Iceland, a small country in the middle of the North Atlantic has become famous for its unique landscape and natural beauty. Tourists that visit always go home with a special appreciation for the exotic experience that they get in Iceland. However, most tourists will realize too that it is a bad idea to go to Iceland without a proper plan for the trip. It has been reported that every tourist that comes to Iceland spends at least 10,000 USD for the whole trip. For the budget traveler, I have an insider´s guide to traveling cheap and smart in Iceland.
Why is Iceland so expensive?
Iceland is an island in the middle of the ocean. It does not have plenty of manufacturing industries. Most products are imported and for this reason, consumer goods are expensive. The costs for the shipping, customs duties and etc. adds up to the final retail price of a product. You may also find out that there isn´t a great selection of items at the grocery stores in Iceland.
The country has a small population of about 330,000. Taxes are very high in this country, for example VAT and income taxes. Service costs are therefore also really expensive.
Some things are cheap though, like electricity and water (thanks to the many geothermal activities all over the country). The cold water that comes out of the tap is free and as clean as water could get.
How to travel cheap in Iceland? (For summertime travel)
Major traveling expenses: Transportation and Accommodation
1. Rent a Car - A car is an essential part of your travel in Iceland. The bus from the airport goes straight to Reykjavik or to the Blue Lagoon. These buses operate more frequent times in the summer than in the winter. You have to plan this part well because in the winter time, the last bus from Reykjavik to the KEF Airport can be as early as 16:00 or 14:00!
Check out Wheels and Tours for a great deal in cars. Most car rental companies jack up their price in the summertime. (Law of Supply and Demand) However, Wheels and Tours remains to offer reasonable rates and have rates that are cheaper than other car rental companies.
2. Traveling by bus - Traveling by bus is not something I would recommend especially if there is 2 or more of you. I guess it is because not a lot of people use buses (population 330,000) that the bus fares are so high. Except for schoolkids, most, if not all, people living in Iceland has his own car. It is a necessity. Because of the cold, people don´t want to be waiting for the bus.
If you really want to travel by bus, you can find some information online about it but I would really discourage this idea. If you miss the bus for example...there might not be another one that would come by for an hour or so especially out there in the countryside.
3. Taxis - Never ever get on a taxi. I have only gotten in a taxi twice because my car´s battery got drained while in the garage (because I left the doors open) and the other time when I had to pick up my husband´s car at another spot. I paid about 30$ for a 7km ride to work. If you want that, sure go ahead. But as for me, I would rather use that money to buy souvenirs to take with me back home or pay for accommodation. From the KEF airport to Reykjavik, it could easily cost 200$ at least for the taxi ride. I have heard some stories of disbelief from tourists about the taxi fares. They are just shocked to find out how much they have to pay at the end of the trip.
4. Camp - The summertime months of June - September sees the highest peaks in hotel rates. I have worked for a hotel before and have seen reservations made a year before the guests come into the country. This doesn´t give them any more discount than if they had booked 3 months before. The prices have been set for the whole year and unless you stay at an AirBnB or bed and breakfasts/hostels, you will have to shell out at least 150,00 EUR a night.
Camping would probably be the cheapest option. Campsites are located all over the country. With your car, you can drive around, stop at a campsite, take out your tent and sleep for the night. Rough it out for a few days when the weather is good and go for the bed and breakfasts when there is bad weather. I love camping and I can say that it is really safe in Iceland. We sometimes drive out into the countryside, camp at a foot of some hill (whenever legally possible) and then drive on in the morning.
Campsites are all over the country. You can buy a camping card for 105,00 EUR that you can use in 42 campsites in Iceland. You may also choose to just pay about 1.000 ISK per person whenever you go into a campsite. There is usually a person who knocks on your tent and asks for the payment if there is no cashier station. It is convenient to be in a campsite because they have showers, toilets, water and electricity. Some campsites even have wifi connection. These places are also safe. Campsites are closed in the wintertime.
5. Daytours - I would recommend purchasing daytours if you don´t plan on hiring a car. Most daytour companies offer a pick up and drop off service. That alone can save you about 5.000 ISK (2 pax) for the bus fare to get from the airport to Reyjavik. Renting a car is the cheapest option by far though. Wheels and Tours offers daytours and free travel advice services to tourists.
6. Food - Buy groceries at Bonus and/or Netto. Both are the cheapest options for food. Restaurants cost a but more but remember, you don´t need to tip in Iceland for service. It is not required nor expected but of course welcomed.
7. Water - Don´t waste your money buying bottled water. Iceland has one if not the highest water qualities in the world. The water from the tap is cold and fresh and free! Literally free. Icelanders don´t pay for the cold water. They only get a bill for their hot water consumption.
Lastly, check out free events held in Reykjavik from the Reykjavik Grapevine at grapevine.is
