How to Travel to Iceland Cheap: Experience Iceland on a Budget

Traveling to Iceland is an adventure of a lifetime, with stunning landscapes, otherworldly sights, and a unique culture. However, with its reputation for being an expensive destination, many travelers may shy away from planning a trip to this beautiful country. The good news is that with some careful planning and money-friendly tips, it is possible to experience Iceland on a budget.

In this blog post we will share some ways to travel Iceland cheap. From budget-friendly accommodations to cheap food and all that is in between.

I fell in love with Iceland on my first trip back in 2010. Tim and I returned together in 2022 for an unforgettable honeymoon. In our humble opinion we think everyone needs to experience Iceland once (or twice, or three times…) in their lives. It is hard to describe what the rawness, emptiness and power of nature in Iceland does to you. You really need to feel this for yourself. But unfortunately traveling to Iceland on a budget can be challenging. That’s is why we want to share these tips with you. To help you out with keeping your trip to Iceland cheap.

Iceland will never be really cheap, so you have to keep that in mind. But following these tips can make a huge difference.

Iceland Travel Guide — Enjoy the beauty of Iceland

How to Travel Iceland on a budget?

Traveling during off-season – Forget about July or August

Peak season in Iceland is during the summer months, when the days are long and the weather is mild. However, this is also when prices are at their highest. Visiting Iceland during the shoulder season (late April to May or September to October) can save you lots of money on flights, accommodations, and tours. Plus, you’ll still get to enjoy many of Iceland’s unique features, such as the Northern Lights (September till March).

It is definitely worth comparing prices for example on car rental for various periods. These prices can vary enormously if you compare April/May to July/August.

If you want to know what month or season fits your needs best for your visit to Iceland? Check out our post on how to plan your trip to Iceland wisely.

Book accommodations wisely

Accommodations in Iceland can be expensive, but there are ways to save money. Consider booking a hostel or camping site instead of a hotel. You can also look for accommodations outside of Reykjavik, which tend to be less expensive. Finally, consider booking accommodations with a shared kitchen, so you can cook your own meals and save money on dining out.

We will list some types of cheap accommodations you can book in Iceland and add some links to find some.

Hostels

Hostels are a popular choice for budget travelers, and Iceland has a number of them. Most hostels offer dormitory-style accommodations, as well as private rooms. Some even have kitchen facilities, which can be a great way to save money on meals. Hostels are a great option for solo travelers, backpackers, and those who don’t mind sharing space with others.

“For my first trip to Iceland we booked private rooms in hostels. This was perfect and relatively cheap. We had a shared bathroom and kitchen, but did not have to sleep with strangers in the same room. So this was perfect for us. Being able to cook our own meals meant a huge saving on our budget.”

Dennis

Campings

Iceland has a number of campsites, which are a great way to save money on accommodations. If you have your own tent and camping gear, you can stay at a campsite for a fraction of the cost of a hotel or guesthouse. Some campsites also have cabins available for rent, which can be a good option if you don’t have your own gear.

Guesthouses

Guesthouses are similar to bed and breakfasts, and they are a popular choice for budget travelers in Iceland. They offer private rooms with shared bathrooms, and they are often located in residential neighborhoods rather than tourist areas. Guesthouses can be a good option if you want a bit more privacy than a hostel can offer, but don’t want to spend a lot of money.

Airbnb

Airbnb is a popular choice for travelers who want to stay in a private apartment or house. It can be a good option if you’re traveling with a group, as you can often split the cost of the rental. However, it’s important to do your research and make sure that the listing is legitimate before booking.

Couchsurfing

Couchsurfing is a community of travelers who offer their couches or spare rooms to other travelers for free. It’s a great way to meet locals and experience Icelandic culture firsthand. However, it’s important to be respectful of your host’s space and follow their rules.

When booking accommodations in Iceland, it’s important to keep in mind that prices can vary widely depending on the season. During the high season (June-August), prices are generally higher than during the low season (September-May). Additionally, accommodations in popular tourist areas (such as Reykjavik) tend to be more expensive than those in more remote areas. By doing your research and booking in advance, you can find affordable accommodations that will allow you to experience all that Iceland has to offer without breaking the bank.

Booking.com

TOP TIP: We found this awesome cottage in Egilstadir (East of Iceland.) Really cute and with a stunning view over a lake. It has a kitchen so you can cook your own meal. Prices were very reasonable. We absolutely recommend booking this for your road trip. Check out the link below:

Ormurinn Cottages in Egilstadir on Booking.com

Another budget friendly hotel tip we want to add is the Viking Café in Höfn. Small and Simple but efficient rooms. Good food at the Café itself including the breakfast with the room. And the location is the best. It is right there at the Stokksnes Beach and booking a room includes the entree tickets to the beach and the Viking Village. Normally you would have to pay to enter this area.

What Else can you do to Travel Iceland on a Budget?

Transportation

While renting a car may be the most convenient way to get around Iceland, it’s also one of the most expensive. Instead, consider using public transportation such as the bus system or taking a shared shuttle service.

On a personal note we would always save up enough money to rent a car. This will provide you with so much more freedom to stop whenever you see something stunning along the way. And believe us… this will happen. Iceland is not a destination where you have to drive for hours to get to the next highlight. There are gorgeous sites everywhere all the time. So the freedom to plan your own route and to not depend on where the (tour)bus takes you, is worth the money.

However, keep in mind that prices for car rental can increase with over 200% for the summer peak season. So always check your options for other months, and plan you trip accordingly.

Shop at Grocery Stores in stead of eating out

Eating out in Iceland can be very expensive, so consider buying groceries and cooking your own meals. Most grocery stores in Iceland have a good selection of local and international foods at reasonable prices. You can also try some of Iceland’s unique foods, such as skyr (a type of yogurt) and dried fish.

If you want to grab a meal somewhere, be aware that many gas stations offer good quality meals. Since some locations on Iceland are rather remote, these gas stations have developed a real nice food options.

Check out our Iceland Food Tour video for some great tips on what to eat in Iceland.

Explore free or low-cost activities

Iceland has plenty of natural wonders to explore that won’t cost you a dime. For example, you can hike through national parks, visit waterfalls, and see glaciers for free. You can also visit museums or cultural sites that offer free or low-cost admission.

You can see all the beauty of Iceland without spending any money on admission fees or organised tours. This is a huge advantage for your Iceland road trip. (note to self: you do need to pay for parking at some of the popular sites. But these costs are not that high)

Our favorite free Activities in Iceland:

Visit Strokkur (Geysir)
Gullfoss
Þingvellir National Park
All the waterfalls in the south
and so many, many, many more. (check our other Iceland post to get more tips)

Two of our favorite Cheap Activities in Iceland:

Hrunalaug Hotspring (costs around 10 euros / 12 dollars per person)
Fridheimar Tomato Restaurant (only the cost of the food)

However, some activities will cost you money. We will list a few to give you an example. If you are on a tight budget, you can skip these without having to compromise your Iceland adventures.

Glacier Walk
Boat trip on the Iceland Lagoon
Snorkling or Diving at the tectonic plates
Horsebackriding
The Lava Show
Etc

We want to mention to activities we think you should splurge on!

1: Go on a Glacier Walk. Drive up to Skaftafell and book a tour at one of the agencies. This 3 to 4 hour tour will lead you over a glacier and you will learn so much from the guide. If you are lucky you might even enter an Ice Cave.

2: The Lava Show. Located in both Reykjavik and Vik you can see real lava up close and personal. Check out their website for prices and showtimes.

Bring your own Gear

If you plan to do outdoor activities such as hiking or camping, bring your own gear instead of renting it. This will save you money and allow you to bring familiar and comfortable equipment.

Traveling to Iceland on a budget requires some careful planning, but it’s possible to have an amazing experience without breaking the bank. With these tips, you can experience all that Iceland has to offer while keeping your wallet happy. If you have any additional tips; feel free to share them in the comments and make sure to check out our other Iceland posts for a perfect Iceland adventure.