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Top 10 Budget Tips for Iceland

Updated: Mar 8, 2018

This summer, I traveled to Iceland to work on the brand-new Rick Steves Iceland guidebook (coming in March 2018). And, like a lot of travelers, I experienced some sticker shock in one of Europe’s most expensive countries. Here are my best strategies for keeping costs down while fully experiencing Iceland.

1. Consider Airbnb. Airbnb and similar sites rent properties that are typically far cheaper and more spacious than a hotel room, provided you’re willing to forego big-hotel services (such as a reception desk and daily cleaning). Airbnb can also get you into more local-feeling neighborhoods; sleeping in a Reykjavík suburban home is both cheaper and more Icelandic than a hotel in the touristy downtown.

2. Be willing to “go” down the hall. While Icelandic hotels are pricey (starting in the $250 range), its characteristic guesthouses can be affordable (closer to $150). These typically offer basic rooms with a shared bathroom, which cost even less than en-suite rooms.

3. Have a big lunch and a small dinner. Even the fanciest restaurant offers excellent-value lunch specials for around $25 — allowing you to sample a high-end chef affordably. Savor a quality restaurant lunch, then picnic or grab cheap takeout at dinner (when most restaurants drastically increase prices — upper-midrange places charge $40-50 for an entrée). For Icelanders, takeout pizza, the IKEA cafeteria, or the corner hot dog stand provide a cheap and handy meal, just like back home.

4. Picnic. In general, cultivate the art of picnicking in atmospheric settings. Seek out Iceland’s discount supermarket chains — Krónan and Bónus — and use them to stock up. Be careful picnic-shopping at the ubiquitous convenience stores, which are far more expensive. And consider bringing a few staples from home. For example, in a land where a basic takeaway coffee costs $5 a cup, “importing” a few packets of Starbucks Via helps you caffeinate cheaply.

5. Know what’s included. Every restaurant happily provides a free carafe of tap water — just ask, and don’t feel obligated to purchase a drink. And if you’re paying for unlimited soup and bread, don’t be shy about going back for seconds. Since Iceland has no tipping custom, and taxes are included, you’ll pay exactly the price you see on the menu.

6. Economize on alcohol. Alcohol is priced at a premium, particularly in bars and restaurants. Seek out happy hours, when prices drop by as much as half. Stock up at the airport duty-free store on arrival — with the lowest prices in Iceland — or at a government-run liquor store (called Vínbúðin).

7. Consider renting a car. In many places, taking public transportation can save you plenty over the cost of renting a car. But in Iceland — where the best attractions are deep in the countryside, reachable only with a pricey excursion — this thinking is often a false economy. For example, a couple based in Reykjavík for three nights might pay for all-day excursions to the Golden Circle ($100 per person) and the South Coast ($150 per person), plus the transfer from the airport to downtown ($40 per person round-trip) — that’s nearly $600, compared to about $450 for a comparable-length car rental. To reduce rental costs, skip the options you don’t need: Since it’s cool and breezy even in the peak of summer, you can pass on the air-conditioning. And, unless you’re here in winter (when roads can be dicey) or plan to venture far off the beaten path, a casual tourist doesn’t need four-wheel drive.

8. Skip the Blue Lagoon. While the Blue Lagoon spa is famous, and a highlight for many visitors, a basic ticket in peak times starts at $80 — nearly ten times as much as Iceland’s many thermal swimming pools. Reykjavík alone has more than a dozen municipal pools with water just as hot as the Blue Lagoon’s, and that provide a far more authentic Icelandic experience. If visiting several pools, invest in a shareable multi-visit card.

9. Sightsee Selectively. Icelandic museums are typically quite small, well-presented, but expensive (admissions are often $15-20). To stretch your budget, choose carefully, and don’t assume every museum is a worthwhile investment. If you’ll be sightseeing a lot in the capital, consider a Reykjavík City Card. Fortunately, many of Iceland’s best attractions — its natural wonders — are free (though a few charge for parking).

10. Splurge where it counts. When you do splurge, choose an experience you’ll always remember: Naturalists invest in a whale-watching tour, foodies splurge on culinary walks and the occasional high-end restaurant meal, and adventurers spelunk through a lava cave or hike across a glacier.

For lots more advice on traveling to Iceland, look for the new Rick Steves Icelandguidebook — coming in March of 2018. Thanks to that book’s co-author, Ian Watson, for his many practical, money-saving insights.


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