Beyond the majestic waterfalls and famous Blue Lagoon, Iceland is home to numerous hidden gems that budget travelers can explore without breaking the bank.
Most international flights land at Keflavik International Airport (KEF), located about 50 kilometers from Reykjavik. You can take the Flybus to Reykjavik, which costs 4,000 ISK (approximately $30) one way. For budget-conscious travelers, consider the public bus (Strætó) from the airport to Reykjavik for 1,200 ISK (around $9), though it takes longer.
Once in Reykjavik, the city is easy to navigate on foot, but for areas further afield, consider the Strætó bus system. A single ticket costs 460 ISK (about $3.50), and the buses run frequently. For those wanting to explore the countryside, renting a car can be economical, especially if you travel in groups. Companies like Geysir Car Rental offer compact cars from around 6,000 ISK ($45) per day.
Finding affordable accommodation in Reykjavik is crucial for budget travelers. Check out Kex Hostel located in the trendy 101 district, where dormitory beds start around 5,900 ISK ($45). Not only is it budget-friendly, but the hostel also hosts events, a bar, and a café renowned for its local vibe.
If you prefer a quieter area, consider staying at HI Hostel in the Laugardalur valley, with prices starting at 3,900 ISK ($30) per night. It’s close to the Laugardalslaug swimming pool, a wonderful place to relax and mingle with locals. For those wanting a more unique experience, check Airbnb options in neighborhoods like Vesturbær or Grandi, where you can find private rooms starting at 6,000 ISK ($45) a night.
Icelandic cuisine may seem pricey, but budget travelers can enjoy hearty meals without emptying their wallets. One of the best options is Bæjarins Beztu Pylsur, a hot dog stand located near the Old Harbour, where a famous hot dog costs a mere 480 ISK ($3.60). This iconic eatery is a must-try for its delicious lamb-based hot dogs topped with crispy onions, remoulade, and sweet brown sauce.
For traditional Icelandic food at a reasonable price, head over to Café Loki near Hallgrímskirkja. Their lunch specials start at 2,300 ISK ($17), featuring dishes like rye bread, herring, and lamb soup. The café also offers a stunning view of the church. On days when the weather is nice, consider eating at one of the many food trucks in Harpa, where you can find local seafood tacos for about 2,000 ISK ($15).
Iceland is famous for its natural wonders, and many hidden gems don’t require an expensive tour. Start at Þingvellir National Park, where you can hike and see the rift between the North American and Eurasian tectonic plates; entry is free, and public buses run here from Reykjavik for about 2,000 ISK ($15) round trip. Another must-see is Reykjadalur Hot Springs, where you can hot spring bathe after a scenic hike; it costs nothing to enter, but you’ll need to pack a lunch as there are no vendors on site.
If you’re looking for a lesser-known waterfall, visit Glymur, Iceland’s second tallest waterfall. It’s a challenging hike but costs nothing and offers breathtaking views of the canyon. The trail is well-marked, and it typically takes about 3-4 hours to complete. Lastly, do not miss out on the unique black sand beaches of Reynisfjara, located near Vik. While getting there may require a bus ticket for around 3,000 ISK ($22), standing on the shores surrounded by basalt columns is worth every króna.
Being informed can save you money and enhance your experience in Iceland. Here are some practical tips for your visit:
| Item | Cost | Notes |
|---|---|---|
| Flybus to Reykjavik | 4,000 ISK | Convenient transfer from KEF Airport |
| Strætó bus one-way ticket | 460 ISK | Public transport within Reykjavik |
| Kex Hostel dorm bed | 5,900 ISK | Trendy hostel with bar and café |
| Bæjarins Beztu Pylsur hot dog | 480 ISK | Iconic Icelandic fast food |
| Café Loki lunch special | 2,300 ISK | Hearty local dishes |
| Reykjadalur Hot Springs hike | Free | Beautiful natural hot springs |
| Reykjavik City Card (24 hours) | 4,900 ISK | Access to museums and transport |
The best time to visit Iceland on a budget is during the shoulder seasons of late spring (May to June) and early fall (September to October). During these times, you’ll find fewer tourists, competitive accommodation rates, and a chance to see the Northern Lights in the fall. Prices for flights and excursions tend to drop compared to peak summer season.
Yes, it’s entirely possible to explore Iceland without a rental car. Public transportation options like Strætó buses connect Reykjavik to various attractions like Þingvellir National Park and the Golden Circle. Additionally, some tour operators offer budget day tours from Reykjavik, which can help you see multiple sights without the expense of a car.
Traveler comments
Add a route note, correction, timing tip or question for this guide.