How to Save Money While Traveling in Iceland: A Comprehensive Guide

Iceland, with its otherworldly landscapes, stunning waterfalls, and unique geothermal features, is a dream destination for many. However, it’s also known for its high costs, which can make it seem like a challenging destination for budget-conscious travelers. Fortunately, with careful planning and some insider knowledge, you can explore this incredible country without blowing your budget. This comprehensive guide will provide you with practical tips on how to save money while traveling in Iceland, so you can enjoy all the beauty and adventure it has to offer without breaking the bank.

1. Planning Your Trip

1.1. Best Time to Visit

Low Season (November to March): The winter months in Iceland offer lower prices on flights and accommodations. This period is ideal for seeing the Northern Lights and experiencing Iceland’s winter landscapes. However, be prepared for shorter daylight hours and colder weather.

Shoulder Season (April to May, September to October): During these months, you’ll experience milder weather, fewer tourists, and lower prices. Spring and fall are excellent times to visit for a balance of good weather and affordability.

High Season (June to August): Summer is the peak tourist season, with longer daylight hours and warmer temperatures. Prices for flights and accommodations are at their highest. If you choose to visit during this time, book your accommodations and activities well in advance to secure the best deals.

1.2. Finding Affordable Flights

Book Early: Airfare can be significantly cheaper if you book several months in advance. Use flight comparison tools like Skyscanner, Google Flights, and Momondo to find the best deals.

Flexible Dates: If you can be flexible with your travel dates, you can find cheaper flights. Use fare comparison tools to identify the most affordable travel dates.

Consider Stopovers: Some airlines offer stopovers in Iceland on their way to other destinations. If you’re traveling to Europe or North America, look for airlines that provide this option for an extended Icelandic adventure at no extra cost.

1.3. Researching Travel Deals

Special Promotions: Keep an eye out for airline promotions and sales, especially during off-peak times. Sign up for newsletters from airlines and travel websites to receive updates on discounts and special offers.

Travel Packages: Look for travel packages that include flights, accommodations, and sometimes even tours. Travel agencies and websites often offer discounts on bundled packages.

2. Budget Accommodation

2.1. Affordable Lodging Options

Hostels: Iceland offers a range of hostels that provide budget-friendly accommodations. Cities like Reykjavik and Akureyri have several hostels with dormitory-style rooms and shared facilities. Websites like Hostelworld and Booking.com can help you find affordable options.

Guesthouses and B&Bs: Guesthouses and bed-and-breakfasts offer a more personal and often economical lodging experience. Look for local guesthouses with good reviews and reasonable prices.

Short-Term Rentals: Platforms like Airbnb and Vrbo offer rental options that can be cost-effective, particularly for families or groups. Renting an apartment allows you to prepare your own meals and save on dining costs.

Camping: Iceland’s diverse landscapes make camping a viable option, especially during the summer months. Look for campgrounds and facilities across the country. Camping in Iceland can be a budget-friendly way to experience its stunning nature.

2.2. Take Advantage of Discounts and Special Offers

Book Early: Booking accommodations well in advance can help you secure lower rates and availability. Many guesthouses and hotels offer early-bird discounts.

Look for Deals: Use booking platforms like Booking.com, Hotels.com, and Agoda to find special offers and promotions. Comparing prices and reading reviews can ensure you get good value for your money.

Loyalty Programs: Join hotel loyalty programs to earn rewards and access discounts on future stays. Many chains offer benefits like free Wi-Fi, room upgrades, and early check-in.

Essential Items Most People Forget to Pack When Traveling Abroad

3. Cost-Effective Transportation

3.1. Public Transportation

City Buses: Reykjavik has an efficient and affordable public bus system, operated by Strætó. Use the bus system to travel around the city and to nearby towns. Purchase a multi-ride pass or use the Strætó app for convenience.

Regional Buses: For travel outside Reykjavik, consider regional bus services like Sterna and Reykjavík Excursions. These services offer affordable options for exploring different parts of Iceland.

Icelandic Travel Passes: Look for travel passes that offer discounts on multiple journeys or attractions. The Icelandic “Reykjavik City Card” offers access to public transportation and discounts on various attractions.

3.2. Car Rentals

Book in Advance: Renting a car can be a cost-effective way to explore Iceland, especially if traveling with a group. Book your rental car in advance to secure better rates and avoid high airport fees.

Avoid Airport Rentals: Car rental offices located at airports often have higher fees. Consider renting from locations outside the airport for better rates.

Compare Prices: Use comparison websites like Kayak and Rentalcars.com to find the best car rental deals. Look for discounts and special offers to save on rental costs.

Gas Prices: Gasoline in Iceland is relatively expensive. To save on fuel, plan your routes efficiently and consider using fuel-saving driving techniques.

4. Save on Food and Dining

4.1. Embrace Local Cuisine

Supermarkets and Grocery Stores: Purchase fresh produce, snacks, and other essentials from supermarkets like Bonus, Krónan, and Nettó. Preparing your own meals can save you money compared to dining out.

Affordable Eats: Explore local cafes and eateries for budget-friendly meals. Iceland has numerous casual dining options that offer tasty food at lower prices. Look for daily specials and local favorites.

Picnics: Iceland’s scenic landscapes provide perfect settings for picnics. Buy local cheeses, cured meats, and fresh bread from markets to create a delicious and cost-effective picnic meal.

4.2. Avoid Tourist Traps

Avoid Dining Near Major Tourist Attractions: Restaurants located near major tourist sites often have inflated prices. Venture into local neighborhoods to find more reasonably priced and authentic dining options.

Ask Locals for Recommendations: Locals can guide you to hidden gems and lesser-known restaurants that offer great food at lower prices. Engage with residents or your accommodation hosts for dining suggestions.

5. Enjoy Affordable Attractions

5.1. Explore Free and Low-Cost Attractions

Natural Wonders: Iceland’s natural beauty is largely free to explore. Enjoy attractions like the Golden Circle, waterfalls such as Gullfoss and Seljalandsfoss, and geothermal areas like Haukadalur. Take advantage of the country’s many hiking trails and outdoor activities.

Reykjavik Attractions: In Reykjavik, explore free attractions such as the Hallgrímskirkja Church, the Sun Voyager sculpture, and the Old Harbour area. The city’s public spaces and parks provide opportunities for leisurely strolls and sightseeing.

Geothermal Pools: While Iceland is famous for its hot springs, some geothermal pools are more affordable than the popular Blue Lagoon. Visit local hot springs like the Secret Lagoon in Flúðir or the Myvatn Nature Baths for a more budget-friendly experience.

5.2. Take Advantage of Discounts

Tourist Passes: Research and purchase tourist passes that offer discounted entry to multiple attractions. The Icelandic “Reykjavik City Card” provides access to various sites and public transportation at a reduced rate.

Discount Days: Some attractions and tours offer discounted or free entry on specific days of the week or during off-peak times. Check local listings for these opportunities.

6. Budget-Friendly Activities

6.1. Outdoor Adventures

Hiking and Nature Walks: Iceland’s diverse landscapes offer numerous hiking trails and nature walks that are free to access. Explore areas like Þingvellir National Park, Landmannalaugar, and the Reykjadalur Valley for stunning views and outdoor activities.

Beaches and Lakes: Iceland’s unique landscapes include black sand beaches and volcanic lakes. Visit places like Reynisfjara Beach and Lake Mývatn for beautiful and budget-friendly leisure options.

Whale Watching: While some whale-watching tours can be pricey, many companies offer discounted rates or package deals. Look for budget-friendly tours in places like Reykjavik or Húsavík.

6.2. Cultural Experiences

Local Festivals and Events: Check local event listings for festivals, markets, and cultural events that may offer free or low-cost admission. Participating in local celebrations can provide a rich cultural experience.

Historic Sites: Explore historic sites and cultural landmarks in Iceland’s towns and cities. Many sites offer low entry fees and provide insights into Iceland’s history and heritage.

7. Money-Saving Tips

7.1. Currency Exchange

Avoid Airport Exchange: Currency exchange services at airports often have poor rates. Exchange money at local banks or use ATMs for better rates.

Use a Travel Credit Card: Opt for a credit card with no foreign transaction fees to avoid extra charges and potentially earn rewards.

7.2. Bargain Wisely

Negotiate Prices: In markets and local shops, bargaining is often acceptable. Don’t be afraid to negotiate prices to get the best deal.

Research Prices: Be cautious of tourist traps that may inflate prices. Research and compare costs before making purchases or bookings.

8. Sample Budget Itinerary

Here’s a sample budget-friendly itinerary for a one-week trip to Iceland:

Day 1-2: Reykjavik

Arrival in Reykjavik: Explore the city’s free attractions, including the Hallgrímskirkja Church, the Sun Voyager sculpture, and the Old Harbour area. Use public transportation or walk to save on travel costs.
Affordable Dining: Enjoy affordable meals at local cafes and street food vendors. Visit supermarkets to buy groceries for simple meals and snacks.

Day 3-4: Golden Circle

Travel the Golden Circle: Rent a car and explore the Golden Circle route, including Þingvellir National Park, Geysir Geothermal Area, and Gullfoss Waterfall. Pack a picnic for lunch to save on dining costs.
Budget Accommodation: Stay in budget-friendly guesthouses or hostels along the route. Look for deals and special offers on booking platforms.

Day 5-6: South Coast

Explore the South Coast: Visit waterfalls like Seljalandsfoss and Skógafoss, and enjoy the black sand beaches of Reynisfjara. Take a hike in the Vatnajökull National Park or explore the glacier lagoon at Jökulsárlón.
Affordable Dining: Eat at local eateries and purchase groceries for simple meals. Consider packing snacks and drinks for your day trips.

Day 7: Return to Reykjavik

Final Day in Reykjavik: Spend your last day exploring any remaining attractions or revisiting your favorite spots. Enjoy a final meal at a local restaurant and purchase any last-minute souvenirs before departing.

9. Practical Tips for Traveling in Iceland

9.1. Stay Connected

SIM Cards: Purchase a local SIM card for affordable data and calls. Companies like Siminn, Vodafone, and Nova offer competitive rates for mobile services.

Wi-Fi: Many accommodations, cafes, and public places offer free Wi-Fi. Utilize these to stay connected without incurring roaming charges.

9.2. Health and Safety

Travel Insurance: Purchase travel insurance to cover health issues, trip cancellations, and lost belongings.

Health Precautions: Follow basic health precautions, such as drinking tap water (which is generally safe) and being cautious with food hygiene.

9.3. Learn Basic Local Etiquette

Understanding basic local customs and etiquette can enhance your experience. Icelanders value politeness and respect. Familiarize yourself with local customs, such as greeting with a friendly “halló” and adhering to social norms and practices.

Conclusion

Traveling in Iceland can be a remarkable experience filled with natural wonders, cultural insights, and unforgettable adventures. By planning your trip carefully, booking in advance, and utilizing budget-friendly transportation and dining options, you can explore this beautiful country without overspending. Embrace Iceland’s unique charm, explore its diverse landscapes, and make the most of your adventure while keeping your expenses under control. Gangi þér vel (good luck) and enjoy your Icelandic journey!