4 Ways to Save in Iceland

by  Mollie Pendexter | May 4, 2017
Kirkjufell, Iceland
Kirkjufell, Iceland / iStock

Iceland became a tourism powerhouse for lots of reasons -- its natural beauty and proximity to the East Coast of the U.S. are just the beginning -- but it also has the reputation of being one of the cheapest countries to visit if you do it right. Here are some tips on how you can enjoy the ultimate budget getaway.

Visit Off Season -- and Choose a Budget Carrier

The time of year you chose to visit Iceland will largely determine the cost of your flights; and yes, this means it’s cheaper when it’s colder -- and, importantly, when there’s less daylight. Remember, during the winter months, Iceland’s days can be as short as five hours, something that will impact your sightseeing. Of course, winter is also the best time for viewing the Northern Lights in Iceland. You’ll need to consider these factors when you book your trip.

Iceland-based budget airline WOW air flies between many major U.S. cities and Reykjavik. You can often snag a round-trip flight for less than $300, but keep in mind that you’ll need to pay for extras like assigned seats ($10), and checked luggage ($40 in advance; $99 at the airport). For comparable or slightly higher pricing check out Icelandair, which also offers a free checked bag. Travel late February to early March for the lowest prices.

Try a Vacation Rental

You’ll find that hotel rates drop in the same pattern as flights – in the winter. But vacation rental sites like Airbnb, HomeAway, Flipkey, and others can be a great way to save in Iceland. Rentals here tend to be spacious, spotless, and attractive. (Iceland is a design capital, remember.) In Reykjavik, you can stay in many apartments for significantly less than $200 per night, and the savings for big groups staying together are significant. Here are some of our favorites:

A vacation rental also gives you the opportunity to cook some of your meals. While Reykjavik is known for its up and coming culinary scene, the food in Iceland tends to be very expensive -- think $17 for a gas station sandwich. Stock up on Icelandic yogurt (kefir) as well as other breakfast and lunch essentials at the local grocery store – look for the ubiquitous pig on the sign -- and save dining out for dinner.

Combine DIY Sightseeing With Guided Tours

Iceland lacks a major public transportation system, which means you can DIY a portion of your sightseeing by renting a car. A slew of companies like Enterprise, Avis, and Hertz rent everything from compact, 2-door cars to 4-door trucks that you can pick up right at the airport or in downtown Reykjavik. Rates range from around $42 to $75 per day and insurance is required.

You’ll want to plan your schedule wisely, though, as you may not need a rental car for your entire trip. For the days you’ll be in and around Reykjavik, we suggest forgoing a rental car and taking tours instead. A Reykjavik walking tour is a great way to see the city. The city is compact and easily walkable, and many of these tours are free and led by locals. (Just don’t forget to tip! We suggest $10-$15.) On a recent trip, we enjoyed well-reviewed Citywalk for its informative guides.

If you’re traveling to Iceland for the first time, a Golden Circle tour, which leaves from Reykjavik and takes a full day, is a must. At around $135, this tour may seem expensive, but it’s worth it. It’ll also save you a day of car rental. The tour consists of Pingvellir National Park, the Gullfoss Waterfall, the Geysir Hot Springs, Haukadalur Geothermal area, and the Secret Lagoon. We especially like that this tour includes the Secret Lagoon. Iceland’s famous Blue Lagoon (which costs around $50 for basic entry) has been turning away guests due to overcrowding, so we suggest skipping it and enjoying this alternative.

And Finally... BYOWB

Bring your own water bottle! A bottle of water in Iceland costs about $4. This can get expensive. The good news? Iceland has some of the cleanest drinking water in the world, so if it comes from a faucet, it’s drinkable.

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