Iceland is not a cheap country to visit, but just like anything else in life it is about setting your priorities. If you want to travel Iceland for longer than 4-5 days and you are on a budget, I’d suggest stack ranking the things you want to do or places you want to visit. Like most tourist destinations, once you are in country you will be overrun with tour offers and expensive travel packages. You’ll find a lot of blogs online that will demystify travel from place to place and provide lower cost accommodations. In our case, we didn’t care about doing excursions such as whale watching, glacier walks or helicopter rides; although I’m sure these things are fantastic. We wanted to focus our trip on hiking as much as humanely possible given the allure of the wild, volcanic and raw landscape of Iceland. We’d also purchased a lightweight tent, so we were anxious to try our hand at multi-day camping. We generally do day hikes while traveling and/or we look for treks with huts along the route, so the multi-day backpacking in Iceland was quite the experience.
To give you an idea how our expenses broke out, below is a 15 day expense report. The first week we backpacked in the highlands area and the second week, we took a bus back to Reykjavik, rented a car and then, drove around the island. As you can tell, we stuck to a relatively cheap backpacker budget of $56 a day/person (not including airfare). We barely spent any money on lodging for 2 weeks as we camped most of the time (camped 13 out of the 15 days. In some cases, we did free wild camping). Most of our money was spent on transportation – airfare, car rental for 7 days and bus (that shuttled us from the airport and to the trailheads). Our food budget was low as we cooked most of our meals on a camping stove. I am sure there are experienced backpackers/hikers who can do the same trip even cheaper by doing couch surfing and hitch-hiking. Renting a car gave us the option of escaping the rain and loading up on food and drinks.
Here are some tips to travel Iceland cheaply:
1. Camp : Iceland is designed for campers and hikers. The entire country is dotted with campsites. In places where there are no campsites, people tend to do wild camping (make sure there are no signs posted to the contrary. Please read the latest rules on wild camping here). The campsites are fairly cheap and cost between $10-$15 per person/day. Most of the campsites have toilets and and some have shared kitchen facilities. The Reykjavik hostel also has a huge campground with laundry and storage facilities. Some campsites have showers and you enter coins to operate the shower (hot water) for 1-3 minutes depending upon the campsite. Learning how to get all the grime off of you in 1 minute while freezing your a$$ is a skill you learn pretty quickly! Find a Campsite in Iceland
2. Food: We packed a lot of freeze dried food with us as we were hiking straight for 6 days and didn’t have access to any shops. You can buy freeze dried food from REI or other outdoor stores. We ordered a 2lb container of freeze dried veggies and made our own zip lock bags filled with these veggies, couscous/par cooked brown rice and various spice blends. For breakfast, we packed zip lock bags with oatmeal and various nuts and tea bags/coffee. This was not only cheaper than buying REI hiking food but the zip lock bags took a lot less space in our backpacks. During the second week when we had a rental car, we stocked up on food from grocery stores or grabbed a sandwich/hotdog from their fancy gas stations. I loved Skyr, icelandic yogurt which tastes less like yogurt and more like ice-cream! I totally recommend it for all 3-meals 🙂
3. Drink: You don’t need to buy any bottled water in Iceland. Even when we were hiking, we were able to find campsites along the way where we could fill our water bottle. Remember to bring your water bottle! In regards to alcohol, I highly recommend stocking up from the duty free shop at the airport. The liquor stores in Iceland are about 30% more expensive than the airport liquor store depending upon what you are buying.
4. Camping Fuel: We bought a 16 oz propane canister from a gas station (N1) near Rekyjavik campsite thinking that we will need all that fuel for 2 weeks. We realized later that the campsite had a lot of half empty canisters left behind by people (since you can’t carry them in the plane). I would recommend stocking up at the campsite, if you need to, instead of buying too much fuel from the store.
- FlyBus from KEF airport to Reykjavik Hostel – $18/person
- Store extra stuff in the hostel lockers – $26/week
- Gas Companies: Orkan, AO, OB (cheap), Olis, Shell, N-1 (expensive)
- Grocery Stores (Most expensive to least expensive): 10-11, Hagkaup, Nettó, Kronan, Bonus
- If you don’t want to pay for Blue Lagoon and avoid crowds, you can easily find cheaper or in some cases, free hot springs. We hiked (about 3km) to Reykjadalur hot spring by the recommendation of our AirBnB host.
- Hiking is the best and free activity (not including the cost of getting to trailheads!) in Iceland. If you are in good shape and love hiking, you can easily explore the beautiful and off the beaten path trails devoid of any tourists. Most of the traditional tourists tend to stay on Ring Road or the Golden circle. We avoided most of the touristy things and still felt that we got what we wanted out of our trip.
- Check out our Top 18 camping and driving tips for Iceland
- Best day hike in Iceland
- Best photos from our Iceland trip