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How to Travel Iceland on a Budget

Iceland Insider Guides Budget Travel
by Candice Walsh Dec 5, 2013

I seem to be drawn to the world’s most expensive countries. Having already drained my bank account during a five-week stint around Ireland this year, the only logical thing to do next was book a three-week trip to Iceland. I regret nothing.

It wasn’t easy, but the challenge became a sort of game. I lucked out with a $450 round-trip ticket from Halifax, Nova Scotia. And the rest sorta went like this.

When to go

Peak season, as you might have guessed, takes place between May and September. I went in October.

This was mostly due to the ridiculously cheap airfare I found, but as it turns out, October was an amazing time to be in the country. Temperatures mostly averaged between 5-10 degrees Celsius, off-season prices were in full effect, and we ran into almost no tourists. It was absurdly easy to meet locals because of this.

Booze and nightlife

Drinking and bar hopping in Iceland was by far the most expensive part of the trip, but if you’re in Reykjavik, you owe it to yourself to experience the nightlife. Beer wasn’t legalized until 1989, and so it seems the Icelandic folk are now making up for lost time. The rúntur (literally, “round tour”) occurs every weekend in the city. Basically it’s the name given to the improvised “pub crawl” that sends Icelanders jumping place to place in search of spirits and fun. Sometimes I didn’t crawl into bed until 6am.

1. Pick up your booze in duty free.
At the Halifax airport, before flying out, my friends and I each picked up some supplies to get us through the weekend. What we DIDN’T think about, however, is that you can also pick up booze at duty-free in the Reykjavik airport when you land. Damn.

2. Pre-game.
This probably explains why the nightlife in Reykjavik doesn’t kick off until at least midnight, and it’s a popular tactic I use at home in Canada. Find a house party, get drunk, and THEN head out on the town. Note: The liquor stores (Vínbúð) have erratic hours and are few and far between.

3. Seek out drink specials and cheap bars.
On average, pints of beer were between 900-1000 KR ($7-8US). I’m pretty used to these prices in Eastern Canada, but my American friend Luke was distressed (I found out why upon discovering $3 pints in Florida shortly after my return). Many bars do happy hours, albeit early in the evening. BUT there’s also Olsmadjan Bar, a quiet pub with pints under $5US.

4. Just don’t drink at all.


In the great toss up between drinking beers and eating good food, beers always win. I likely spent most of my Iceland trip in a calorie deficit, living off ramen noodles and cheap burgers. Eating out in Iceland is kind of outrageous, actually. You get the cheaper fast food places like Subway with its usual prices but then even the pubs with their Americanized pub food are expensive as hell. I think I paid $20 for a bowl of soup one day.

Icelanders seem to empathize with this fact, though, and are pretty keen to please. I asked a server once to split my burrito between my friend and I, and it was delivered basically as two smaller portions for half the price.

The one big downside to this, of course, is that you’ll miss out on some epic and weird Icelandic food. On my final night in Iceland, I dropped one krona into a slot machine at the Casino and won $150US. I treated Luke and myself to a seven-course Icelandic food tasting menu at Tapas barinn for 5990ISK, or $50US. It included everything from a starter shot of Brennivín, tasty puffin drizzled in blueberry sauce, surprisingly tender minke whale in cranberry sauce, and lobster tails baked in garlic. Not a bad deal. If you splurge, splurge here.

Getting around

If you’re not hitchhiking (which is safe and common), the easiest and cheapest way to get around Iceland is with a rental vehicle. You can jump on buses and book tours, but the flexibility of having a rental is a million times more valuable. I went with two options.

1. KuKu Campers
A friend recommended these guys to me. Their camper vans can fit from 2-5 people, and since I was traveling with three other friends for three days, a camper just made sense. We rented a 5-person camper that sorta looked like a milk van but ran like a limousine, fully stocked with a stove, fridge, and central heating. It cost us about $475US between the four of us, so about $55-60/day each (accommodations included). Between the four of us we managed to spend around $57US each on gas, which really isn’t so bad.

You must be careful where you park overnight, however, especially in the off-season when many campsites are closed. On our final night we ended up getting kicked off someone’s private property, and so we drove to what we thought might be a campsite. That night turned into one of my favourites. We cooked up some pasta, drained the remainder of whiskey and rum supplies, and sat around the table playing card games and listening to music. When it was time to tinkle and brush our teeth, we pulled back the camper’s door and found ourselves surrounded by the Northern Lights.

2. SADcars
When Luke and I were on our own, SADcars was our cheapest option for a car rental to get around northern Iceland and the west coast. The cars are sad because they’ve had 10 years of experience on average, but ours didn’t seem particularly upset about it. We stalled out in traffic once, and sometimes we had some trouble starting, but other than that we made our way around easily.

If you’re visiting during the off-season like I did, you can rent a car starting from 48200ISK ($390 USD) for a whole week. Peak season is higher, starting at 90925ISK ($735US). Comparatively, Hertz starts at $439US in the off-season and a whopping $933 in the on-season. Budgeting for gas was trickier: Gas ain’t cheap, and averaged somewhere between $2-$2.50US per litre. We spent anywhere from $250-$350US for the week.

The car gave us a ton of freedom. We cruised to Akureyri, picked up a drifter named Nick, explored the Mývatn area, and chilled out in Husavik. We wrapped up our trip on the Snæfellsnes peninsula, having covered epic ground in seven days.


I booked with Airbnb for my time in Reykavik, which ended up working out nicely. My four friends and I stayed in a guesthouse for three nights, totaling $90US each. On our return from the road trip, Luke and I booked another spot for about $20US each per night. Both were downtown, and other than our sketchy Quasimodo neighbour at our second location, both places were fab.

Even in the off-season in the most remote areas, most hostels around Iceland are open. Some places we stayed in were basically empty, which is nice if you’re not expecting a party place. Beds in dorms average $20-$40/night. One of my favourites was the quiet, ultra-kitsch Bus Hotel in Reykjavik. They partner with SADcars, so you can get really excellent discounted rates when you book both at one time.

Also, for whatever reason, Iceland doesn’t like using bedding in their dorms. You’ll get charged extra for sheets and blankets, so just pack a sleeping bag and skip the whole mess.

My Couchsurfing experiences were my favourite in Iceland. In Husavik, we stayed at a young girl’s house and had a whole bedroom to ourselves. The same scenario happened in Akureyri, where we stayed with a fisherman named Vidir who turned out to be a legend in the Couchsurfing community. He fed us cod for dinner and took us out on a whale watching tour with Ambassador Tours. Icelandic hospitality at its finest.

I DID splurge one night in Mývatn, where I booked a stay at the Vogafjos Café Guesthouse. The great thing about hotels in Iceland is that many of them come with a breakfast buffet. We made simple sandwiches and stashed them in our bags when no one was looking, thus giving us free meals for a day. Stealth.

Seeing stuff

Here’s the best news, friends: All the best outdoor attractions in Iceland are free. Seriously. We didn’t pay any sort of park pass or attraction fee for any waterfall, glacier, mountain drive, or scenic walk. Not for the Hverfjall crater, nor Þingvellir Park. Other than the $6US elevator ride to the top of Hallgrímskirkja church, the only admission I paid was to the Mývatn Nature Baths for under $30 — big savings in comparison to the Blue Lagoon, and in a much less crowded environment.

Altogether, with flights included, I spent less than $1800 in Iceland for three weeks. That’s less than what I pay on an all-inclusive. And sure, maybe I consumed a great deal of questionable meat in the process, but I think I lost weight due to malnourishment, too. Win.

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