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Iceland is famous among travelers for dramatic lava field landscapes, volcanic hot springs, and as the land of 1,000 waterfalls. It also earned itself the reputation of being a rather expensive backpacker destination.
Food, spirits, and supplies come with a hefty price tag. Most things must be imported to the island. On top of that, Iceland is catering more and more to the luxury traveler. Building gorgeous hotels with prime viewing for the Aurora Borealis and all-inclusive tours incorporating everything from horseback riding to glacier hiking.
Iceland will be far from your cheapest travel destination, but it doesn’t have to cost you an arm and a leg.
The key is to think a little more like a local and less like a tourist.
Here are some tips to save you some serious cash along the way.
Time Your Visit During Shoulder Season.
Shoulder Season is from Mid-October to Mid-March.
We traveled during February which is viewed as a shoulder season for Iceland. The weather can be unpredictable but you still get roughly 10 hours of daylight. AND you avoid the 1.2 million tourists that visited the small island in the summer months of 2018. Choosing your time of year wisely not only guarantees cheaper prices all around, but you get the picture-perfect moment ALONE at every waterfall.
Fly A Budget Airline.
The downsides are you don’t get to pick your seat, they don’t serve inflight food or beverages unless you pay for them, and you are limited to one backpack to bring as a carry-on. Pack light, buy some snacks, and bring an empty water bottle to fill before you get on the plane.
I suggest the Lifestraw Filter water bottle. It saved me over $500 in Asia.
UPDATE: As of October 2019, WOWAir officially reduced its US to Iceland routes. Currently, the carrier only flies from 4 US airports: Detriot, Newark, Baltimore, & Boston. But there are plenty of other budget airlines depending on where your departing from.
Rent a Car in Iceland.
Tours and
Start your search here for the cheapest options.
Northbound car rentals had great deals for “off-season” rentals and offered a free shuttle service to and from the airport (most car rentals should). If you are planning on driving the Ring Road (which you should be), get a vehicle with 4WD, studded snow tires, and good insurance for wind and water damage.
Warning. Driving can be extremely difficult when the weather turns and I saw a lot of unprepared drivers stuck in snowbanks. If you don’t plan on getting an international phone plan, I recommend opting for the in-car GPS. Many roads in Iceland aren’t clearly named and navigating in rural areas would be almost impossible with just a roadmap.
Give Hitch-Hiking a Try.
Another option if you are feeling adventurous is hitchhiking.
It’s very common in Iceland and in the summertime easy to do. I saw several backpackers attempting this in the winter-time and since cars are few and far between, they usually ended up soaking wet or caught in a blizzard. This tip alone will save you hundreds of dollars if you’re up to it.
It’s also very safe. Iceland is one of the safest countries in the world & this is a common mode of transport here.
The single most important website to bookmark for this trip is the road conditions site. The website gives you up to the minute road conditions of the entire island. I
ncluding areas of wind, ice, and water on the roadway.
Sleep for Cheap. As Cheap as you Can, That is.
Cheap lodging is relative. For me, “cheap” lodging somewhere like Thailand or Myanmar, is $6. In Iceland, you should consider $20-30 a deal.
Evan and I took it upon ourselves to try to make that a reality for Iceland. Most hotels in the southern part of Iceland are going to cost you around $150 per night and hostels around $40 per bed. So instead, we focused on finding guesthouses and Airbnb rentals that don’t get as much love during the winter months. Fewer people mean they are forced to drop their prices.
How to Score Cheap Airbnb’s
The key is to start your search early before all the reasonably priced homes fill up. Iceland is one of those rare destinations for backpackers that the best deals are found online and booked in advance. Far in advance.
Another hot tip: Plan around where the cheap accommodation is. Don’t assume it’s in the major towns. More often and not the cheapest Airbnb’s are along the long stretches of the Ring Road where people rarely stop.
We ended up spending around $60 USD per night between the two of us and stayed in some AMAZING homes, including two lovely farms. Most guesthouses had breakfast and coffee included and all had free wi-fi to plan your next day of adventures.
I highly recommend staying at the Mjoanes accommodation if you are passing through the East fjords. Free coffee, friendly dog & cats, and the host baked us the most delicious Icelandic homemade bread I had all trip. On top of that, the home was in a prime location to glimpse the northern lights.
Pro-Tip: When booking hotels or activities make sure you use websites that give you a refund or free cancellation. Weather changes can make roads impassable quickly, leaving parts of the island unreachable. We had to cancel our guesthouse for the Snæfellsnes peninsula when the wind picked up to 85MPH. Weather caused cancellations for ice caving tours, horseback riding, and pretty much everything else on the island. Most places refund you but it’s still good to keep in mind.
Consider CouchSurfing.
Couchsurfers is an online accommodation option that allows you to sleep for free in locals homes. Sometimes you’re given a room, sometimes it’s a literal couch, but it’s always specified ahead of time. It’s super safe & an amazing way to make a new friend who knows all the hidden gems that tourists miss.
We couchsurfed in Medan, Sumatra before we went trekking to see wild orangutans & our host was a lifesaver at finding food spots in the overwhelming Indonesia city. We still keep in touch today.
Eat (& Drink) Cheap.
Eat like the locals if you want to save some cash. Which means less meals eaten out.
Every day before we hit the road we took advantage of free breakfast. Which usually consisted of bread, jam, cured meats, and coffee at our guesthouses. Then we stocked up on Icelandic snacks at the local grocery store/gas station. We splurged every night on a hot dinner and some drinks so that we could try some local cuisines. Most portions were large enough for us to share.
Restaurant meals will cost you around $20-30 USD per plate.
As for alcohol….local beers were $8-15 (!!!) a pint and a cocktail will run you $20-25. If you are on a strict budget it’s probably best to make this a sober vacation.
Pro-tip: Buy a bottle of Brennivin or Birch sap liquor duty-free at the airport if you want to sip on something while you’re soaking in a hot spring.
Delicacies to Avoid…
Iceland has some really delicious and some very weird cuisine. Puffin and whale, for example. They are super expensive and eaten only by tourists,
Find Free Iceland Attractions.
This is the easy part! Iceland is a photographer and nature lover’s dream. It’s full of beautiful mountain scenery, waterfalls, volcanic craters, and black sand beaches. And all of it is 100% free.
Just drive the Ring Road and take in the breathtaking scenery. We’ve done quite a few road trips. We converted a van & toured the United States (including the Badlands), careened around the Laos countryside on the Thakhek Loop, and this still remains our favorite road trip.
My favorite free Icelandic activity? Watching the dancing colors of the Aurora Borealis. Every evening we set out looking for a cloudless patch of sky away from town. & on our last night in Iceland– we were finally rewarded with the shimmering green glow of the Northern Lights.
Get Ready to Splurge on Iceland’s Best Attractions.
Activities like horseback riding, glacier tours, whale watching, seal spotting, the famous Blue Lagoon, and snorkeling are pricey. I would pick a couple of must-see things depending on your interests.
We chose to budget two ticketed activities on this trip, a glacier hike and the Blue Lagoon. & we don’t regret our decision.
Take a Glacier Tour
There are many options for going on top of and inside a glacier. None of which come cheap.
We opted for the $200 “Into the Glacier” tour which included 2 hours of glacial hiking as well as exploring an ice cave that took you down into the Vatnajökull Glacier. The glacier was vibrantly teal-colored and the ice was crystal clear. This is one of the few places in the world to get this up close and personal with the melting glaciers and it was worth every penny. Our tour happened to be the ONLY one that didn’t get canceled. 85 mph winds and rain had flooded most of the caves three days before.
Visit the Famous Blue Lagoon
Blue Lagoon or Bláa Lónið is commonly called a tourist trap. & they aren’t wrong. BUT. We felt it was worth it.
It costs $100 for the basic entrance package which doesn’t include anything other than entrance (yes, that means no towel). That being said the water was mystifying, blue, and toasty warm. We went at 6 PM for sunset and the lagoon was quiet, less crowded, and some much-needed relaxation after a long day of driving.
In my opinion, it’s definitely worth doing once. Iceland is also full of natural springs like this hidden in the wilderness that
Score Discounted Icelandic Souvenirs.
Everyone wants a lopapeysa, the trademark handmade wool Icelandic sweater.
Unfortunately, they normally run about $240.
We managed to snag one for $70 by perusing the red cross and other thrift stores on the main shopping street in Reykjavik. There are loads of lopapeysa on the shelves.
How Much Did We Spend in Iceland?
Although we definitely didn’t break the bank, we didn’t really treat Iceland like a budget vacation. We definitely could have skipped things like the extra beer and thrifted Icelandic sweater to spend less.
Overall, we spent around $2,000 including our car rental over the course of 10 days. About $1,000 per person.
Here’s a quick breakdown of what you might spend in Iceland.
Potential One-Time Expenses
- Flight- $280 USD
- Car Rental- $500 USD
- Glacier Tour- $200 USD
- Horseback Riding- $100 USD
- Blue Lagoon- $100 USD
Daily Expenses
- Food- $40 USD per day
- Lodging- $30 USD per day on average
- Gas- $20 USD per day (total for one vehicle)
Cost Summary: 90 USD per day/per person + additional tours
These tips will help you travel to Iceland on a budget and still get the full Iceland experience. Expect to spend around $90 without being too budget conscientious and if you opt for some of the mega-saving strategies like couchsurfing or hitch-hiking then expect to spend WAY less.
Need Help Planning Your Icelandic Adventure?
2 Comments
She Roams Solo Ladies - The Bartender Abroad - She Roams Solo
July 29, 2019 at 4:41 pm[…] Iceland is insanely expensive. But we stayed at Airbnb’s, split meals in restaurants, and rented our own car to get around the Ring Road. Definitely skip the alcohol if you're trying to budget. A cocktail will run you up to 25 USD a piece. I would also suggest skimping on your food budget. For us, Iceland wasn’t about food. It was about the magnificent natural wonders that it had to offer. So there’s no shame in eating gas station snacks and road-trip food. We also layed out a complete guide on how to budget Iceland. […]
Joe Marasciulo
March 24, 2020 at 3:18 amI admire your work, regards for all the useful content.