Finding Affordable Lodging Across Iceland
Finding affordable lodging is key to enjoying Iceland without breaking the bank. This guide explores various cheap accommodation options across the island, from hostels and guesthouses to campsites, offering practical advice for budget travelers. When planning a trip to Iceland, many travelers assume that accommodation costs will automatically consume a large portion of their budget. While Iceland is known for being a pricier destination, smart planning and understanding your options can significantly reduce lodging expenses, allowing you to experience more of the country's natural wonders.
The concept of 'cheap' in Iceland is relative, but by focusing on alternatives to standard hotels, you can find significantly more budget-friendly options. This approach is crucial for extending your stay, affording more activities, or simply managing your travel finances effectively. Understanding the seasonal demand also plays a role, as prices can fluctuate dramatically between the peak summer months and the shoulder seasons.
- Hostels and guesthouses offer significant savings over hotels.
- Camping is the most budget-friendly option, especially in summer.
- Booking in advance is vital, particularly outside Reykjavik.
- Consider locations outside major tourist hubs for lower prices.
- Look for self-catering facilities to save on food costs.
This article breaks down the most viable ways to secure cheap stays, focusing on actionable advice for different travel styles and regions. Whether you're exploring the vibrant capital or venturing into the remote fjords, there are ways to keep your head above water financially.
Understanding Iceland's Accommodation Landscape
Iceland's tourism infrastructure is well-developed but heavily skewed towards mid-range to luxury options. However, a growing number of hostels, guesthouses, and farm stays cater to budget-conscious travelers. These often provide a more authentic experience, connecting you with locals or fellow adventurers. The key is to look beyond the traditional hotel model and explore the diverse range of lodging available.
The most significant factor influencing accommodation price is location and season. Staying within Reykjavik or directly on the popular Golden Circle route during peak summer (June-August) will command higher prices. Conversely, venturing to less-visited regions or traveling during the shoulder months (April-May, September-October) can yield substantial savings. Even within Reykjavik, hostels and guesthouses slightly further from the city center can be cheaper.
When searching, be prepared for varying levels of amenity. Some budget accommodations are very basic, while others offer surprising comfort and amenities like shared kitchens, which can further reduce your overall trip cost by enabling you to prepare your own meals.
Hostels: Social Hubs for Budget Travelers
Hostels are often the first port of call for budget travelers worldwide, and Iceland is no exception. They offer dormitory-style rooms, providing the cheapest beds, as well as private rooms for those seeking a bit more privacy without the full hotel cost. Many Icelandic hostels are modern, clean, and well-equipped, featuring common areas that foster a social atmosphere, making them ideal for solo travelers looking to meet people.
Key Amenities and Features of Icelandic Hostels
Most hostels provide shared kitchen facilities, which are invaluable for saving money on food. You can buy groceries from local supermarkets like Bónus or Krónan and prepare your own breakfasts, lunches, and dinners. Common areas, often equipped with Wi-Fi, seating, and sometimes even entertainment, offer a comfortable space to relax. Some hostels also offer laundry services, lockers for security, and organized tours or activities, which can sometimes be more cost-effective than booking independently.
When choosing a hostel, consider its location relative to the attractions you want to visit and its proximity to public transport or parking if you have a car. Read recent reviews to gauge cleanliness, staff friendliness, and overall atmosphere. Dorm beds are typically the lowest price point, while private rooms offer a middle ground between dorms and hotels.
Look for hostels that are part of larger networks or co-operatives, as they often maintain high standards and offer good value.
Where to Find Hostels in Iceland
Reykjavik has the largest concentration of hostels, offering numerous options for every budget. Beyond the capital, you can find hostels in popular tourist towns along the Ring Road, such as Vík, Akureyri, and Egilsstaðir, and even in more remote areas, serving hikers and adventure travelers. Always book in advance, especially if you are traveling during the high season, as popular hostels can fill up months ahead of time.
For example, in Reykjavik, you might find options ranging from large, bustling hostels with many beds to smaller, boutique-style ones. Further afield, hostels might be integrated into guesthouses or even serve as the primary accommodation in smaller communities, often providing a unique local experience.
Guesthouses and Farm Stays: Local Charm on a Budget
Guesthouses and farm stays offer a fantastic way to experience Iceland's hospitality and rural charm while keeping costs down. These establishments are typically family-run, providing a more personal touch than larger hotels. They often consist of a few rooms within a family home or a separate annex, sometimes with shared bathrooms but increasingly with private facilities.
The Appeal of Guesthouses and Farm Stays
The primary draw of guesthouses and farm stays is their authenticity. You're often hosted by locals who can offer insider tips on the best places to visit, hidden gems, and local culture. Many farm stays allow you to interact with farm animals or learn about agricultural life in Iceland, adding a unique dimension to your trip. They are commonly found outside of major cities, providing serene rural settings with stunning natural views.
While not always as cheap as dorm beds in hostels, guesthouses and farm stays generally offer better value than hotels. Prices can be competitive, especially when you consider the included breakfast, which is often a generous spread of local produce. Some also offer meals (dinner) for an additional fee, which can be convenient if you are in a remote location with limited dining options.
Prioritize booking guesthouses with kitchen access if you plan to self-cater more meals to maximize your savings.
Finding and Booking Guesthouses
You can find guesthouses and farm stays listed on various booking platforms, alongside hotels and hostels. Many have their own websites as well. When searching, pay attention to the room types offered – some may be shared facilities, while others are en-suite. The location is paramount; if you're planning a Ring Road trip, incorporating a few nights in rural guesthouses can break up the journey and provide a diverse experience.
For instance, along the South Coast, you’ll find many family-run guesthouses offering stunning views of waterfalls or the ocean. In the Westfjords or North Iceland, farm stays can offer an even more secluded and immersive experience. Booking well in advance is crucial, especially for smaller establishments which have limited capacity.
Camping: The Ultimate Budget-Friendly Adventure
For the truly budget-conscious traveler and nature enthusiast, camping in Iceland presents the most affordable accommodation option. The country has a network of official campsites, many of which are open during the summer months (typically from May/June to September). While wild camping is restricted and generally discouraged due to environmental concerns, using designated campsites is permitted and provides access to basic facilities.
Campsite Facilities and Locations
The facilities at Icelandic campsites can vary significantly. Some larger sites in popular areas like Reykjavik, Skógar, or Mývatn offer extensive amenities, including hot showers, cooking shelters, laundry facilities, toilets, waste disposal, and even communal kitchens. Smaller, more remote campsites might only provide basic toilets and perhaps a shelter. Hot showers often incur a small additional fee, so factor this into your daily budget.
Campsites are strategically located throughout the country, often near major attractions, towns, or along the Ring Road. This makes them an excellent base for exploring regions like the South Coast, the Snaefellsnes Peninsula, or the highlands. Prices are typically per person per night, often with an extra charge for a tent, and sometimes for vehicles or electricity. This makes camping far cheaper than any other form of lodging.
Always check the operating dates for campsites, as many are seasonal and close outside the summer months.
What to Bring for Camping in Iceland
Given Iceland's unpredictable weather, even in summer, a good quality tent is essential. It should be waterproof and wind-resistant. You'll also need a warm sleeping bag (rated for cool temperatures, as nights can be chilly even in July), a sleeping mat for insulation and comfort, and appropriate clothing layers. A portable stove and cooking equipment are highly recommended for preparing your own meals, drastically cutting down on food costs.
Other useful items include a headlamp, power bank for charging devices, basic first-aid kit, and a reusable water bottle, as tap water in Iceland is safe and excellent. Some campsites offer Wi-Fi, but it can be spotty. Planning your route and booking campsites, especially in popular areas, is advised, although many operate on a first-come, first-served basis.
Even with camping gear, the savings over hotels and even guesthouses are substantial, allowing for a longer trip or more spending on activities and experiences.
Strategic Booking and Off-Season Travel
Beyond choosing the type of accommodation, strategic booking and timing are crucial for finding cheap stays in Iceland. Prices for all accommodation types fluctuate significantly based on demand, making the 'when' and 'how' of booking as important as the 'where'.
Embrace the Shoulder and Off-Seasons
Traveling during the shoulder seasons—April to May and September to October—can lead to substantial savings. The weather is often still pleasant, daylight hours are reasonable, and the crowds are thinner. This period offers a good balance of accessibility and affordability. The winter months (November to March) offer the lowest prices but come with shorter daylight hours and more challenging driving conditions, which might limit exploration for some.
The summer months (June to August) are the peak season, and consequently, the most expensive. If your budget is tight, aim for late May or early September when you might still catch good weather but avoid the highest prices. Off-season travel, particularly for those interested in the Northern Lights, can be incredibly rewarding and cost-effective.
Booking in Advance
While it might seem counterintuitive for budget travel, booking accommodation well in advance, especially for popular locations and during peak season, is often necessary to secure the cheapest options. Budget-friendly hostels and guesthouses tend to fill up quickly. Last-minute deals on cheap accommodation are rare in Iceland.
When booking, compare prices across different platforms. Sometimes booking directly with the accommodation provider can offer better rates or more flexible cancellation policies. Always check the cancellation terms to ensure you have flexibility if your plans change.
Consider Locations Outside Tourist Hotspots
Staying in or very near major tourist attractions like the Blue Lagoon, Gullfoss, or Jökulsárlón will almost always be more expensive. Look for accommodation in nearby towns or villages that are a short drive away. For example, instead of staying directly in Vik, consider accommodation a little further east or west along the South Coast. Similarly, in the Reykjavik area, consider towns outside the immediate capital if you have a car.
Utilize resources like Google Maps or local tourism websites to identify smaller settlements or rural areas that might offer more affordable lodging options but still provide convenient access to key sights. The Iceland Road and Traffic Administration website (vegagerdin.is) is invaluable for checking road conditions, which is critical when considering more remote stays.
Self-Catering and Budgeting for Food
Food costs can quickly escalate a trip budget in Iceland. By embracing self-catering, you can save a significant amount of money, making your overall trip much cheaper. Most budget accommodations, particularly hostels and campsites, offer kitchen facilities specifically for this purpose.
Leverage Grocery Stores
Iceland has several budget-friendly supermarket chains that are your best friend when trying to eat cheaply. Bónus, recognizable by its pink pig logo, is the cheapest. Krónan is another good option, offering a wide range of products at competitive prices. Other chains like Nettó and Fjarðarkaup are generally more expensive but might be more convenient in certain locations.
Stock up on essentials like bread, cheese, yogurt, fruits, vegetables, pasta, rice, and canned goods. Preparing your own breakfast each morning and packing lunches for day trips will save you substantially compared to eating out for every meal. Even preparing simple dinners in your accommodation can cut food expenses by more than half.
A cooler bag or small cooler can be incredibly useful for storing perishables, especially if you are camping or on a road trip.
Smart Eating Out Strategies
While self-catering is king for budget travel, you might still want to experience Icelandic cuisine. When eating out, look for local bakeries (bakarí) for affordable sandwiches, pastries, and coffee. Gas stations often have surprisingly decent hot dogs (pylsur) and simple hot meal options which are much cheaper than restaurant meals. Food trucks can also offer more budget-friendly meals in tourist areas.
Consider eating your main meal at lunch, as lunch menus are often cheaper than dinner menus at the same establishments. Look for restaurants offering set menus or 'dagkarmatur' (dish of the day), which can represent better value. Avoid eating in restaurants located in prime tourist spots or directly attached to major attractions, as they tend to be more expensive.
Hydration and Snacks
Tap water in Iceland is of excellent quality and perfectly safe to drink. Carry a reusable water bottle and refill it often instead of buying bottled water. This saves money and reduces plastic waste. For snacks, consider buying items like muesli bars, dried fruit, or nuts from the supermarket rather than expensive convenience store options.
Where to Stay Cheap in Reykjavik and Beyond
When planning where to stay cheap in Iceland, the capital city, Reykjavik, offers the most diverse range of budget accommodation options. However, affordable lodging can also be found across the country, particularly if you venture away from the most frequented tourist hubs.
Reykjavik Budget Stays
In Reykjavik, hostels are plentiful and cater to a wide range of travelers. Many are located centrally, making them convenient for exploring the city on foot. You'll also find a selection of guesthouses and budget hotels. For extreme budget travelers, consider the Reykjavik Campsite, which is well-equipped and offers tent and campervan spots, as well as basic cabins and rooms. It's located a bit outside the city center but is well-connected by public transport.
Consider booking accommodation with kitchen access even in Reykjavik to save on daily food expenses.
South Coast Options
Along the South Coast, a popular tourist route, budget options can be scarcer but are available. Towns like Hvolsvöllur, Hella, and Selfoss offer guesthouses and hostels that are typically cheaper than those in Vik or Skógar. Further east, near Jökulsárlón, options are limited and expensive, making staying in Höfn or nearby villages a more budget-friendly choice, though it requires more driving.
Golden Circle on a Budget
The Golden Circle is easily accessible from Reykjavik, making it feasible to stay in the capital and do day trips. However, if you wish to stay closer, towns like Laugarvatn, Fludir, or Selfoss offer guesthouses and smaller hotels that are more affordable than establishments directly next to Geysir or Gullfoss. Camping is also an option at several sites along the route.
North and West Iceland
Akureyri, the 'Capital of the North,' has a good selection of hostels and guesthouses. Beyond Akureyri, exploring areas like the Mývatn region or the Westfjords will require more planning for budget stays. Farm stays and small, family-run guesthouses are common in these more remote areas. While they might not always be the absolute cheapest, they offer incredible value and unique experiences.
Northern Lights Accommodation: Budget Considerations
If your primary goal in visiting Iceland is to witness the Northern Lights, finding cheap accommodation requires a strategic approach that balances cost with viewing potential.
Location is Key for Aurora Viewing
The Northern Lights are best viewed away from light pollution. This means rural locations are ideal. While rural accommodations might sometimes be more expensive due to limited options, they are often simpler guesthouses, farm stays, or even campsites that can be budget-friendly. Staying in Reykjavik offers little to no chance of seeing the Aurora due to city lights.
Prioritize accommodations that are situated in dark sky areas, even if they are slightly more remote.
Seasonal Savings for Aurora Hunters
The Northern Lights season runs from late August to mid-April. Traveling during the shoulder months within this period—September, October, early November, and March, April—can offer a sweet spot for both viewing opportunities and lower accommodation prices compared to the peak winter months of December and January. These months still offer long, dark nights essential for aurora spotting but with potentially milder weather and fewer crowds.
Consider staying in areas known for good Northern Lights visibility that also have budget options, such as the South Coast (away from towns), North Iceland (around Lake Mývatn), or the Westfjords. Many guesthouses and farm stays in these regions are accustomed to aurora-seeking guests and may offer advice or even aurora wake-up calls.
Campsites and Aurora
For the ultimate budget aurora experience, camping is an option during the earlier and later parts of the season (late August to early September, and April). While cold, it offers unparalleled access to dark skies. However, this is only feasible if you are well-equipped for cold weather camping. Even if you are not camping, staying in a basic cabin at a campsite or a simple guesthouse in a remote area can be far cheaper than a hotel and provide excellent aurora viewing potential.
Tips for Saving on Accommodation in Iceland
Maximizing your savings on where to stay cheap in Iceland involves a combination of smart planning, flexible choices, and a willingness to embrace different types of lodging. Here are actionable tips to help you keep your accommodation costs low.
1. Book Well in Advance
This cannot be stressed enough. The cheapest and most popular budget accommodations, especially hostels and guesthouses in scenic or convenient locations, are booked months ahead, particularly during the summer. Last-minute deals are uncommon for budget options in Iceland.
2. Travel Off-Season or Shoulder Season
As detailed earlier, avoiding the peak summer months (June-August) is critical for lower prices. Consider April-May or September-October for a balance of decent weather, manageable crowds, and reduced accommodation rates.
3. Utilize Shared Facilities
Opt for dorm beds in hostels, rooms with shared bathrooms in guesthouses, or campsites. The savings are substantial compared to private en-suite rooms or hotel rooms.
4. Embrace Self-Catering
Equip yourself with groceries from budget supermarkets like Bónus and Krónan. Prepare your own breakfasts and lunches, and cook dinner at your accommodation whenever possible.
The savings from self-catering can often fund an extra activity or excursion.
5. Consider Locations Beyond Tourist Hotspots
Stay in towns or villages a short drive away from major attractions. For example, look for accommodation near the Golden Circle rather than directly on it, or explore options slightly off the main tourist routes.
6. Look for Group Discounts or Longer Stays
Some hostels or guesthouses might offer discounts for booking multiple beds or for longer stays. If traveling with a group, coordinating bookings can lead to better rates.
7. Check Multiple Booking Platforms
Compare prices on sites like Booking.com, Hostelworld, and Airbnb. Also, check the accommodation's direct website, as sometimes they offer better deals or more flexible terms when booked directly.
8. Factor in Transportation
If you plan to rent a car, your accommodation choices can be more flexible. Staying in more remote, cheaper locations becomes feasible. If relying on public transport, prioritize accommodation within walking distance of bus stops or in towns with better connectivity.