The Ultimate Guide to Budget Travel in Iceland

The Golden Circle

The Golden Circle’s proximity to Reykjavik means that it’s possible to sign up for our express Golden Circle Direct tour. You’ll see the three major sites – Þingvellir National Park, Geysir Geothermal Area and Gullfoss – over the course of 6.5 hours as you travel around the area in a comfortable coach. You’ll see some of Iceland’s most iconic sites for less than 11000 ISK per person. Upgrade to add on Friðheimar tomato farm, Laugarvatn Fontana Spa or a seasonal Northern Lights hunt.

The attractions of the South Coast are a little further away but the cost of a tour doesn’t have to break the bank. Our carbon neutral South Coast Wonders tour is the most affordable option, well worth the 15499 ISK price when you consider how much you’ll see over the course of the 10.5 hour trip. Highlights include stops at Seljalandsfoss and Skógafoss waterfalls, Sólheimajökull glacier, the notorious Reynisfjara black sand beach and the charming coastal village of Vík.

Geothermal lagoons litter the Icelandic countryside. For budget travellers based in Reykjavik, Hvammsvik Hot Springs is a relatively affordable choice. It doesn’t skimp on setting – its pools overlook Hvalfjörður – and the rustic chic vibe is a delight. Book your tickets through Icelandia from 7900 ISK or just 14900 ISK per person with transfers included. Upscale Sky Lagoon is more of a splurge but its location close to the centre of Reykjavik means transfers are cheaper; all in you’re looking at 16199 ISK per person – a steal for something so memorable.

Let’s drill down a little more about accommodation. If you’re trying to save money on your Iceland travel, this is one area where you can achieve big savings. There are a number of strategies you can employ which can help.

• Base yourself in Reykjavik

As Iceland’s capital and its largest settlement by far, the choice of accommodation in Reykjavik is greater than anywhere else in the country. This is where you’ll find the most hostels and a good range of wallet-friendly apartments, guesthouses and budget hotels. Sharing with a friend or family member means you can split the cost of the room between you.

• Make use of public transport

You’ll save money by choosing to base yourself further away from the centre. This doesn’t have to create a logistical problem as Strætó’s extensive network of city buses enables you to move around the capital both cheaply and efficiently. Conveniently, tickets can be bought on an app which you can download to your phone.

• Explore on foot

You’ll find that the centre of Reykjavik is compact – and for the most part relatively flat – so walking to popular attractions, bars and restaurants is easily doable. It’s also a pleasure and can become a memorable part of your sightseeing, such as if you incorporate the sculptures along the waterfront or some of the capital’s colourful street art murals.

• Camp

Iceland is littered with campsites and a pitch for a tent or camper van doesn’t cost much. It’s worth noting that they don’t all remain open year-round, but if you plan to visit between May and September you’ll have the pick of all of them. In many cases you’ll have to budget a little extra for showers and other add-ons.

Food is another area where the amount you can spend varies to an extraordinary degree. If you’re doing Iceland on a budget then the prices on the menu at the country’s top restaurants will be well out of reach. But that doesn’t mean you have to sacrifice the opportunity to eat authentic Icelandic dishes or even dine out in style. Try these tips:

• Visit one of Iceland’s food halls

In Reykjavik in particular, food halls have become increasingly common. Often, they repurpose historic buildings, such as the capital’s old post office, former fish processing factories and in Selfoss even a redundant dairy. They typically contain a variety of eateries, enabling you to choose the kind of food you fancy as well as making sure it’s affordable.

• Make the most of petrol stations

If you’re travelling beyond the capital, chances are you’ll find it more convenient to eat on the go. Petrol stations often have a food counter where you can not only purchase baked goods and snacks but also hearty dishes such as traditional Icelandic lamb soup. Affordable and filling, you won’t need to shell out for an expensive dinner.

• Seek out food trucks

Food trucks are a good bet for visitors on a tight budget. Often they remain in a fixed location so you won’t have trouble tracking them down. For instance, in Reykjavik, try the hot dogs from the iconic Bæjarins Beztu Pylsur stand; over at Jökulsárlón, there’s a van selling delicious langoustine rolls.

The trick to pulling off a successful holiday in Iceland on a budget is to pare down the amount of time you spend here to a minimum. Rather than incorporate lots of leisurely starts and down time between activities, aim to be on the go all the time. Pack into a few days what you might stretch to a week in a place where the cost of living is cheaper – you can rest when you get home.

We’d suggest that if you base yourself in Reykjavik then a long weekend is enough to get a flavour of what Iceland has to offer. For example, combine Icelandia’s Golden Circle Direct tour and our South Coast Wonders tour with time spent in the capital and a visit to a geothermal lagoon. In doing so, you’ll get a broad picture of the country’s landscapes, history and cultural heritage. This is easily achievable in three days.

If you’re keen to travel further afield, you might have the stamina to adopt the same strategy but be wary of cramming too much in to a longer trip. That’s especially the case if you’ve chosen a self-drive itinerary as you won’t be as safe on the road if fatigued; opting for tours means that you can nap on the coach while someone else takes care of the driving.

So, is it really possible to travel Iceland on a budget?

In short, yes! With mindful planning, you can keep the cost of your trip down without sacrificing the experiences. It’s worth thinking about where to direct your limited funds to what you’ll enjoy the most. For instance, why splash the cash on a fancy hotel when a good proportion of the time you’ll spend there will be when you have your eyes shut?

Instead, be smart about your spending on accommodation, food and transport, seeking out affordable options. Direct your budget to enable you to capitalise on Iceland’s incredible landscapes and unique culture. Icelandia offers a wide range of tours and activities that are both fun and memorable – ideal if you’re keen to make the most of your time in Iceland.