The Secrets Of A Cheap Iceland Holiday: A Budget Traveler’s Guide

Did you know you can book a cheap Iceland holiday by simply better planning your trip? Yes, it’s true.

Visiting Iceland doesn’t have to break the bank. While it’s often considered an expensive destination, there are numerous ways to experience the country on a budget. 

In this guide, I will give you some of the best tips to keep your budget down to a minimum while visiting Iceland. 

Travel to Iceland off-season

One approach is to go during the off-season, typically from October to April, when airfares and accommodation prices drop. 

The Northern Lights are also visible during these months, offering an added bonus for your trip.

Don’t book Northern Lights tours

For a budget trip to Iceland, I wouldn’t recommend chasing the Northern Lights because they will most likely be visible from anywhere if the sky is clear (no clouds). 

I would only recommend booking a tour if you’re on a super tight schedule and want to make sure you see the Northern lights. 

Use budget airlines to get to Iceland

Budget airlines often fly to Iceland, so keep an eye out for deals and offers. 

I always check Kiwi.com for the best flight combos that will take me to my destination. 

This is a powerful flight search engine that automatically connects your flights, even if they are with low-cost carriers. The only important thing is that when flying, treat each flight as an individual flight. 

I was flying from Bucharest (Romania) with WizzAir to London and then with EasyJet to Reykjavik. How else was I supposed to find this combo? Check the price in my trip to Iceland cost breakdown post to see how cheap the flights were. 

Use public transport or share a ride

Once you land, consider using public transportation or sharing a rental car with fellow travellers to cut down costs. Check out this guide on how to get around Iceland without a car to get you started. 

Getting around Reykjavik will not be difficult because it’s a small city. If you are staying fairly close to the centre, you can walk everywhere. 

But if you want to do a longer road trip across Iceland, then your best bet to make this one of the cheapest Iceland holidays ever is to convince 3 more friends to join you. 

Splitting the costs for the car rental, gas, parking, and food with 3 others will make a massive difference in your Iceland trip budget. 

Sleep at camping grounds

If you’re open to a more rustic experience, camping is an economical lodging option during the warmer months.

The most popular way to do a road trip around Iceland is to rent a campervan (check RentalCars or Northbound) and sleep in the car. Most campervans are small cars converted to fit a double bed in the back. But you can also rent bigger RVs to fit more people. 

However, for a cheap Iceland holiday, you will need to rent a normal car and a tent (in case you can’t bring your own) and sleep in a tent at a campsite. This is mostly a summer activity. 

There are plenty of campsites in Iceland, and there are some open all year round. 

While wild camping used to be a thing in Iceland, it’s not legal anymore. So don’t camp anywhere in the wild because you will get fined. 

Choose the free activities

For activities, explore Iceland’s stunning natural beauty, which is usually free. 

You can hike to waterfalls, visit volcanic landscapes, and take dips in some less-famous hot springs without spending a dime. Check out the most popular hiking trails in Iceland (all free). 

My personal opinion is that some places get really hyped up by social media influencers, and then local tourism agencies start to offer more tours in the area. 

This can lead to paid parking and even entrance fees. This is not a typical thing, but it happens. And it’s valid for attractions from all over the world, not just Iceland. 

For instance, there is an entrance fee for visiting the Kerid crater, which is near the Golden Circle. You either visit it during the night (if visiting during summer, because there will still be light outside) or skip it and check out other free craters because there are plenty. 

Luckily, most activities, natural wonders and visiting spots are free in Iceland. 

But some spots have paid parking, such as the Seljalandsfoss or the Jökulsárlón Glacier Lagoon (the parking fee covers both the glacier lagoon and Diamond Beach, which is on the other side). 

Visit public swimming pools and skip the spas

You can save money on your Iceland holiday by skipping some of the most popular tourist attractions and going for the less promoted alternatives. 

For instance, instead of visiting the Blue Lagoon, visit the Mythvan Nature Baths, which is one-third of the price and looks almost the same. This is a good idea if you’re doing the Ring Road itinerary because Mythvan baths are in North Iceland, about 2 hours from Akureyri. 

If you wanna save more of your budget, then you can skip all tourist spas (Blue Lagoon, Sky Lagoon, Secret Lagoon, etc.) and simply choose to visit the public swimming pools.

You will find a super modern public swimming pool in every small town in Iceland. There are at least 20 public swimming pools in Reykjavík.

Locals love the swimming pools, and they’re all equipped with hot tubs of different temperatures so are suitable for children, families and adults. They all have a wet sauna, and they only cost a fraction of the price of the popular tourist spas.

During my 5-weeks in Iceland, because I had an apartment in Reykjavik, I got a 20-entries pass at Vesturbæjarlaug. It was about 75 EUR, and I could use it with my boyfriend. So we got 10 entries each, at a price of 3.75 EUR, which is about 20 times cheaper than one entrance at the Blue Lagoon. 

Book hotels as much in advance as possible

If you’re not willing to sleep in the car, then book your hotels in Iceland as soon as you start designing your itinerary. 

The best and cheapest hotels go out fast since there are not that many, and are usually booked up to six months in advance. 

The more unique a hotel is and affordable, the more demand there is. Some cool hotels in Iceland need to be booked up to a year in advance. 

I always use Booking.com. You can easily see that the hotels with the best locations and ratings have already booked for next year. 

Make your own food

Food is also pricey in Iceland. But there are plenty of supermarkets everywhere you go, and you can get everything you need to cook some food or prepare some lunch boxes for the next day. 

In Iceland, all camping sites and even budget hotels offer a shared kitchen equipped with everything you need to make your own food.

Restaurants are not even that tempting in Iceland, and you’re not there to explore the cuisine. I mean, you can do that too, but I’m sure you’re there for the landscape. 

Bring a water bottle

And then fill it with tap water. It’s the best water you’ll ever drink, and it comes for free at any tap in Iceland. 

I’ve seen tourists paying for overpriced water bottles in souvenir shops, and I simply can’t understand why. 

I’m extremely picky and sensitive with the water I drink ( I used to boil my water when I was growing up). But tap water in Iceland is just so good. And I’m living proof that it’s safe to drink – after 5 weeks in Iceland, nothing bad happened to me from drinking the tap water. 

Check last-minute Iceland vacation packages

I’m not the one to advise you to book your holiday through a travel agency, and I truly believe that self-planning is the best way to go. 

But, in some cases, especially with more expensive destinations, such as Iceland, travel agencies might be able to offer some last-minute deals that are actually not a bad deal. 

For whatever reason, travel agencies can offer discounts on some services, such as hotels and flights. If they need to sell more spots, they will likely make a discount 1-2 weeks before the start of the holiday. 

This might not always be the case, but it’s always worth checking. You can always check Expedia for your location and flights. Maybe there’s some discount. You never know, but it’s always a good idea to check and see how you can get a cheaper Iceland holiday. 

Get travel insurance

I don’t want to spoil your enthusiasm, but there’s nothing more that can ruin your trip and increase your spending as an unforeseen health or travel issue. 

It is absolutely necessary to get travel insurance for Iceland because you don’t want to end up paying more than you have in your bank account. 

Do know that health emergencies are treated for free in Iceland, so don’t be afraid to call the emergency number (112) if needed. But other costs, such as new plane tickets or extra nights in Iceland, might dig a hole in your planned budget for a cheap Iceland holiday. 

And this is where travel insurance comes in place. Don’t leave home without it! 

One cheap Iceland holiday coming up next!

You can definitely find options to book a cheap Iceland holiday, but it will require more planning on your part. Understanding what to see and staying away from the major tourist exhibitions and attractions will save you a ton. 

The thing is that the best things in Iceland are free, but local agencies are trying to make some money, too. 

That’s why they will always try to come up with new experiences meant to mesmerise you and make you spend more money. 

If you need more help planning a cheap Iceland holiday, I have a bunch of Iceland travel tips to help you plan your Iceland trip. 

But by planning ahead and prioritising your must-see attractions, you can easily enjoy a fulfilling trip to Iceland without emptying your wallet.