Iceland on a budget (vol.2)

Everything about budget accommodation in Iceland. HOSTELS | GUESTHOUSES | CAMPINGS | Iceland on a budget. Budget travel.

We’ve prepared for you more sneaky tricks, which will help you to cut some expenses of your Icelandic adventure. In this part of our guide – everything you’ve ever wanted to know about budget accommodation in Iceland. Have a look and save lots of money!

How to overnight the cheapest way?


If you were planning to save some pennies wild camping, don’t do it – it’s illegal in Iceland. A few years ago it was an option, but the law has changed and it’s not anymore. The only exception is if you are hiking far away from the civilisation, for example in the highlands. Then you can pitch a tent, provided that it’s not a national park. Otherwise, it’s strictly forbidden. So no wild camping when you are on a classic road trip around Iceland.

Don’t misunderstand us – we just love wild camping! As we are avid hikers, we’ve had an opportunity to camp in wonderful places in Norway, Sweden, Romania, Georgia and a few other countries. We’ve been also wild camping in the mountains in Iceland. You can feel so free out on the hills and away from organised campsites. Nothing compares to these magical mornings when you open the entrance of your tent and start a day looking at absolutely stunning views. What’s more, views reserved only for you! Silence is so alluring then. And if any sounds sneak into your dream, it’s much better when they are heavy rain drops hitting the tent than far too noisy neighbours from the campsite. If you want to experience similar lonely moments in the astonishingly beautiful wilderness, just remember to leave no trace after your camp.

Everything about budget accommodation in Iceland. HOSTELS | GUESTHOUSES | CAMPINGS | Iceland on a budget. Budget travel.


There are quite a lot of campsites in Iceland. You can check their locations on the website If you are going to Iceland for a longer period and you are planning to sleep just on campsites, then a really good idea is to purchase a Camping Card. It entitles you to spend 28 nights on any of the selected campsites and costs 110 EUR. You can buy it at every tourist information, post office or order on their website (it takes approximately one week). Of course, not all campsites belong to this organisation. In addition to these listed on the website, you can find more of them.

Remember that they are open usually from June to August, sometimes September. And if you are worried about camping in bad weather, it’s best to follow current forecasts using the service

For us campsites are often too crowded. A few times we’ve been woken up early in the morning by some not so nice fellows laughing or singing loudly a few steps from our tent.

Have a look at our original Icelandic fine art prints!


You can also take into consideration camper vans. They are usually quite expensive to rent and they consume quite a lot of gas, but there’s a company called Kuku Campers, which came up with a brilliant idea and their prices are unbeatable. They have adapted small cars (Renault Kangoo) as two-person mini campers. At the back you’ve got a mattress, small cooler and a camping stove, so you can travel quite comfortably. And it’s really affordable all year round, not only in the off-season. The prices start at 89 EUR. You can save lots of money travelling this way.

Everything about budget accommodation in Iceland. HOSTELS | GUESTHOUSES | CAMPINGS | Iceland on a budget. Budget travel.


Apart from extremely pricey hotels, where a double room far from anything fancy costs 150-200 EUR, fortunately, there are places, where you don’t have to spend a fortune to overnight. We are talking about hostels. Hostelling International works pretty well in Iceland. There are 32 hostels, which belong to this group and they are located throughout the whole country. If you want to stay in several of them, it’s best to buy their card (3000 ISK/23 EUR), which is valid for one year, not only in Iceland. With this card, you get 700 ISK (5.5 EUR) discount. The cheapest are of course beds in dormitories, but there are also double rooms, which are much cheaper than the hotel ones. You can find all the information and prices on the website

The best solution is to take a sleeping bag and a towel with you, even if you aren’t planning to camp. Then a night in a hostel will be much cheaper. You can also use your own sleeping bag in guesthouses. Guesthouses are more expensive than hostels but in the off-season ‘sleeping bag accommodation’ is quite affordable. Just ask if they offer this kind of accommodation, as it’s not always listed on their websites.

Apart from the HI hostels, you can find many more hostels, where prices are similar. Just remember that in the season you need a reservation. Without having one, it’s difficult to find even a bed in a dormitory, not to mention a private room. If you want to stay in a private room, you should book it well in advance. Several months before is not too early.


Airbnb is a great option when you want to stay for some time in the capital or in one of the bigger towns (in smaller villages Airbnb is not so popular). Renting an apartment (not to mention renting a room) is often much cheaper than staying in a hotel. If you look forward to a moment of solitude during your trip and want to have some rest from bustling hostels and dormitories, we highly recommend it.

If you’ve never used Airbnb before, why not give it a chance? Join today and save 25$ on your first booking, using this link.


If you haven’t heard about this way of travelling, in short, it works like this: you offer something at your place (a room, dinner or coffee), and someone else offers this to you. In Iceland Couchsurfing community is not that small, but restricted mostly to Reykjavík and Akureyri. It’s a fantastic way to get to know Icelandic culture and way of life. If you like to meet new people, exchange travel stories and spend some time with the locals, you definitely have to try it! You can save loads of money too, as it’s completely for free. We recommend it especially if you would like to immerse yourself in the crazy party life of Reykjavík.

Everything about budget accommodation in Iceland. HOSTELS | GUESTHOUSES | CAMPINGS | Iceland on a budget. Budget travel.

We’ve lived and travelled in Iceland for a year and a half so far, and during this time we have tried out all of the above forms of spending a night. What suits our needs best are hostels, Couchsurfing and Airbnb.

Tell us if you have any experience with overnighting on a budget In Iceland. Do you know any other ways of saving on accommodation? Let us know in the comments. And next Sunday we’ll share with you our tips and tricks, which will help you to cut down expenses on food. It will be the third and last part of our guide. Stay tuned!

PREVIOUS PART: Iceland on a budget (vol.1)
NEXT PART: Iceland on a budget (vol.3)

Comments (10)

Thank you for sharing. Some beautfiul pictures.

Love this! I want to get to Iceland too and found your article very helpful with some budget ideas. Thank you!

I have a co-worker who loves AirBNB. I would say, good choice including that in your post.

These are great tips! I’ve been to Iceland once, but it was a long time ago. Would now like to go back together with my family.

Gestur Traustason


Please correct your otherwise good travel guide. Wild camping is illegal – no questions about it.

The link you refer to is wrong and is based on the law that was valid pre-2013. In the new law, it is very clear that the landowner must explicitly ALLOW camping (not prohibit camping like the old law stated). Furthermore, all forms of motorized camping must BE in legal camp-sites. Hikers have slightly more leeway; if they are off the beaten path they can camp overnight on uncultivated land. This basically means that if you are in the highlands and not in a national park you can camp. Whenever you travel by car you are on the beaten path.
Nearly every municipality has prohibited camping except in official camp-sites. Many municipalities offer free camping-sites. Suggesting people save money by wild camping is like suggesting people save food-money by shoplifting.

You can try google-translate for the new law. It’s clause 22.

Please Adam – your blog indicates a love for Iceland. Maybe even the same care I have for this fantastic country. Wild-camping, random parking of campers, human excrement, rubbish… all this is destroying our nature and environment. Please amend your blog to comply with law and ethical travel.

Thank you for your comment, Gestur. We’ve corrected our guide. We had no idea that the law has changed – we’ve heard many conflicting opinions about that. Now we are 100% sure, thank you! We really care about nature and environment and what we can see in Iceland, really makes us sad – all that rubbish, toilet paper here and there. It’s unbelievable. But I guess there’s a solution. If there were more toilets in Iceland, especially at parking places, this problem would disappear. Sometimes you can travel for 200 km without seeing any toilet. I’ve never seen such a mess for example in Norway. And wild camping is legal there.

Wild camping is illegal in Iceland.

We have corrected our text, thank you.

Hey guys, my boyfriend and I are car camping in Iceland in March for a month. I would love to know more about that, you briefly touched on it but what are the rules or tips behind that. We already have a vehicle rented so thats the game plan 100%


Hi Brooke! It’s rather problematic. All campsites are closed in March (some of them are open from May and many from June) and car camping is illegal outside of campsites. But some campings function next to guesthouses or hotels. Even if the camping toilets are closed, I think you could use the hotel toilets then. Just remember that in March it’s still winter here – it’s gonna be cold and windy with lots of snow. Have a great trip! 🙂

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