7 Hacks to Keep From Going Broke on a Trip to Iceland

It’s never been cheaper to fly to Iceland thanks largely to budget carrier WOW Air, which offers one-way fares to Reykjavik for under $100 from an ever-expanding roster of U.S. cities. Sadly, while it may be inexpensive to get to Iceland, it’s not nearly as cheap to explore and stay in Iceland. Fortunately, we’ve got the seven hacks you need to know to enjoy Iceland without going broke. 

1. Bring a refillable water bottle.

It’s good advice to bring a reusable water bottle regardless of where you’re traveling, but it’s particularly good advice if you’re headed to Iceland where bottled water can run $4 a pop. Ouch. Iceland has some of the cleanest water in the world (hello, glaciers). Fill up at the tap in your hotel or in a stream on a hike. Best of all, refilling your own water bottle is completely free.  

2. Book a stay in a guesthouse.

There are hotels, there’s Airbnb, and then there are guesthouses, which are small, family-owned accommodations, similar to B&Bs in the U.S. Situated in more remote areas, guesthouses are less costly and attractive to visitors driving the Ring Road or exploring less-frequented glaciers and volcanoes. Book “sleeping bag accommodations,” which do not include bed linens or towels, to save up to $10 each night of your stay.  

Many guesthouses have shared kitchens, so make a stop at the Bonus supermarket before you leave Reykjavik. Bonus is known to have the best prices and selection in Iceland. It will be harder to find a large selection of affordable grocery items for making your own meals once you leave Reykjavik, so stock up if you can, especially on non-perishable items.

3. Rent a car – with Wi-Fi.

There are a number of ways to save on a rental car, and if you plan to explore outside of Reykjavik, you will want to book one. Start by renting a car with manual transmission. If you can’t drive a stick shift, at the very least opt for diesel fuel, which will cost less and get more miles to the gallon (er, liter). Tamara Gruber of We3Travel suggests skipping a pricey GPS unit and opting for a pocket Wi-Fi device that can be rented in advance from a company like Tep Wireless. 

4. Become one with nature.

Unlike in the United States where many of the most popular national parks charge entrance fees, there is no fee to enjoy the national parks in Iceland. There are three national parks in Iceland – Thingvellir, Snaefellsjokull and Vatnajokull – boasting glaciers, volcanoes, waterfalls and active geothermal areas, even glacial lagoons and icebergs. Closer to Reykjavik, enjoy a seaside walk along the coast at Grotta or climb to the top of Mount Esja for panoramic views. 

5. Choose tours wisely.

There are loads of guided tours available in Iceland, and depending on what you want to do, you may need to sign up for one of the (sometimes) expensive tours, like if you want to walk on glaciers or go dog sledding with huskies. However, if you want to drive along the Golden Circle (a day trip) or the Ring Road (a week-long trip), you can easily do it yourself. Jeannie Riley of the travel blog, Life With a View, has created a Ring Road Self-Drive Guidebook with helpful tips, planning ideas and useful itineraries. 

6. Book way in advance. 

Just because you can find a last-minute airfare at a deep-discount price doesn’t mean you’ll have the same good fortune when booking a hotel, rental car or guided excursions, like whale watching tours. The closer you are to your travel dates, the more expensive everything will be. At the very least, do some quick research into prices and availability of accommodations and activities on-the-ground before scooping up your plane ticket. Everyone wants to go to Iceland these days and in many cases prices have inflated to meet this high demand. 

7. Don’t drink it up. 

Alcoholic beverages are very expensive in Iceland thanks to the highest alcohol tax in Europe (more than 80 percent of the purchase price). It’s so expensive that even the locals shop at duty-free shops, so if you want to enjoy a lager or a mixed drink in Iceland, stock up at the airport. A pint at a bar in downtown Reykjavik can cost $11. Ouch. Outside the airport, you won’t find alcoholic beverages at the supermarket like you can in many U.S. states. Instead, you’ll need to go to a state-owned liquor store called Vinbudin.