Visit Iceland on a Budget - Saving Tips & Cost Breakdown
Budget travel in Iceland: save on food, lodging, car rental, and activities. Tips, prices, and affordable ways to explore Iceland without overspending.
Visiting Iceland doesn’t have to drain your wallet. While the country has a reputation for being expensive, smart planning can dramatically reduce your travel costs. With the right strategies, such as choosing budget-friendly accommodations, cooking your own meals, renting an affordable car, and focusing on free attractions, you can explore Iceland’s waterfalls, glaciers, hot springs, and coastlines without breaking the bank. This guide will help you enjoy the very best of Iceland while staying comfortably within your budget.
Tips for Visiting Iceland for Cheap
Traveling Iceland for cheap comes down to three basic principles:
- controlling accommodation and food costs,
- choosing self-drive over guided tours, and
- making the most of Iceland’s free nature-based attractions.
Below, you’ll find detailed tips to help lower your expenses at every step of your journey.
Save on Accommodation Costs
Accommodation is often the largest portion of a travel budget in Iceland. Hotels can be pricey, especially during summer, so choosing alternative lodging options can save you quite a bit of money. Whether you opt for campsites, hostels, Airbnbs, or economy hotels, you’ll find options that can significantly lower your nightly expenses.
Below are the most common types of accommodation in Iceland, including average price ranges per person per night and what travelers can expect from each option.
Campsites
Campsites are the cheapest accommodation option in Iceland, usually costing 1,500–3,000 ISK per person. Facilities vary but often include restrooms, showers, cooking areas, and sometimes laundry.
For travelers on a very tight budget, camping is an excellent choice, especially when paired with a rental car, camper, or roof-top tent setup.
Hostels
Hostels typically cost 4,000–7,000 ISK per person in shared dorms. They offer kitchens, common rooms, and social environments perfect for cost-conscious travelers. Private rooms are available at higher rates, but dorm beds offer the best savings.
Guesthouses & Farm Stays
Guesthouses and farm stays offer cozy, local experiences with comfortable rooms and optional breakfast. Expect prices between 8,000–14,000 ISK per person. Many are family-run and located in rural areas, great for self-drive travelers looking for peaceful nights.
Airbnbs (Private Room)
A private room in an Airbnb often ranges from 9,000–15,000 ISK per person, depending on the season and location. This is a good middle-ground between hostels and hotels, and you often get access to a kitchen which is great for saving money on food.
Budget Hotels
Budget hotels start at about 12,000–18,000 ISK per person, offering private rooms, breakfast, Wi-Fi, and better amenities than hostels or guesthouses. While more expensive, they provide comfort without the luxury hotel price tag.
| Accommodation Category | Average Cost Range (In Person / Per night) |
| Campsite | 1,500 - 3,000 ISK |
| Hostel | 4,000 - 7,000 ISK |
| Guesthouse & Farm Stay | 8,000 - 14,000 ISK |
| Airbnb (Private Room) | 9,000 - 15,000 ISK |
| Budget Hotel | 12,000 - 18,000 ISK |
Renting a Car & Camping
One of the cheapest ways to explore Iceland is to combine car rental with camping. With a Camping Card or access to low-cost campsites, you can travel around the entire country affordably.
A small economy car or an affordable camper with a roof tent keeps costs down while giving total freedom to explore. This approach eliminates expensive hotels and lets you wake up right next to some of Iceland’s most beautiful landscapes.
Minimize Food Costs
Food in Iceland can be expensive, but with the right habits, you can dramatically lower your meal budget. Understanding the cost of food in Iceland helps you make informed decisions between restaurants, supermarkets, and snacks.
Shop at Budget-Friendly Grocery Stores
Shopping at low-cost supermarkets like Bónus, Krónan, and Nettó will save you significantly. Avoid convenience stores like 10–11 and Extra, which are notoriously more expensive.
Cook Your Own Meals
Most budget travelers cook at least one or two meals per day. Hostels, guesthouses, and campsites often include kitchen facilities. Pasta, sandwiches, soups, and fresh produce are all affordable options from grocery stores.
Prefer Cheap Eats
Local fast-food spots, the famous Icelandic pylsur (hot dog) stands, and simple street-food restaurants offer meals for around 600–2,000 ISK making them far cheaper than sit-down restaurants.
Look for Happy Hours Deals
Alcohol is expensive in Iceland, but many bars in Reykjavík offer generous happy-hour discounts on drinks. Apps and local guides list daily offers, saving you money on nightlife.
Consider Self-Drive Instead of Guided Tours
Guided tours are convenient but the costs of these tours can add up quickly. Choosing self-drive gives you complete freedom for a fraction of the price. You pay only for your rental car and fuel, not per-person tour fees, making it ideal for couples, families, and groups.
Opt for an Affordable Car Rental in Iceland
Choosing a small economy car, hybrid, or older model can save you a significant amount while still giving access to Iceland’s main attractions.
Consider Visiting Iceland During the Shoulder Season
Visiting during late spring or early autumn can cut costs dramatically. Fewer crowds, cheaper hotels, and lower car-rental prices make it the most budget-friendly time to visit Iceland.
Book Your Car Rental & Flight Tickets Early
Early bookings, especially for summer, can reduce prices by up to 30%. Flights and rental cars are often cheapest when reserved several months ahead.
Enjoy Free Activities & Self-Drive Tours
Iceland is one of the best destinations in the world for free natural attractions. Nearly all waterfalls, beaches, cliffs, canyons, and national sites cost nothing to visit.
The Golden Circle
An iconic route including Thingvellir, Geysir, and Gullfoss, all completely free to explore and perfect for a one-day self-drive.
Iceland South Coast
From waterfalls to black-sand beaches and glaciers, this region offers some of Iceland’s most dramatic scenery at zero cost.
The Ring Road
Driving the famous Ring Road is one of Iceland’s top experiences, offering endless free viewpoints, walking trails, fjords, volcanoes, and coastline.
Join Free Reykjavík Walking Tours
Reykjavík offers excellent tip-based walking tours covering history, culture, and city highlights.
Enjoy Public Swimming Pools
Public pools cost only 800–1,200 ISK and offer hot tubs, saunas, steam rooms, and warm geothermal pools—an affordable Icelandic cultural experience.
How Much Should You Budget for Your Iceland Trip?
Your budget depends on your travel style, itinerary length, time of year, and accommodation choices. Here’s what to expect based on typical spending patterns.
3-Day Trip
For short Reykjavík-based trips with self-drive day tours like the Golden Circle, expect 45,000–70,000 ISK per person depending on lodging and car type.
7-Day Trip
A weeklong trip with mixed hostels/guesthouses and a small rental car usually ranges from 120,000–180,000 ISK per person, including fuel costs and food.
10-Day Trip
A full Ring Road adventure typically costs 170,000–230,000 ISK per person, assuming a mix of cooking meals, staying in moderately priced accommodation, and affordable car rental.
Frequently Asked Questions
Here are answers to some of the most common questions about traveling Iceland on a budget.
Can you visit Iceland with a limited budget?
Yes. With self-drive, affordable accommodation, grocery-store meals, and free attractions, Iceland can be explored comfortably even with a modest budget.
Is it cheaper to rent a car rather than going for guided tours?
Absolutely. Renting a car is significantly cheaper—especially for couples, families, and groups. Instead of paying per-person tour prices, you pay a single vehicle cost.
Is camping in Iceland expensive?
Camping is one of the least expensive ways to travel. With the Camping Card, costs drop even further, allowing access to multiple campsites for a fixed price.
Exploring Iceland on a Budget: Yes, It’s Possible
With smart planning, affordable car rental options, and a focus on nature-driven experiences, Iceland becomes surprisingly budget-friendly. Renting a small economy car or compact SUV is one of the best ways to keep costs low and maintain full flexibility during your trip. Check out our car rental options, and start planning your Iceland adventure today.
