of the public buildings we visited had water bottle refill stations.
Shop at Bonus.
Bonus is a grocery store chain beloved for its cheap prices (for Iceland) and its cartoon pig mascot. It's definitely not a deluxe shopping experience—it has a warehouse vibe that reminded me of Costco, although items are sold in regular grocery store quantities. At Bonus there's less selection than Iceland's other discount chains grocery store chains, Netto and Kronan, especially when it comes to bakery items and prepared foods. However, you'll still find all the basics, including dairy items and fresh produce. Bonus is especially great for stocking up on Icelandic candy if you're planning to bring some home as a souvenir.
Eat breakfast at your accommodations.
You can save significant money (and time) by purchasing groceries and eating breakfast at your accommodations. If you're a dairy person, Iceland has so many great options—yogurt of every variety, excellent cottage cheese, and skyr, which is similar in texture to Greek yogurt but is technically a type of cheese. I ate skyr nearly every morning with granola from home. My individually-sized cups of skyr were about $3 each. Mike had instant oatmeal from home topped with granola or baked goods purchased from the grocery store or a local bakery. A small loaf of lemon quick bread was $3.75 and a snúður (an enormous chocolate-iced cinnamon roll) was $4.
We only ate breakfast out once, and our two cappuccinos and two cinnamon buns at a cafe in Reykjavik cost $27.
Plan a picnic lunch.
With a little bit of planning, you can skip dining out for lunch and opt for a picnic instead. Grocery stores and convenience stores typically sell premade sandwiches, or you can make your own. Look for Icelandic breads like rúgbrauð (dense rye bread) and flatkaka (round bread similar to a very flat pita) as well as fillings like egg salad, hummus, cold cuts, and cheese. We brought an insulated grocery bag from home in order to keep our food relatively cool until lunch time. It's also helpful to bring reusable cutlery and grab some extra napkins to keep in the car.
Iceland has plenty of roadside rest stops with picnic tables—look for signs bordered in blue and depicting a table next to a pine tree. Rest stops often have great views, especially on the South Coast and West Iceland.
Remember that the weather in Iceland can be fickle, so be prepared to picnic in your car.
Make dinner at your accommodations.
We intentionally booked Airbnbs with full kitchens or kitchenettes, so we were able eat dinner in for six of our nine nights in Iceland. Since we had long days of sightseeing and a lot of driving, we kept our meals fairly simple. Here are some examples:
- Lentil dal from home with rúgbrauð ($3.50), sliced cucumber ($2.50), and cherry tomatoes ($5) on the side
- Macaroni and cheese from home with sliced cucumbers and cherry tomatoes on the side
- Cheese tortelloni ($4) tossed with arugula ($2.50) and cherry tomatoes
We ate a lot of cucumbers and tomatoes, since those produce items are grown locally in hydroponic greenhouses and were usually the freshest option.
If you want to keep cooking to a minimum, refrigerated and frozen family-style meals like soups, lasagnas, curries, and shepherd's pies are readily available at grocery and convenience stores, as well as individually-sized, microwavable frozen entrees. Although not as cheap as cooking from scratch, that will still be more cost-effective than dining out.
Eat a hot dog.
Hot dogs are the go-to cheap meal in Iceland, thanks to the Danish cultural influence (Iceland was under Danish rule from the 14th century until 1944). You'll find hot dogs at many convenience stores, and there are also hot dog kiosks and food trucks in towns and cities. Typically, you're offered a choice of toppings including ketchup, mustard, mayonnaise or remoulade, crispy fried onions, and/or raw onions, which will be meticulously applied for you. By Icelandic standards, it's a budget-friendly meal—the hot dogs we purchased were about $6.50.
The quality of the sausages tends to be bit better than what I'd expect from a U.S. convenience store hot dog, but don't expect some kind of revelatory dining experience.
Tips for eating and drinking in Iceland on a moderate budget
Get the soup.
Soup is nearly always on the menu at cafes and restaurants in Iceland—lamb or fish soups are common, but there's often a vegetarian or vegan option, such as mushroom soup, lentil soup, or potato soup. Usually, a bowl of soup will be accompanied by a generous portion of bread, so it ends up being a decent value for a lighter meal. Occasionally you'll find soup served in an all-you-can-eat buffet format, which makes it an even better deal. Going back for seconds is expected, so don't be shy. Expect to pay about $15-$20 for a bowl of soup with bread.
Buy beer at the liquor store.
Mike enjoys sampling local craft beer while traveling, but draft beer at Icelandic restaurants was expensive. Since we were eating most of our dinners at our accommodations anyway, he saved money by purchasing some cans at a Reykjavik branch of Vínbúðin, the state-run liquor retailer. (Iceland's liquor industry is tightly regulated, and Vínbúðin is the only place where you can buy full-strength beer, wine, and spirits.) Cans were $4.50-$6, or about half the cost at a bar or restaurant.
Peruse bakeries near closing time.
I'm not sure how widespread this is, but when we stopped by a location of Brauð & Co about 45 minutes before closing time they were running a buy one, get one free deal on their rolls. We were able to score two large, high-quality cinnamon rolls for about $7, which felt like a bargain in Iceland.
Go out for dessert.
Tired of picnicking and making your own meals? Stop by a cafe for dessert. Even small, rural cafes tend to make their baked goods from scratch, with common menu items including skyr cake (a fluffy cheesecake) and hjónabandssæla (Happy Marriage Cake), which has an oatmeal crust and a rhubarb filling. You'll often spot chocolate cake, apple cake, and European specialties like tiramisu on the menu, and occasionally American-style baked goods like cookies and brownies. A slice of cake typically costs about $10.
Tips for splurging wisely while eating and drinking in Iceland
Opt for Icelandic fare.
If you're going to spend $100 on dinner, do you want it be a burger you could get at home for a fraction of the price, or would you rather spend your money on cuisine you can only eat in Iceland? We tried to focus on Icelandic fare for dinners out, such as my platter of local meats, cheeses, and preserves at Krauma ($43) and Mike's plokkari (Icelandic fish stew served with rye bread) at Reykjavik Fish Restaurant ($30).
Choose a unique experience.
Similar directing your dining budget to Icelandic food, if you're going to be spending this much money on food, why not eat in a unique setting? During our trip, we focused on unique, experiential dining venues when possible. We loved the all-you-eat tomato soup and bread buffet at Friðheimar, which is located inside a working greenhouse. At Efstidalur II, we ate lunch while watching dairy cows through a window into the adjacent barn. Freya Café was a wonderfully quirky museum cafe, and Fjöruhúsið Café boasts an incredible ocean view.
Spring for a drink at thermal pools.
Was it ridiculous to spend $22 on an Aperol spritz at the Sky Lagoon? Yes. Did I feel more relaxed than I had all year? Also yes. You're probably only going to be in Iceland once—so sit back in the thermal pool, sip your drink of choice, and savor the moment.
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