5 tips for saving money when travelling Iceland

We all know Iceland is an expensive place but there are ways you can save money. It’s never going to be a true “backpacking on a shoestring” destination but here are my five top tips for travelling Iceland on a (smaller) budget.

Take the bus

A selection of tour buses waiting outside Keflavik Airport to transport passengers into Reykjavik.

One habit of other travellers that just blows my mind is how often they use Uber/taxis instead of public transport. Get the airport bus into the city! It takes an hour and that’s a lot of money for your own private driver. If you really want to avoid sitting next to a stranger, get the Airport Direct (Grayline) bus. It only goes once an hour whereas Reykjavik Excursions’ FlyBus goes as soon as it’s crammed someone into every seat. Ergo, everyone gets on that one and the Airport Direct goes at least half-empty.

To really save, you can take the Stræto bus, which is the ordinary yellow city bus. No 55 departs from near the Departures doors (out of Arrivals and turn left), takes just over an hour to BSI and costs 1,960kr (~ £11.34/$14.39 as at 01/07/23) which saves you enough for that taxi the last mile to the door of your accommodation if you want.

You can also use Stræto buses to get around Reykjavik – I even have a handy guide to doing so right here.

Getting the bus around Iceland, sadly, isn’t as easy as it once was. RE used to have a network of long-distance services and a rainbow of “bus passports” depending on what combination of routes you wanted to use but that’s long gone. Stræto’s rural bus network can join up the entire country but it’s not designed for that, so you’ll find inconvenient changes – buses only running twice a week or not running in sync with the “feeder” service. You may be able to make a workable itinerary with a mix of the hiking buses down south and the SBA-Norðurleið routes up north.

Consider camping

I started camping (strictly summer only!) in Iceland because hotels and guesthouses get expensive, especially if you’re set on being spontaneous and turning up in the evening asking if there’s any room at the inn – which there often isn’t at such short notice. My one-man tent, which fits in a duffle bag that I can check in for my flight without incurring extra costs, was about £120 a decade ago and has paid for itself many times over.

The corner of my little yellow tent with a background of lush grass and low basalt cliffs. Tucked under the corner of the tent are my boots, an enamel mug and an Iceland guidebook.

It’s definitely cheaper than hiring a campervan, too. Car + tent fees are cheaper than the van alone. I can put my tent up in under five minutes so it’s barely any less convenient. Ok, it’s tiny and it’s strictly a place to sleep, not to hang out and kill time but I spend my evenings at the pool and only come home at bedtime anyway.

Use the local pools

I know you’ve heard a lot about the geothermal spas, including from me. They are fantastic and I do still recommend them but if you want geothermal water, hot tubs and a blue sky above you, almost every settlement has an open-air geothermal pool. Outside Reykjavik these are likely to be relatively quiet too, which means serenity in the water and a good chance of surviving the Obligatory Naked Shower unobserved. They tend to cost around 1,100kr (£6.36 / $8.07) and usually include at least a pool and a hot tub, often two or more hot tubs and a play pool. Definitely worth checking out.

The public pool at Hveragerði, a slither of bright blue on the side of a green hill with a mountain above it.

Shop in supermarkets

I shouldn’t even have to say this but I had a boss once who, on hearing I didn’t go to a restaurant for every single meal on holiday, asked in genuine bewilderment, “Well, where do you eat, then?”. Just like at home, I go to the supermarket. I admit, I tend to live on cereal, sandwiches and picnic food, except the occasional bag of pasta if I have cooking facilities, but food is food. Don’t take that to mean you have to self-cater always but it’ll definitely bring your food-related expenses down if you can make a picnic lunch.

Iceland supermarket in the outskirts of Reykjavik, as seen from an airport bus passing by.

Keep the alcohol for special occasions, maybe?

I know, I’m suggesting an English-speaking audience drink less. Look, alcohol is the single most expensive item on a tourist’s budget. That’s because it is expensive. Outside of bars & restaurants, you can only buy it from state-operated vinboðin, alcohol shops that are open for more restricted hours the further you go into the wilds. By and large, they’ll open for normal shopping hours in Reykjavik but in that village in the middle of nowhere, you might find it’s only open for one hour on Tuesday afternoons. Reducing your alcohol spending will make a huge difference to your budget.

A glass of full-fat Coke in a patterned glass on a table in a bar in Reykjavik.