Top 10 Budget Tips for Iceland

Traveling around Iceland working on our Rick Steves’ Iceland guidebook, I experienced some sticker shock. Here are my best strategies for keeping costs down in one of Europe’s most expensive countries.

1. Consider Airbnb. Airbnb and similar sites rent properties that are typically far cheaper and more spacious than a hotel room, provided you’re willing to forego big-hotel services (such as a reception desk and daily cleaning). Airbnb can also get you into more local-feeling neighborhoods; sleeping in a Reykjavík suburban home is both cheaper and more Icelandic than a hotel in the touristy downtown.

2. Be willing to “go” down the hall. While Icelandic hotels are pricey (starting in the $250 range), its characteristic guesthouses can be affordable (closer to $150). These typically offer basic rooms with a shared bathroom, which cost even less than en-suite rooms.

3. Have a big lunch and a small dinner. Even the fanciest restaurant offers excellent-value lunch specials for around $25 — allowing you to sample a high-end chef affordably. Savor a quality restaurant lunch, then picnic or grab cheap takeout at dinner (when most restaurants drastically increase prices — upper-midrange places charge $40-50 for an entrée). For Icelanders, takeout pizza, the IKEA cafeteria, or the corner hot dog stand provide a cheap and handy meal, just like back home.

4. Picnic. In general, cultivate the art of picnicking in atmospheric settings. Seek out Iceland’s discount supermarket chains — Krónan and Bónus — and use them to stock up. Be careful picnic-shopping at the ubiquitous convenience stores, which are far more expensive. And consider bringing a few staples from home. For example, in a land where a basic takeaway coffee costs $5 a cup, “importing” a few packets of Starbucks Via helps you caffeinate cheaply.

5. Know what’s included. Every restaurant happily provides a free carafe of tap water — just ask, and don’t feel obligated to purchase a drink. And if you’re paying for unlimited soup and bread, don’t be shy about going back for seconds. Since Iceland has no tipping custom, and taxes are included, you’ll pay exactly the price you see on the menu.

6. Economize on alcohol. Alcohol is priced at a premium, particularly in bars and restaurants. Seek out happy hours, when prices drop by as much as half. Stock up at the airport duty-free store on arrival — with the lowest prices in Iceland — or at a government-run liquor store (called Vínbúðin).

7. Consider renting a car. In many places, taking public transportation can save you plenty over the cost of renting a car. But in Iceland — where the best attractions are deep in the countryside, reachable only with a pricey excursion — this thinking is often a false economy. For example, a couple based in Reykjavík for three nights might pay for all-day excursions to the Golden Circle ($100 per person) and the South Coast ($150 per person), plus the transfer from the airport to downtown ($40 per person round-trip) — that’s nearly $600, compared to about $450 for a comparable-length car rental. To reduce rental costs, skip the options you don’t need: Since it’s cool and breezy even in the peak of summer, you can pass on the air-conditioning. And, unless you’re here in winter (when roads can be dicey) or plan to venture far off the beaten path, a casual tourist doesn’t need four-wheel drive.

8. Skip the Blue Lagoon. While the Blue Lagoon spa is famous, and a highlight for many visitors, a basic ticket in peak times starts at $80 — nearly ten times as much as Iceland’s many thermal swimming pools. Reykjavík alone has more than a dozen municipal pools with water just as hot as the Blue Lagoon’s, and that provide a far more authentic Icelandic experience. If visiting several pools, invest in a shareable multi-visit card.

9. Sightsee Selectively. Icelandic museums are typically quite small, well-presented, but expensive (admissions are often $15-20). To stretch your budget, choose carefully, and don’t assume every museum is a worthwhile investment. If you’ll be sightseeing a lot in the capital, consider a Reykjavík City Card. Fortunately, many of Iceland’s best attractions — its natural wonders — are free (though a few charge for parking).

10. Splurge where it counts. When you do splurge, choose an experience you’ll always remember: Naturalists invest in a whale-watching tour, foodies splurge on culinary walks and the occasional high-end restaurant meal, and adventurers spelunk through a lava cave or hike across a glacier.

For lots more advice on traveling to Iceland, check out the new Rick Steves’ Iceland guidebook. Thanks to that book’s co-author, Ian Watson, for his many practical, money-saving insights.

26 Replies to “Top 10 Budget Tips for Iceland”

  1. We were just there for 10 days in 3 different vacation rentals. One of the owners offered to rent us their car for 10 days, even though we only rented their home for 2 nights. It was $400 cheaper than I could get from any rental car agency. We were able to stretch our dollar by cooking at home and making PB&J sandwiches for our picnic lunch. Highly recommend nICestay, who have a wonderful house and rented me their car. https://nicestay.jimdo.com/

  2. We rented a car and drove the ring road two years ago. We must add, improbably,the small gas station restaurants provide a bargain, delicious meat soup served with bread.

  3. Rent a camper! Your transportation and accommodation all in one. The price per day might come out even with added insurance but the flexibility is unbeatable. Plenty of campsites all over the country, and allows you the space to have quite a bit of groceries for all meals. Even cold things can be kept in a cooler and grocery stores sell bags of ice. We must have saved close to $1000 over an 11 day stretch by making our own meals versus eating out all the time.

  4. I agree with every suggestion. And, if I may add one…..while driving in Iceland pay particular attention to sheep, grazing by the side of the road. They sometimes, without warning, decide to relocate to the other side. If you hit one, you are responsible for tracking down the sheep’s owner and making restitution.
    Also, pay particular attention to the center of the roadway – people driving in Iceland like to hog the crest of the road surface as the drop off on the side of the roadway is often intimidating.

  5. From experience I can attest to the advice in # 1, 3, 6, 8, 9 & 10. We had a marvelous B&B and an even more marvelous host… We did kinfd of a foodies tour at dinner and paid the price– $179, $189, $267 for great meals–but for 2 people?…The alcohol advice is spot on. Either buy at the airport before you catch the expensive Fly Bus or find a state owned liquor store…We couldn’t even get an over-priced resi at the Blue Lagoon, but spent a marvelous morning at Laugardaslaug in Reykjavik (free for seniors) with Icelanders and not tourists.. If you are not renting a car, we found GeoIceland the most reputable and value-added tour company for day trips.

  6. As a native of Iceland and a resident in Reykjavík for half a century I can corroborate that all tips above are correct. It is possible to find inexpensive bus fares by Straeto.is but they make many stops so the trips can take a while. The Blue lagoon tip is spot on, we natives do not understand why our visitors do not use all our inexpensive municipal pools instead of that high priced lagoon. I hope the book will turn out well.

  7. During the high season the car rentals are very expensive in Iceland, especially if you want a 4×4. There are peer to peer car rentals that allow for rental directly from individuals similar to airbnb for housing. These are carrenters.is and caritas.is. We used it for a 4×4 to the highlands which allowed us to sleep in the car. It was quite a saving compered to other options we looked at.

  8. Spot on! Especially recommend high end restaurant lunch offers, often cheaper than the nearest hamburger joint or pizzeria. And never BUY water in stores, just go to the nearest restroom and fill up anywhere in Iceland

  9. You should also check out my driving guide service Rentadriver.is
    You hire my service along with a Rental Car in your name. That way you get a Driving Guide directly and skip the middle man

  10. So excited! Can’t wait for it to come out! We were there in March and wished we had a guide from Rick!
    It is an absolutely amazing place. So many natural wonders! You are spot on about the cost of food and drink! So expensive!!! Very fresh fish, delicious! And the hot dogs are amazing!

  11. My brother and I returned from a 2-week trip to Iceland two months ago. I planned and researched this trip for 6+ months before our departure, and feel I had a great handle on what to see, where to go, and what to expect. First, Iceland is fantastic, but one needs to spend no more than a few days in Reykjavik, as it is becoming too touristy and busy! We wanted to get a taste for the country as a whole, so we rented a car, a very basic, small car. There is only so much one can see in 2 weeks, but the Ring Road is a MUST. Frankly, I’d skip the Golden Circle altogether, as it is overhyped. (If you have visited Yellowstone, you’ll be unimpressed.) Instead, head southeast. All along the Ring Road are sights and sounds you’ll never see anyplace else. Also, try to get to the Westfjords…off the RR, but simply the most wonderful sights ever. I found spending less time on the Snaffelles penensula in order to ferry across to the Westfjords a smarter choice. Pick the places you most want to see and concentrate on those! There is NO way to see and experience it all. We (being Seniors) were shocked at the prices of just about everything. To say staying in guest houses is a great option is an understatement….but we still paid a comparative fortune to have one tiny room with a bathroom down the hall shared by 3-4 rooms. Airbnb is a great option, but often booked well in advance, and not cheap, either. (But SO nice to meet the locals…IF the owners are on site! Often, you don’t ever see them.) Alcohol: drink the wonderful Icelandic beer, and forget wine altogether; even in the airport or state liquor store, there is little selection, and horribly expensive. Food is astronomically priced; We often paid over $100 for 2 persons for a dinner with one glass of beer. However, sampling Icelandic food is a must, so just budget accordingly! Our greatest desire was to have a cup of coffee and oatmeal (or a simple breakfast….Starbucks-style?) each morning early before our departure, but there are no “coffee shops”, and no place even in summertime, opens before 10am. Because we were driving, we were on the road by 8am. So, great advice would be to carry portable coffee packets, and a cooler to keep snacks, milk, cream, etc. in the car. One notable exception: Reykjavik Roasters in Reykjavik is outstanding! But they have no locations in other villages. And I do mean villages…you won’t run into many larger towns. (Thankfully!) I suppose my overall suggestions to those traveling to Iceland would be: DON’T go in June, July or August, if you can help it; the already exorbitant prices of everything is inflated. DO try Airbnb and use Trip Advisor, or some other helpful online guide. DON’T expect to find inexpensive food: you’re there to sample the cuisine, so prepare for that in your budget. Drink beer instead of wine. Rent a car and expect to drive 4-6 hours a day, including the numerous stops to see all the sights…most of which are free! I agree to skip the Blue Lagoon, expensive and quite Disneyland-ish. Skip the Golden Circle, unless you’ve never been to Yellowstone. Exception: The area where the tectonic plates meet….absolutely fascinating. Do expect lots of walking/moderate hiking to see some of the most fabulous waterfalls ever. Skip all touristy souvenir shops, which comprise most of the shopping in Reykjavik (the area around the Old Harbour is wonderful, however). If you MUST buy woolen goods, expect to pay a lot. (Do you really need that sweater?). I am ready to take my second trip to Iceland, but this time in the winter months to see the Aurora Boreales, and probably will consult with a good tour. And lastly: See Iceland SOON: there is so much construction happening now, it will be a tourist trap so soon, and will lose all the charm that exists…and will become just another tourist destination…like Yellowstone. I am looking forward to your book, Rick!

  12. I am in the process of researching a driving trip in Iceland in 2018. I appreciate all the dos and don’ts listed here. Appreciate all the information on tours and car/room rentals. Plan on bringing a sleeping bag so room rental will not be as high.

  13. I was an exchange student in Iceland in 1982. I returned as often as I could over the years. So much has changed in every way – but the landscape of course remains timeless. Prices have come down significantly as the economy makes way for the larger number of tourists. One quick tip is to drive straight to either Netto grocery store in Keflavik. They have a good selection at okay prices, including a whole section of boxed organic juices, almond milks and various nutrition bars. If you are vegetarian or vegan, this is a great resource before hitting the road. You can leave from Keflavik and bypass Reykjavik completely on your way to the beautiful countryside.

  14. All of the suggestions are right on. Having just done the Ring Road three weeks ago, we agree with everything that was said, especially about bringing the coffee packets and using airbnb. Farms are also a good place to stay. A word of warning: I did not find Iceland to be very gluten free friendly as a Celiac. Cross contamination was a problem, so I brought quite a bit of food in my checked and carry on bags. TSA gave me a hard time, saying I should carry a note from my doctor, but I was allowed through without one. The Blue Lagoon pales in comparison to the Lake Myvatn Baths. And as Rick says, especially in the north, when you see a public restroom, “Just try.”

  15. We spent 3 nights in Reykjavik 4 years ago. My favorite building was the Harpa Concert Hall, a spectacular building made of glass which is on the harbor. During the day we walked in–there was no security or anything (Toto, I don’t think we’re in the USA anymore), hardly any people inside at that hour. We were able to walk all around the building. At night the windows light up with flashing colored tubes–really magical. I walked along the harbor by myself at 1am–this was in mid-May so it wasn’t completely dark–and felt safe. We weren’t actually able to go to a concert but I’m sure that would be great.

  16. We just got back from 5 days in Iceland, on a return trip from Ireland. We brought our two teen sons, got a reasonably priced rental car ($218), cooked our own food/ packed lunches for the road trips, and stayed in an Airbnb, all as mentioned in tips above. We even brought our own Via coffee. Coming from Seattle, it was a bummer not to find “real” coffee shops with baristas – they mostly use push button machines for their coffee drinks. There are some beautiful places to see and we were lucky to have great weather, but I have heard from many who had poor weather which really limited their experiences.
    One car tip: Note you can get CDW (collision damage waiver) covered in Iceland if you rent with a Citibank Visa card (that’s our Costco card) AND there is a new Costco in Reykjavik (as of this summer) . The gas at Costco is 30% cheaper than elsewhere and you can buy it using your regular Costco card from the US, (with a Visa card) Even though the store has some better prices than most markets, it is still very expensive! However the Hot dog and coke combo there at the food court is only $3. :)
    We definitely saved money and time by driving to all the tourist spots on the Golden Circle and the Southeast route of the ring road to Vik. The roads are good. Having traveled pretty extensively throughout Europe and south america, plus National parks in the US, I do not feel a need to return to Iceland anytime soon- there are many equally (and more) beautiful places to see while not killing the travel budget. So, as long as you know that costs are very high before going, and you still want to check Iceland off your list, go see it.

  17. It’s been some 10 years since I met Rick Steves in Reykjavik. We talked about the possibility of a guide book for Iceland. I’m happy to see it is on its way. One way to see Reykjavik affordably is to rent a bicycle and use a map and advise from Reykjavik Bike Tours. It is also affordable to travel around Iceland by bicycle. You can either bring your own bicycle or rent a bicycle.

  18. Does anyone have advice for traveling in Iceland in February? My daughter and I are going in early February, hoping to see the Northern Lights. Thanks.

  19. My husband and I traveled Iceland last July. This is a remarkable country and we plan to go back. Glad RS is putting out a new book on Iceland it will be fun to read. I did research on Iceland before we went – we rented a car and drove the ring. Even during the busy time of July it wasn’t that busy even at the tourist stops. My biggest recommendation is take your time and drive the ring amazing beauty and stop at all the waterfalls. Our favorite area was staying in Husavik and the Snaefellsnes Penninsula but anywhere in Iceland is special. Get good hiking shoes!

  20. My wife and I were there for a couple of days in 2015. We really enjoyed Iceland. We rented a car. Our only regret is that we didn’t rent their GPS system because of their alphabet. We brought our GPS system which limited us to where we would be able to go. We loved the Blue Lagoon. The food was great. We would love to go back there. Iceland was a part of a 2.5 week driving tour of Europe (Germany, Switzerland and Austria).

  21. For Meredith and her daughter going in February. We were there for 6 nights in February 2017. Never got below 40 degrees. Rained every day. On and off each day, never a complete washout. However to see the Northern Lights you need both clear sky and solar activity. We never saw the Northern Lights due to the rain and cloudy conditions. Hopefully you will have better luck. I highly recommend going.

Leave a Reply

Your email address will not be published. Required fields are marked *