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Iceland has skyrocketed in popularity as a travel destination in recent years, with many adventurers adding ‘travel Iceland’ to their bucket list.
This country isn’t cheap though, known as one of the most expensive destinations to visit. So is it worth it to travel Iceland on a budget? Absolutely!
You don’t go to Iceland to party in hostels, or to dine at restaurants. While the hospitality industry is booming thanks to an influx of tourists, the real beauty of the country sits within its natural bounties.
Iceland is jam-packed with natural adventures and wonders of the world. And while the exchange rate may have some travellers cringing, you can definitely travel Iceland on a budget.
Travelling Iceland: Getting There
With the launch of WOW Air, booking a ticket to Iceland is a lot cheaper than flying across Canada.
This budget airline often sells flight tickets for around $200 CAD with some round trip offers under $400 CAD.
WOW Air also offers free stopovers in Iceland on flights connecting Europe and North America, which is basically a free ticket to travel Iceland; why pass that up?
Booking with budget airlines usually mean a ton of restrictions including luggage size, amount of luggage, and baggage weight.
If you exceed any of these restrictions, you’ll be slammed with extra fees that can end up costing more than your original ticket.
To get the most bang for your buck, it’s best to pack smart, take only what you need, and bring a lot of music and movies for your flight. Budget airlines usually don’t include in-flight entertainment.
WOW Air will charge extra for food, water, coffee, and tea as well, but you’re welcome to bring your own prepared meals or snacks on board.
Now that WOW Air has been beating out the competition with their super-low prices, it forces other airlines to offer lower rates as well.
No matter the airline you choose, try to opt for getting an overnight fly where you’ll probably be able to catch a glimpse of the aurora borealis (“Northern Lights”) from the airplane windows. That was definitely one of the biggest highlights of our trip.
Budget Accommodations in Reykjavik
When you’re staying in Iceland, chances are, you’ll be staying in the capital city of Reykjavik.
Reykjavik sits on Iceland’s coast and is the largest city in the country with plenty of accommodation options to choose from.
Hostels vs. Airbnb
Most travellers looking to visit Iceland on a budget might be first considering staying at hostels.
We were surprised at the cost of hostels in Reykjavik, some equivalent to the price of a fancy hotel room in our hometown.
While hostels in Reykjavik are still cheaper than hotel options in the city, if you’re travelling to Iceland with a partner or more, your money (and comfort) will go further by checking Airbnb.
There are a ton more options available on Airbnb than when we visited the country a few years ago (some with their own hot tubs!), while there are many private rooms and studios that are equivalent to the price of a bed at a hostel.
Many of the private room options on Airbnb in Reykjavik are often rooms in a larger home with other rooms rented out to travellers.
Where to Stay in Reykjavik
Reykjavik may not be a big city, but if you’re short on time it’s best to plan ahead on which part of the city you’ll be staying in.
On our first visit, we lucked out with an affordable room in Reykjavik, however, it was a long walk away from the downtown core.
We didn’t mind the walk to get a glimpse of some Icelandic streets, but if you’re tired or short on time, walking or taking the bus can become a pain.
The downtown/city-centre area (101) of Reykjavik are where most of the city’s attractions are. This includes the concert hall, bars, restaurants, colourful storefronts and the famous Hallgrimskirkja Church.
It’s best to mark this area as your main point, as you’ll probably be visiting this area often. Look for places starting here and moving outwards.
Travelling Around Iceland
Getting to/from the Airport
If you’re like us, you usually forgo the easy option of spending more dollars to hop on a convenient shuttle bus from the airport.
Instead, you want to dive into the country like a local, and get from the airport to the city centre the cheapest way possible. At Reyjkavik’s main airport, it’s by way of public transportation.
Like most airports, Iceland’s main international airport sits outside of the country’s central core. An hour outside of Reykjavik in Keflavik.
This city bus (Strætó bus #55) costs a fraction of the cost of others leaving from the airport, and you can buy these tickets from the main convenience store in arrivals.
The bus makes several stops throughout town but will end up at the main bus station in Reykjavik (BSI).
Note: Not every bus from the airport on route 55 stops in Reykjavik so be sure to double check the schedule and include that in you’re itinerary.
The real mystery is where the bus picks you up. We were directed to the location of the other shuttle bus pick-ups, but just behind where those busses park, stood a lowly bus stop sign with the straeto symbol.
The cons of this option? Getting into the city often takes about twenty to thirty minutes longer, and makes more stops than shuttle busses.
Public transit doesn’t start running until around 6:30 a.m. and stops running around 1 a.m. If your flight lands during these times, you’ll have to choose another option.
Shuttle buses are much more convenient, but in Iceland, they aren’t exactly budget-friendly.
If you are arriving at inconvenient times, with a lot of luggage, or just don’t have the patience to navigate the public transit system, then this option is for you.
While a single bus ticket costs around the equivalent of $5 CAD (you may need more than one ticket to get from the airport making costs around $20 CAD), a shuttle bus ticket will skyrocket your transportation price to about $70 CAD for the round trip.
Shuttle services like FlyBus will arrange direct transportation to your accommodations though. This is a lot easier than bus hopping, especially when transfers are required on the public bus.
Renting a Car
Iceland is one of the few places I would recommend renting a car in. Whether you choose to have one reserved from the airport or in town is based on your needs. But you’ll get better pricing from car rental companies in the city.
Having your own car hire in a city like Paris, or London may be a luxury purchase (or a stressful one) but in Iceland, it’s a great way to take your trip into your hands and save some money while doing so.
Having your own wheels in Iceland will make it easy to see the sights you want at your own leisure.
Car rental companies like SAD Cars offer sweet deals on budget choices. The name may not have you expecting much, but their cars aren’t too dated and serve their purpose.
If you’re in a group you can all pitch in to map out the ultimate road trip. If you arrive solo, it won’t be hard to make a group of your own!
Prices for camper vans vary, but they are an incredibly fun way to see Iceland. Plus you’ll have a place to stay all in one!
Campervans are a popular way to travel Iceland and see the sights. You’ll see a variety on the road when you decide to head outside of the main cities.
They come equipped with beds and kitchenettes and give you the chance to wake up next to breathtaking scenery.
When booking a campervan, you’ll want to plan ahead for the best deals and availability.
Many countries around the world use hitchhiking as a way of getting around as casually as Torontonians request an Uber. Iceland is one of these countries, boasting extremely low crime rates.
We’ve met a number of people on our trips who plan on hitchhiking around, and while we haven’t tried this method yet, it’s pretty popular!
Always plan out your hitchhiking points. And if you’re tempted to try, maybe stick to the months when it isn’t freezing outside.
Eating While Travelling Iceland on the Cheap
Restaurants and Bars
While we spent some time in some hostel cafes, and bars socializing with friends, we were never tempted to look at the menu based on what we know about the prices in Iceland.
You can expect a glass of wine or beer to run you upwards of around $15 CAD. We also found it hard to find a coffee from a cafe under $5 CAD.
Based on that alone, we decided to avoid dining out altogether. And we still appreciate the pint of beer our friends bought us after our road trip.
If you’re dying to try something, Icelandic hot dogs are all the rage.
Now that you know just how much dining out costs, grocery stores will be your saving grace while in Iceland.
There are a number of grocery stores including discount options scattered throughout the city. They are perfect for stocking up your hotel, Airbnb, or camper with all the essentials you need throughout your stay.
We found sticking to a “college diet” to be the most bang for your buck. You know, the diets that consist of cheap spaghetti and sauce, oatmeal, sandwiches etc. This is also your chance to try interesting finds you see at the grocery store!
Do you have any tips on how to travel Iceland on the cheap?