How to travel iceland on a budget
Iceland: the land of fire and ice. The country that has everything. Otherworldly landscapes. The elusive lady Aurora Borealis dancing in the night sky. Hundreds of enormous glacial waterfalls, volcanoes, cozy thermal pools. Dinner spreads reminiscent of a late 9th century Viking feast. While there are endless things to do and see in Iceland, it is known as one of Europe’s most expensive countries to travel to. Here are some valuable tips to travel around Iceland on a budget.
- When to travel
- Flights
- Ground Transportation
- Accommodation
- Food & Beverage
When to travel
Iceland has a wide variety of weather throughout the year. Often (like I did!) you experience all different weather phenomenons in one day! Summer in Iceland is known for 24 hour sunlight, fields of lupines, puffins, and temperatures in the high 70F range. While this seems very attractive, it is the most expensive time to travel. Flights can easily double in price and the most popular tourist destinations will be crowded.
Alternatively, Winter brings a fierce cold and unmatched beauty. Winter is not without challenges, such as unpredictable weather and road closures in more remote areas. If you are on a time crunch for your trip, winter may not be the best option as you might be stuck waiting for roads to reopen so you can continue your journey. Traveling during winter could be a good option to save some money. The experience of harsh winter climate can test your resolve and increase your confidence. However, it’s always best to ask a local for advice if you aren’t sure about driving in snowy conditions.
The best time to travel Iceland on a budget are fall and spring, also known as shoulder seasons. Typically, prices are still at winter lows and the weather is moderate. There is still ample opportunity to spot the northern lights and access to outlying areas of the country that would otherwise be closed during inclement weather.
Flights
Iceland is closer than you think. Iceland’s capitol city of Reykjavik is just 5 hours from Boston and NYC. Flights are usually nonstop and most are overnight, which allows you to begin your Iceland adventure with a full day of exploring.
Google Flights is a comprehensive search tool and consistently returns the lowest fares. The cheapest fares in this search tool are shown in green, so you never have to guess. The best way to get deals on flights is to have flexibility in your travel dates. Other useful booking apps for flights are Hopper, Booking.com, and Skyscanner.
Important: remember, these are search TOOLS. Always book directly with the airline. Customer service will be much more willing to help, should you need to make any changes after booking.
Ground transportation
Okay, you have landed in Reykjavik. Now what?
Car Rentals
There are a few different options when it comes to transportation in Iceland. The most common and popular is renting a car. Take a free shuttle from the airport to the car rental company you have booked. Worth noting was the reasonable cost of the rental car. However, due to extreme winds and other weather conditions, Icelandic car rental companies often require you to purchase extra insurance when you arrive. When renting a car in Iceland:
- Choose a car with built in Navigation. It was comforting to have this as a backup even though my phone worked everywhere.
- 4×4 Capabilities. Iceland has some of the most rugged terrain in the world. Get the 4×4 for peace of mind!
- Park into the wind. Most car rental insurance companies will not cover blown away doors!
Ultimately, renting a car gives you freedom of choice and the ability to change plans if needed.
Camper Vans
Secondly, renting a camper van is another popular way to travel around Iceland on a budget. Camper van rentals have become increasingly popular over the years as costs rise and more people are traveling solo or as a couple. I saw these vans everywhere I went, and I have to admit I was envious of this nomadic, fly-by-the-seat-of-your-pants style of travel! The number one benefit of renting a camper van is that it eliminates the need for booking any kind of accommodation. A close second is the freedom it allows in your itinerary, as camping is extremely common around Iceland and it’s free or very cheap. Some of the most reputable camper van rental companies are Happy Campers, Campervan Iceland, and KUKU Campers.
Bonus tips: when driving in Iceland, do not speed! Icelanders are very serious about this and fines can be hundreds of dollars. Park your vehicle facing into the wind. Your rental insurance will not cover damaged doors that are blown off the hinges! Unless you are searching for the Northern lights, try to arrive at your next destination during the daylight hours. Get up and get going!
Tour Buses
Lastly, and the most expensive option for getting around is on a tour bus. Tours are conducted from Reykjavik daily to the local popular tourist sights, or you can sign up for a longer bus tour style trip that includes mid-luxury hotels and some meals. If you want to leave the driving up to someone else, guided bus tours might be an option for you. Iceland is a country for wonder and exploration. The best memories I have from my experience driving the south coast were all the stops made along the way. Tour buses do not offer this type of freedom of exploration, but can help take out the stress of driving. If you’re looking for an already-built trip to sign up for, go with Intrepid Travel.
Where to stay in iceland on a budget
Wether you are planning a short stay in the capitol city of Reykjavik or a multi-week trek around the ring road, there are accommodation options for every budget. Airbnb is a great option with something for every budget from farm stays, to glamping, to modern Scandinavian style homes. My itinerary began with about an hour’s drive to an Airbnb. The isolation and true quiet of the sparsely populated countryside was the perfect way to kick off the trip. There were snow-capped mountains in the distance, Icelandic horses on the property, and it was well-located to explore nearby waterfalls and other sights. I even saw the Northern lights about 30 minutes from this Airbnb, which was such a treat! Airbnbs outside the city range in price from $100 USD to over $600+ USD per night, but the average price is around $200-$250 USD per night.
Budget hotels and hostels
Hotels can be found scattered across the countryside and include hostels, guesthouses, and luxury properties. Hostels such as Hostel B47 start at just $25 USD per night for a dorm and is well-located within walking distance to Reykjavik’s many attractions and amazing restaurants.
Comparatively, there are budget options such as Berjaya Iceland Hotels in Hofn ($160/night) or Kirkjufell Guesthouse and Apartments ($139/night) in Grundarfjordur, located on the Snæfellsnes peninsula near Kirkjufell Mountain (an iconic filming location for Game of Thrones!).
Luxury
If it’s luxury you’re looking for, Icelandic hotels will answer your inner god/goddess’s call. At the top of my list is Sandhotel in Reykjavik, known for it’s perfect location, amazing breakfast and stunning bakery in the adjacent building. The marble bathroom in my room was complete with luxury shower products and a heated floor. Also, the bed was among the comfiest I’ve ever slept in. Staying here was the perfect way to unwind after being exposed to the harsh weather of the South coast for a week prior. Additionally, Fosshotels by Islands Hotel is a hotel chain offering 3 and 4 star accommodations with a variety of locations all over Iceland.
On the other hand, renting a camper van eliminates the search for accommodation entirely! For more on where to stay in Iceland, check out my post 8 Days in South Iceland.
Food & Beverage
eat your way through iceland on a budget
How you choose to eat during your trip can make or break your budget. Of course, you are on vacation and you want to try new foods, right? One of the best ways to experience local culture is through food. Iceland has no shortage of unique food options, and here’s how to have the best of both worlds when it comes to being budget-conscious.
Shop like a local
Grocery shop. Stock up on snacks, cold lunches, fresh veggies, and drinks at a supermarket before setting off on your road trip. It is important to ask yourself what you WANT vs. what you NEED, for instance. This simple question is crucial for saving money on food. Grocery stores will still have items unique to Iceland for you to try, so pack a picnic and try to decide which ridiculously beautiful view to enjoy it in front of!
Choose where to splurge ahead of time
Restaurants in Iceland are expensive in comparison to most places in Europe and the US, however, you will find some of the freshest and best food you will ever taste in Reykjavik’s restaurant scene. Dinner out at a restaurant will be on average $30-$50 per person not including alcohol. My personal strategy for saving money when I really want to try the restaurants is to do my research first. I usually splurge on ONE dinner per trip, spending around $100 for my meal. In most places, this will be a chef’s tasting or similar. For example, my splurge for Reykjavik was Messinn, a seafood restaurant that delivered flavors I can only now dream about.
Great local food doesn’t have to come in a fancy package or an astronomical price tag. On of the most memorable things I ate in Reykjavik was fish and chips at a local fish shop that served cheap local bottled beer. Salty, crispy, fresh, goodness. Chef’s kiss.
Don’t buy bottled water in Iceland. Ever. Iceland is world famous for it’s crystal clear glacial water that’s perfectly safe to drink right from the stream. If this still has you weirded out, grab a reusable water bottle with a filter such as my favorite, Lifestraw.
Alcohol adds up
Limit or eliminate alcohol consumption. Alcohol is expensive and it will add up quickly if you’re drinking with every meal or every day of your trip. The best way to save is to simply eliminate this expense all together, but there are ways to lower alcohol costs if you still want to enjoy a beverage. For example, you can buy duty-free inside the airport before setting off. Choose local spirits/beer/wine. Consequently, imported things cost more. Take advantage of happy hour! Reykjavik is known for it’s lively happy hour scene where you can find discounted drinks, snacks, coffee, and more.
Your trip to Iceland can be affordable!
In conclusion, you can save hundreds by simply choosing to travel during the off-season. By planning your trip with these money-saving strategies in mind, you will reach a common ground between what your heart wants and your budget will allow.
Happy travels!