When to Go
Iceland is cold (though not as cold as you’d expect — temps don’t often drop much below 30F/-1C) and dark in the winter. Summers are warm…er, reaching highs of around 70F/21C in midsummer, when the days stretch into night and the sun barely sets.
Of course, this is when everyone wants to visit, and when prices for flights and hotels are the highest. Come in late fall or early spring instead to take advantage of rock-bottom hotel prices and cheap flights. The savings on airfare alone can reach 50%.
Icelandair only operates out of a few U.S. airports, so your best bet is to book tickets to your departure point separately if you don’t live in a hub city.
A more roundabout option is to score cheap tickets to a European city and connect from there to Reykjavik on Iceland Express, the country’s low-cost carrier. Tickets from cities like Copenhagen can be as low as $100 round trip.
Taxis from the airport to downtown Reykjavik run as high as $100 one way. A cheaper option is the Flybus, which costs around $17 and drops passengers at the BSI Bus Terminal, a 5-minute walk from the city center.
Make It a Short Stay, or a Combo Trip
It’s a simple equation — spend less time in the country and you’ll spend less money. You can get a good taste in a few days, and because Iceland is just over 5 hours from New York, you won’t feel compelled to stay longer to justify the lengthy plane ride.
You can also combine a trip to Iceland with a few more days in another European city. Icelandair offers free stopovers in Reykjavik on your way between Europe and the U.S.
There’s no need to hire an expensive driver or shell out for tours to see the major sites around Reykjavik. Rent a car for around $70/day and set out to explore the Golden Circle yourself.
You’ll drive through Thingvellir National Park and an awesome landscape, dotted with rifts where two tectonic plates are moving apart. The gurgling Geysir no longer erupts, but nearby Strokkur still puts on a reliable show. The thundering Gullfoss waterfall is also nearby.
Along the way you can stop to make friends with the short, stocky (don’t call them ponies), and incredibly inquisitive Icelandic horses.
If you plan on venturing further out, costs are going to add up. Many portions of the Ring Road that circles Iceland are unpaved and you’ll need to spring for a 4WD vehicle with extra insurance.
Don’t need a car for the whole trip? Arrange to pick it up and drop it off at different locations, which most companies will allow you to do for free or for a very small fee.
Self-Cater and Save on Dining
Dining in Reykjavik is expensive — save by staying in accommodations with a kitchenette so you can cook for yourself.
For cheap eats, try one of the famous Icelandic hot dogs, addictive tubes of grilled lamb meat topped with mustard, ketchup, gravy, remoulade, and onions, which cost under $3.
Get your seafood fix at Icelandic Fish and Chips, an organic bistro with a rotating selection of freshly caught, battered and baked fish.
Tapas Barinn may sound like it specializes in Spanish cuisine, and while it does serve some traditional tapas dishes like patatas bravas and calamari, it also offers the Icelandic specialties of smoked puffin and grilled whale. Since portions are small (like the prices) you can try some of the more unusual local fare without fearing you’ll waste money.
Don’t Blow Your Booze Budget
Being on a tight budget doesn’t mean you have to miss out on the famous Rúntur, the all-night weekend pub crawl on Laugavegur Street in Reykjavik. Just do as the locals do and start your imbibing at home.
Stock up on booze at the airport duty free when you arrive and save as much as 60% off prices in the local liquor store. Arriving at the club well-tipsy avoids the need to buy rounds of $6-$8 beers.
Get Your Lopapeysa from a Granny
Distinctive handmade sweaters called lopapeysas are the quintessential Icelandic souvenir, but they’re expensive at up to $200 each.
Breeze past the souvenir shops on Laugavegur Street and head for the Kolaportid weekend flea market. Here you’ll find little Icelandic grannies selling hand-knitted sweaters for less than half the going tourist rate.
Do-It-Yourself Northern Lights Tours
Plenty of companies will offer to take you out for a viewing of the Northern Lights.
The trouble is, cloud cover can make the phenomenon difficult to see even during the prime season, so there’s no guarantee.
Instead of shelling out for the chance to stare up at a cloudy night sky, keep an eye on the Northern Lights forecast. When conditions are right, drive your rental car back out to Thingvellir National Park for your own private show.
On the best nights you won’t even have to do that — they’ll be visible from downtown Reykjavik.
Save on Your Soak
While soaking in the Blue Lagoon is an unforgettable experience, it’s also kind of pricey at around $35 a session. Visit one of Reykjavik’s many public swimming pools instead. They’re open year round and heated from thermal spring water.
Get Money Back
Any foreigner who spends more than 4000 kronur ($31.50USD, as of Aug. 7) in a store should pick up a form that entitles them to 15% of the purchase price back as a tax refund. Keep the forms, fill them out, and collect the refund at the Tax-Free stand at the international airport. Ka-ching!
For an armchair tour of this amazing island, check out Photo Essay: Iceland’s Fire and Ice.