Iceland. It leaves you spellbound as you wander from place to place, your eyes feasting on the majestic vistas. “How could such a tiny island have such a diverse and beautiful landscape?” you think to yourself. It is the land of sheep, northern lights, volcanoes with unpronounceable names (try Eyjafjallajökull), and high prices. It quickly became one of my favorite countries in the world after my first visit. It’s such a beautiful country filled with warm and welcoming people (who are also beautiful). The landscape here is like nothing else in the world. It’s magic! Everyone told me Iceland would blow my mind. It did, and I can tell you it will do the same for you too. And with this travel guide, you can learn how it won’t blow your wallet in the process!
Hostel – Hostel dorms cost between 3,500-7,500 ISK per night and Hosteling International members get 650 ISK off. Private rooms cost around 11,500 ISK per night for HI members, and for non-members, it is 12,500 ISK. Most of the hostels in the country are HI hostels, though KEX in Reykjavik is an amazing hostel that isn’t part of the HI network!
Hotels – Hotels are generally pricier than your hostels and guesthouses. One thing to keep in mind is that not all hotel rooms are going to have a private bathroom. You can expect to pay around 20,000 ISK and up per night for a double room with a private bathroom, and about 13,000 ISK for a basic room without a private bathroom. Since hotels are so expensive in Iceland, I much prefer to rent a room or apartment on Airbnb. Shared rooms can be found for around 6,500 ISK and entire homes/apartments start at 12,000 ISK. If you’re traveling in a group, Airbnb is likely your most affordable choice — just be sure to book early as the cheapest accommodation will disappear first!
Average cost of food – Eating out, even on the cheap, costs about 1,300 ISK or more per meal. At this price point, you’re looking at sandwiches, kebabs, soups, and other “quick meals.” You can find small sandwiches for around 1,000 ISK at some of the outdoor kiosks. For main dishes from a sit-down restaurant with table service expect to pay at least 2,000 ISK. Happy hour beer is around 700 ISK, while non-happy prices range between 1,000-1,200 ISK. Groceries (basic pasta, eggs, skyr, rice, chicken, and some veggies) will cost 8,700 ISK per week. For cheap meals, consider the hot dog vendors that line the streets of major cities. They cost 400-500 ISK for a basic dog (without added toppings). Surprisingly, a decent place to eat cheaply in Iceland is at the gas stations. Most gas stations are stocked full of food, selling everything from deli sandwiches, pizzas, Icelandic soups, hot meals, fruit, and they have whole aisles of candy! It’s good-quality fast food and I highly recommend it if you want to save money!
Transportation costs – During the summer months, you can purchase a countrywide bus pass for 42,000 ISK. Bus tickets start from 3.50 ISK (within Reykjavik for a single ride) to being free in some cities (like Akureyri). The popular bus route that runs from Reykjavik to Akureyri costs about 8,800 ISK. Car rentals cost about 5,350 ISK per day, with gas costing around 192 ISK per liter. Hitchhiking is a recommended way to travel here if the temperatures aren’t so cold that it makes waiting outside unbearable.
Suggested daily budget – 6,900 ISK–8,600 ISK / 60-75 USD (Note: This is a suggested budget assuming you’re staying in a hostel, eating out a little, cooking most of your meals, and using local transportation. Using the budget tips below, you can always lower this number. However, if you stay in fancier accommodation or eat out more often, expect this to be higher!)
Money Saving Tips
- Hitchhike – Iceland is one of the easiest and safest countries in the world for hitchhikers (in fact, it’s THE safest country in the world!). You can find rides throughout the country, though it’s especially easy in the southern part of Iceland. While harder, it’s also not impossible to find a ride in the off-season or in the less populated northern regions. One way to find rides is asking around in hostels — people are usually driving the main Ring Road (M1) that circles the country and there are only two ways to go on that! That’s how I found my rides.
- Bring a water bottle – The water in Iceland is incredibly clean and drinkable. A plastic bottle of water costs about 350 ISK. There’s no reason to buy water here.
- Camp – Camping is available everywhere in Iceland. You can camp in designated campgrounds for about 1,600 ISK per night and some hostels allow you to put up tents too. You’ll need to have your own gear and sleeping bag. If you plan on camping often, consider purchasing the Campingcard as it can save you quite a bit of money. If you really want to reduce your costs, you can wild camp and not pay any fees (i.e. just sleep anywhere you want!). It’s legal as long as there’s not a sign posted to the contrary, or provided it’s not in a protected wildlife area (or the ancient moss). The locals are beginning to frown on this, so be sure to be respectful!
- Bring your own sheets or sleeping bag – Like in other Scandinavian countries, many hostels in Iceland charge you a fee for bed sheets if you don’t have your own or a sleeping bag (pillows are free!). Linen fees begin at 1,350 ISK, however, be sure to review your hostels thoroughly as some will not allow you to bring your own sheets/sleeping bag.
- Don’t drink – Due to high taxes, it’s very expensive to drink in Iceland. Save money, don’t drink. Ok, maybe once in Reykjavik since its nightlife is world famous. But other than that, don’t. You’ll save a bundle and feel a lot better. No one wants to hike a volcano with a hangover.
- Cook your own food – With dining out being a pricey option in Iceland, I found the best thing to do is go grocery shopping. Buy everything you need (such as eggs, cereal, pre-made sandwiches, and pasta) and cook it yourself. All hostels, guesthouses, and campsites have kitchens. Make sure to shop at BONUS food stores as they have the cheapest prices.
- Eat the hotdogs – If you are going to eat out, eat at the sandwich and hotdog stalls you find throughout the cities. They offer the cheapest (although, not the healthiest) food in the country. A hotdog costs about 400-500 ISK and a sandwich will run you about 940 ISK (with a drink is about 1,350 ISK). You can also find cheap hotdogs at many gas stations, too.
- Couchsurf – Iceland has a very active Couchsurfing community. I stayed with hosts in Reykjavik and Akureyri. Getting involved with the community here is a sure-fire way to save money, get local insights, meet wonderful people, and get a free place to stay.
- Rent a car — If you are coming in the off months, staying for a week or less, traveling in a group, or don’t want to hitchhike, I suggest renting a car. Rentals start at 5,350 ISK per day, and you can split the costs with traveling companions to help lower your expenses. You’ll get a lot more flexibility than if you take the bus, and it will be cheaper, too. The best of Iceland isn’t found along its main highway! SADcars and Car Rental Iceland offer the cheapest car rentals in the country.
- Use Samferda – This website is very popular and you’ll find a lot of listings on it, especially between some of the big cities. (Note: You can also use this website to find rides. Even if you have to pay the driver, prices are about 50% of the cost of the bus.)
Top Things to See and Do in Iceland
- Check out the Jökulsárlón glacier lagoon – Located in the southeast of Iceland, this ice flow is only a couple of decades old and one of the most popular attractions in the area country. I enjoyed just sitting down and listening to the ice crash into each other on its way out to sea. For an up-close look at the glaciers, consider exploring the lagoon by boat. Jökulsárlón recently became the deepest lake in Iceland, as the melting glaciers have caused the lagoon to expand. It has also been a setting for several Hollywood movies, including Die Another Day and Batman Begins!
- Visit the Mývatn Nature Baths – These were quieter and less expensive than the famous Blue Lagoon outside Reykjavik. I relaxed here by myself for over an hour mellowing out in the warm waters. The geothermal spa offers the most relaxing natural bathing and is the most tempting attraction. The water from the underground hot springs reaches 37–39 °C and is beneficial for health and skin. Grab some local geyser bread that they sell at the little cafe and relax! Admission is 4,000 ISK during the peak season, and 3,500 ISK during the low season.
- Take a Game of Thrones tour – The harsh climate north of the wall in HBO’s hit series was predominantly filmed in Iceland. Explore the film locations on a guided tour, with both single- and multi-day options available. If you’re a die-hard fan of the series this tour is for you!
- Soak up in the Blue Lagoon – While I found the Mývatn baths to be a more relaxing and less expensive option, you cannot deny that Iceland’s most famous geothermal pool is the country’s top tourist attraction. It might be crowded and expensive, but there’s nothing like it in the world. This huge, milky-blue spa is fed by mineral-rich heated seawater from the nearby geothermal plant. Add the silvery towers of the plant, rolling clouds of steam, and people covered in white mud, and you’ll think you’re in the twilight zone – in a good way! Admission starts at 5,200 ISK during the low season and 6,400 ISK during the peak season.
- Watch the Northern Lights – Seeing them in person is one of the most awe-inspiring things I ever witnessed. Words will never do them justice! The lights are best admired in the remote places, further from the city’s bright lights. The best time to catch them is from mid-September to mid-April. The northern lights usually tend to be very active for two to three nights, then low for four to five nights. However, it’s a crapshoot! The longer you stay the north, the better your chances!
- See the waterfalls – “Foss” means waterfall in Icelandic, and you’ll find a lot of waterfalls throughout the country. Iceland is overflowing with these natural beauties! Dettifoss, located in the north, is the most powerful waterfall in Europe. Gullfoss can be found in the Golden Circle and is one of the biggest waterfalls in Iceland. Located in a canyon which forms three step terraces, the river Hvítá plunges from a height of 32m to create this majestic force of nature. There are no rails – just natural surroundings. Gullfoss is strongest in summer and is a must-see when in Iceland. Other noteworthy waterfalls are Seljalandsfoss, Skogafoss, Svartifoss, and Goðafoss.
- Spend some time in Thingvellir National Park – This national park and UNESCO World Heritage site is interesting for two reasons: it’s the original site of the longest-running parliament in the world, and it’s also where the North American and European continental shelf plates are being torn apart. Pretty cool, huh?
- Visit the Maelifell Volcano in Myrdalsjökull Glacier Park – The perfect cone makes Maelifell a classic looking volcano. During the warm season, snow uncovers a lavish green surface, covered with moss. There is plenty to do and see in the park, full of volcanoes, hot springs, and other beautiful sites. During the winter, a lot of the roads in the park will close, so the summer season is the best time to go if you want to see the volcano.
- Check out the geysers – Due to the volcanic activities underneath the surface, a lot of geysers, underground springs, and thermal pools are scattered all around the country. To see a powerful hot stream shooting from the ground is definitely exciting. Strokkur, in the southwest of Iceland, beside the Hvítá River, is a popular fountain geyser. Many geysers are found in Haukadalur in the south of the country.
- Hike the Golden Circle Tourist Trail – During the summer months, hiking in the highlands of Iceland becomes a popular pastime. If you want a truly breathtaking experience, stand at the rift zone on the edge of the North American Plate and look towards the rift at the Eurasian Plate in the distance – talk about a riveting experience! Other stops include Kerið volcano crater, Hveragerði greenhouse village, Skálholt church, and the Nesjavellir or Hellisheiði geothermal power plant.
- Head out on the Laugavegur trail – This 55km trail that runs between Landmannalaugar and Þórsmörk is as popular a destination for locals as it is for foreign visitors, and remains one of the most extraordinary walking trails in the world. It offers a great variety of landscapes, mountains in various colors, hot springs and glaciers, rivers and lakes. Its well-worn treads, cozy huts, a steady stream of trekkers, and frequent wood marking posts make it a relatively safe and logistically easy venture. You can stay in huts for about 4,600 ISK per night, or camp in the designated areas outside the huts for a mere 1,200 ISK per night.
- Hike the Fimmvörðuháls Trail – If 55km is too much, try your hand at the shorter (but equally as stunning) Fimmvorduhals trail. Stretching between Þórsmörk and Skógar, this trail can be done in a day or broken up into a two-day adventure. You can either camp or book one of the mountain huts located along the route. Just be aware: the huts sell out fast!
- Go fishing – Everybody knows that Iceland is famous for its fish. With tons of salmon and trout fishing rivers and lakes, there are many options to check out if this floats your boat. The water is teeming with life, and tours are increasingly popular – especially in the Westfjords region, in the city of Suðureyri. You can join an actual fishing crew for the day.
- Explore the Skaftafell Ice Cave in Vatnajökull National Park – Aptly named the land of ice, this country is literally covered in ice and snow. The overwhelmingly beautiful ice caves attract adventurers from around the globe. The travel agencies organize trips to the glaciers, from where the caves can be visited. Be sure to visit in winter, when the ice doesn’t melt and it is safe to enter.
- Go whale watching – While this isn’t the most budget-friendly activity, it is definitely an amazing to experience! Around Iceland, there are more than 20 different species of whales that frequent the waters, and you will often see dolphins and harbor porpoises on the trip as well. You can find a myriad of tours available, and most of them last about 3 hours. The prime whale-watching season is from April to September, with most tours leaving from the south (Reykjavik) or north (Akureyri).
- Go to Landmannalaugar – The multicolored rhyolite mountains, lava fields, and the Hekla volcano make it a popular tourist destination. The striking landscapes look like a different planet. Hiking and horseback riding are among the most popular activities here. You can visit here anytime, although summer might be the best time to go.
- See Kirkjufell Mountain – Near a small town of Grundarfjörður in western Iceland, the mountain beautifully sticks out in a plain landscape. Surrounding this striking mountain you can find a bunch of smaller waterfalls, and hopefully catch the Northern lights if you are lucky.
- Hike the Snaefellsnes peninsula – Stretching out from the west coast, this peninsula is topped by a large national park. It’s a great place to take a hike or a stroll along the windy and winding coast. There are numerous hills and mountains to climb, including Snæfellsjökull. If you’re feeling adventurous (and have the money!) book a glacier walking tour.
- Search for puffins – Puffins can be spotted nesting all over Iceland between mid-April and mid-August. The larger populations can be found on the Westman Islands and in the West Fjords, as well as in certain parts of the East Fjords. While you can try and spot some yourself (ask locals for help!) you can also book a tour to see them up close.
- Spend some time in Reykjavik – Reykjavik is awash in thriving cafes, high-energy clubs, friendly pubs, and a brightly colored old town with rows of wooden houses clustered together. It is one of the trendiest cities in the world, as Icelanders are obsessed with design, technology, and architecture. Though it’s super small, it’s worth a few days to really get a feel for the art and cafe culture of the city. If you’re a night owl, you’ll love the party life here (Icelanders know how to drink) but be warned that they don’t go out until about midnight!
- Take a culinary tour – If you aren’t up for making your own food, get a taste of the cuisine by taking a culinary tour in Reykjavik. Take your taste buds on a journey and try different kinds of Icelandic dishes, washing them down with local micro-brews.
- Take a trip to the National Museum of Iceland – This museum in Reykjavik contains informative exhibits about the first settlers, Christianity in Iceland, the island under both Norwegian and Danish rule, and the independence movement. While not terribly large (you can probably get through it in a couple of hours at the most) it’s a great visit if you are interested in knowing more about the history and culture of the people. General admission is 1,500 ISK.
- Take a course at the Icelandic Elf School – While not many people actually claim to believe in elves, trolls, and hidden people, there are similarly few people in Iceland who categorically do not believe in them. The Icelandic Elf School is a school in Iceland that teaches students and visitors about Icelandic folklore. The school teaches about the hidden people and the 13 different kinds of elves that the school believes inhabit the country of Iceland. This is probably one of the strangest things to check out while in Reykjavik, which makes it one of the best. While the 6,450 ISK cost might be a little high, you also get a meal of pancakes and jam, teas, and chocolates to go along with the 3-4 hour lecture!