Travel Iceland on a Budget
Iceland is an expensive country, that’s a fact BUT there are budget friendly ways to go about visiting. Let me guide you through...
Considering a budget holiday to Iceland? Find out all there is to know about backpacking in Iceland, from money-saving to staying safe tips. Read now.
Adventurers of every kind feel right at home on this small island. Whether your pack is full of photography equipment, wildlife books, or crampons and ice axes, discover the perfect way to explore for you.
In Iceland, visitors will find themselves surrounded by rugged wilderness and vivid landscapes. So the best way to make sure you see everything you want to see is to get out there yourself, with nothing but you and a backpack.
Outside of Reykjavik, Iceland is a sprawling country connected by winding roads. Incredible waterfalls, black sand beaches, glaciers, and countless other volcanic footprints await you out there. As a result, backpacking is no mean feat. With our complete guide for backpackers, you’ll know exactly where, when and how to get started.
When you choose to visit is completely dependent on your individual preferences. More adventurous visitors will love the possibilities summer brings, while budget travelers might opt for winter or autumn to avoid the crowds.
First of all, it’s vital to note that there are never guarantees with Iceland’s weather. What goes on in the atmosphere is famously unpredictable, and sunny spells are rare. In fact, when there are a few days of consecutive sun, the country just about shuts down as locals rush to their holiday cabins to soak up these rare rays.
Summer is, of course, the easiest time to travel around and explore Iceland to its full extent. While you won’t exactly be sunbathing, the midnight sun in the summer months allows almost 24 hours of sunlight for adventurous spirits to find everything they’re looking for in a backpacking trip. If you're trying to sleep in a tent in Iceland’s summer, the constant light in the sky might challenge lighter sleepers. Whale watching, bird watching, and many other wildlife activities are only possible in summer, and you’ll also get to witness lupines bloom across the country’s landscapes.
However, if you’re after a more dramatic, snow-covered landscape, winter is also a great time to backpack around Iceland. If you simply cannot leave without witnessing the northern lights, the darker skies of winter are definitely your friend. During this time, there are fewer daylight hours, and some roads - particularly in the highlands - become impassable due to poor weather conditions.
Due to the better weather conditions and, of course, summer holidays, most tourists visit in summer. For this reason, you’ll find that ticket prices and even hotel rates might rise during the peak months. If you’re searching for a budget backpackers holiday, avoiding summer is a good bet.
September is a great month for saving while getting all the benefits of Iceland - whale watching is still fruitful while the skies are beginning to darken, allowing the opportunity to spot the northern lights on your trip too! Plus, your photos will look a lot better without the crowds.
A great way to meet people and immerse yourself a little more in Iceland’s distinct culture is to attend one of its annual festivals. Reykjavik is the main host for most festivals, with plenty of individual venues taking part in each celebration. Whether you’re looking for something connected to Iceland’s Viking past or to step into the international music scene, look out for the following festivals.
There’s no way around it - Iceland might be on the more expensive side of your travel destinations. Reykjavik has a range of accommodation options, with hotels and hostels available for budget travelers not after the heights of comfort. Opt for accommodation further from the city center for slightly lower rates, and it’s always best to book your rooms as far in advance as you can.
Your accommodation options are more limited once you set foot out of the capital. Small towns and hamlets might have hotels or B&Bs available, but make sure you plan ahead to avoid getting stuck - particularly in poor weather. If you choose to go for more rural methods, such as camping, it's imperative to leave everything as you found it. To minimize the impact of tourists on the environment, it's important that all visitors respect Iceland's beautiful landscapes and natural habitats.
For those with the right equipment, camping in Iceland can be a more affordable option for accommodation, especially when seeking adventures outside of the larger cities. It’s always best to head to designated camping grounds to ensure you aren’t trespassing on someone’s land. For campervans and caravans, this is imperative. Leaving no trace is always the policy.
For tent camping, you can also consider wild camping if your plans are more spontaneous, though it’s important to check that you have permission if required. This will depend on if you’re camping on farmland or near a farm, which might be the case without you even realizing it. Some farmers will allow you to use a small patch of land for the night, but be aware some may ask for a small fee.
Another flexible and more spontaneous accommodation is your vehicle. Should you have rented a car to travel around the country, an excellent way to see everything at your own pace, you can always park up or head to a nearby campsite as the sun sets.
Finding your way around Reykjavik is relatively easy, even without a car of your own. Public transport in the form of buses can get you to most places you’ll need to go around the city. If you’re really stuck, there are taxis, but these can get pretty expensive for a budget holiday. For distances too far for tired legs, why not hop on one of Reykjavik’s electric scooters?
As already stated, the majority of Iceland is pretty sparsely populated. Around 65% of the country’s population resides in or near Reykjavik, with the rest scattered among small towns and farms, or in the town of Akureyri to the north. It’s exactly for this reason that public transport into the wilderness is almost non-existent. For most roads, especially in winter, you’ll need 4 wheels.
Many visitors choose to rent a car from the countless providers of hire cars in and around Reykjavik, or at the airport. Your own rental car can work out as the cheapest way to get around while hitting all the spots you’re eager to see. Acting as storage, a bed, and a form of transport, a rental car is not to be sniffed at - plus, your car hire company might provide you with additional advice for getting to where you need to go, including advice for weather conditions should you need it.
For modest budgets, renting your own car may be out of the question. From Reykjavik, hitchhiking is a relatively easy task, and you’re likely to be picked up pretty quickly if on a road out of the city. While Iceland is a pretty safe county, even for lone backpackers, care should always be taken in these situations. Make sure someone in the country or at home knows where you are going at all times.
While most natural attractions are free to visit, such as waterfalls and geysers out in Iceland’s wilderness, the country is not known to be a budget destination. Here are our top tips for saving money while exploring to your heart’s content.
Our last piece of advice is to talk to locals where you can. They will know the best places to eat, stay, or camp wherever you are - particularly on a budget. Most Icelanders will speak pretty good English and are usually happy to help polite travelers across the country - so long as you respect their country.