How to have a budget break in Iceland

‘Iceland is too expensive to visit if you’re on a budget’. Along with ‘don’t eat the street food – it will make you ill’, this is one of the great travel myths. And it could lead you to miss out on some amazing experiences.

True, Iceland can be eye-wateringly pricey, but with some planning it is possible to visit the land of fire and ice without spending a fortune. Here’s how to make it happen.

Sights

In Iceland, horizons are dotted with volcanic peaks, gushing waterfalls spring from every crevice and valleys are carved in front of your eyes by vast glaciers. This spectacular scenery is currently free to explore. A fee of some description may be introduced in 2015 or 2016, with one suggestion requiring visitors to purchase a Nature Pass. But even if the proposals go ahead, compared to the national park fees in some countries (the Nature Pass would cover the whole country and cost around Ikr1500 – US$11 or €10 – for a month), Iceland's wonderful natural landscape is still a bargain.

Many of the sights are easily accessed from the Ring Road, which circles Iceland. Along the south coast, showstoppers include incredible waterfalls such as Seljalandsfoss, where you can walk behind the falls, and Skógafoss, where rainbows arc through the spray in sunshine. Other attractions include the dramatic black beach at Vík, the massive Vatnajökull ice cap and the Jökulsárlón lagoon, where blue icebergs journey out to sea.

The most popular day trip from the capital, Reykjavík, is to the Golden Circle.  It's home to the magnificent Gullfoss waterfall, Geysir, the geyser after which all others are named, and Þingvellir, the site of the world’s first parliament.

Reykjavík itself is an enjoyable city to explore, and some attractions are free to enter, including the must-see Hallgrímskirkja church (there is a charge of Ikr700 to go to the top for views across the city and its rooftops). The iconic Harpa building, the city’s cultural hub, is worth a visit even if you’re not shelling out for a performance. City Walk Reykjavik (http://citywalk.is/), meanwhile, is a free guided tour that has gained a great reputation and relies solely on donations.

Activities

From relaxing in the famous Blue Lagoon to high-octane experiences such as snowmobiling, glacier hiking and descending into a volcano, Iceland offers incredible activities. Some can be undertaken independently, although you should prepare carefully as Iceland’s natural environment is both wild and fragile. Tour companies offer a spectrum of activities, some taking in the sights mentioned above, but trips don’t come cheap, so pick one or two which you really want to try and focus on finding the best experience for your money.

If you want to go whale watching, for example, you should do some research into the best locations around the country and compare tour prices. But it’s also worth checking the conditions and optimum times for spotting whales – if it’s not a good time of year to view them you may want to save your pennies and opt for a different activity.

Also consider alternatives. Glacier hiking trips at the likes of Skaftafell in the southeast of the country may well be out of your budget, but walking along the edge of the valley gives fantastic views of the glacier without the cost. Likewise, while the Blue Lagoon (Ikr6600 for a ticket in high season) isn't budget-friendly, you can experience geothermal water in one of the less famous hot pots around the country for a fraction of the price.

Transport

You can get around Iceland by car or bus, with a tour company or via internal flights. In summer, as long as you’re careful to stay off mountain roads, a 2WD hire car can open up much of the country. Roads are easy to navigate and blissfully traffic free. With prices starting at Ikr16,000 a day in high season, having your own wheels doesn’t come cheap, so price up the alternatives.

To save money on travel:

• Avoid airport taxis. Keflavík International Airport is 50km from Reykjavík. If you’re not hiring a car opt for the Flybus, which offers a regular service for Ikr1950.
• In high season, book your hire car well in advance or you may find the cheaper vehicles are all taken. Better yet, travel outside of high season for discounted rates.
• Compare tour prices for the area you’re looking to explore with the cost of hiring a car for the day. If you have a few friends with you, a car could be the most affordable option for taking in a route such as the Golden Circle, as well as giving you the freedom to explore the area at your own pace.
• Take the bus. Bus operators are providing an increasing variety of hop-on/hop-off passes. Sterna Travel (sternatravel.com) and Reykjavik Excursions (re.is) both offer ‘bus passports’, with routes including a loop of the island. Again, compare with the cost of hiring a car, which could work out cheaper than the bus if you are travelling with two or more people.
• Hitching is never entirely safe, and we don’t recommend it, but hitch-hikers are a fairly common sight in Iceland. You will need plenty of patience and weatherproof clothes.

 Accommodation

Even basic accommodation in Iceland isn’t cheap. With tourism growing rapidly, demand can exceed supply and finding a good-value room can be tricky.

• Travel in shoulder season. Iceland’s peak season is from June to August, and in May or September you’ll find accommodation significantly cheaper.
• Book early, particularly in peak season. In some popular parts of the country, such as the route between Vík and Jökulsárlón, accommodation options are extremely limited.
• Bring a sleeping bag. Some hostels and guesthouses offer beds without a duvet or blanket for bargain prices. This needn’t mean staying in a dorm: you can get the stripped back cost on double and single rooms too.
• During the summer holidays some schools and colleges become hotels, offering no-frills rooms at a reasonable price. The Hotel Edda (hoteledda.is) chain includes schools across the country and offers double rooms from around Ikr13,000.
• Join Hostelling International (hostel.is) before your trip to get a discount on most hostel stays.
• Camping is not only the cheapest option, but also offers the opportunity to wake up in some of the country’s most incredible locations such as in the shadow of Skógafoss falls.

Food and drink

Much of Iceland’s food and drink is imported and can eat away at your money but there are some simple ways to reduce costs:

• Look for accommodation which includes breakfast, as many guesthouses and hotels charge around Ikr1500–2000 extra for the meal.
• In supermarkets and restaurants opt for locally sourced food, such as fish and dairy products.
• Drink tap water! Iceland has some of the purest water of any country on earth.
• Buy alcohol at the airport, where it’s tax- and duty-free, making it significantly cheaper than in shops and bars.
• Keep your eyes peeled for happy hours in Reykjavík.

Getting there

Book your flights to Keflavík International Airport well ahead of travelling, flying where possible outside of the summer high season. Avoid weekends and keep your eyes peeled for offers from budget airlines. If you’re travelling between North America and Europe, opt for a flight which allows a few days stopover in Iceland at no extra cost.