Iceland is a remarkable destination that offers breathtaking experiences, from the midnight sun over the Jokulsarlon Glacier Lagoon to the northern lights above steaming hot springs. While it's a dream destination, the cost of visiting Iceland can be a concern for many travelers.
Fear not—exploring Iceland on a budget is possible. Accommodation is usually a significant expense during travel, but Iceland offers a variety of affordable options, including hostels, guesthouses, and cheap hotels.
Whether you base yourself in Reykjavik and take day trips or rent a car to navigate the Ring Road, there are economical ways to manage your lodging expenses. In this guide, we'll show you how to find the best value accommodations and provide practical tips to help you enjoy Iceland without overspending.
Let's explore the top 10 affordable places to stay in Iceland.
Top 10 Cheap Places to Stay In Iceland
Galaxy Pod Hostel (Reykjavik)
Galaxy Pod Hostel in Reykjavik offers a unique, futuristic lodging experience with capsule-style rooms. Each pod has amenities to ensure comfort and convenience, including personal ventilation systems, mirrors, power outlets, secure storage boxes, and TVs.
The hostel allows guests to explore the city quickly and is within easy reach of Reykjavik's bustling attractions, vibrant nightlife, and shopping areas. The pods provide privacy and a novel experience compared to traditional hotel rooms.
The hostel's communal spaces are designed to enhance your stay. A fully equipped kitchen and a cozy lounge area are perfect spots to socialize with other travelers.
For added entertainment, there's a virtual reality gaming room, offering a fun and relaxing way to end a busy day of sightseeing. Galaxy Pod Hostel offers a memorable and comfortable stay for those interested in a modern, budget-friendly accommodation option in Reykjavik.
Whether you're a solo traveler or with a group, this hostel's innovative approach to lodging makes it a must-try destination.
Nordurey Guesthouse and Nordurey Hotel City Garden (Reykjavik)
The Nordurey Guesthouse and Nordurey Hotel City Garden offer delightful and wallet-friendly lodging options in Reykjavik, perfect for those searching for a cheap hotel.
Nordurey Guesthouse, positioned just a short walk from the vibrant center of Reykjavik, provides economical and comfortable accommodations. Guests can enjoy clean rooms with shared bathrooms and access to a communal kitchen. Nearby, one can easily visit iconic sights such as the Hallgrimskirkja Church, making it an ideal choice for those exploring the city's main attractions.
In contrast, the Nordurey Hotel City Garden is nestled in the serene residential area of Laugardalur. This hotel offers a more secluded experience with modern, private rooms perfect for relaxation.
Guests can enjoy leisurely walks in the nearby parks or unwind in the hotel's tranquil garden after sightseeing. The guesthouse and the hotel present excellent choices for travelers seeking a pleasant stay in Reykjavik without stretching their budget.
Whether you're looking for the homey feel of a guesthouse or the additional amenities of a hotel, these accommodations provide a great base to enjoy the wonders of Reykjavik at a reasonable cost.
Apotek Guesthouse (Akureyri)
The Apotek Guesthouse in Akureyri is an affordable and charming choice for travelers, making it a standout among Iceland hotels. Initially a pharmacy, this guesthouse offers a unique historical twist reflected in its name.
It provides clean and cozy accommodations, featuring rooms with shared bathrooms and kitchen facilities for meal preparation. Located in Akureyri, this guesthouse is a perfect base for exploring Iceland's northern regions.
It offers easy access to the famed Diamond Circle. This route showcases some of Iceland's most breathtaking natural wonders, including the powerful Dettifoss Waterfall, the picturesque Lake Myvatn, the horseshoe-shaped Asbyrgi canyon, and Husavik, known for its excellent whale-watching opportunities.
For those searching for a cost-effective yet comfortable stay in a place steeped in history and close to some of Iceland's top natural attractions, the Apotek Guesthouse is an excellent option. Ideal for travelers eager to explore Akureyri and the broader northern region, it provides convenience and a touch of historical charm.
Hafnarstræti Hostel (Akureyri)
The Hafnarstræti Hostel in Akureyri offers a unique and budget-friendly lodging experience with comfortable and private sleeping capsules. Inspired by Japanese minimalist design, these capsules provide a cozy, enclosed space ideal for solo travelers or couples, making it a standout choice as a cheap hotel for those seeking privacy on a budget.
Strategically located in the northern town of Akureyri, this hostel merges affordability with a vibrant social atmosphere. It boasts various pod sizes in quiet hallways to ensure privacy.
Beyond the personal sleeping areas, guests can access a shared space featuring a kitchen, multiple bathrooms with showers, and a cozy lounge area for relaxation. Akureyri, known for its picturesque charm, hosts several attractions within walking distance from the hostel.
These include the iconic Akureyrarkirkja church and the world's northernmost botanical gardens, among other local sights. Hafnarstræti Hostel is an excellent choice nestled in the vibrant heart of Akureyri for travelers looking for an affordable stay without sacrificing comfort and social interaction.
Dalahyttur Lodges (West Iceland)
Dalahyttur Lodges in West Iceland is an excellent choice for those looking to discover the region's natural wonders without breaking the bank. These lodges offer a quiet getaway with cozy private cabins and rooms that blend rustic charm with comfort, all at a reasonable price set in a beautiful location.
Situated near the Snaefellsnes Peninsula, Dalahyttur Lodges provides easy access to many remarkable attractions. You can hike to the Eldborg crater or visit Ytri-Tunga beach to watch seals lounging along the shore.
Dalahyttur Lodges offers the perfect blend of solitude, beauty, and affordability for travelers seeking a quiet escape surrounded by stunning landscapes. It's an ideal spot for those wanting to connect with nature and enjoy the tranquility of Iceland's less-traveled paths.
This makes it a nice hotel choice among the hotels in Iceland for those eager to explore the area's pristine environment.
Langavatn Guesthouse (North Iceland)
Langavatn Guesthouse in North Iceland offers a charming slice of Icelandic countryside living. This cozy retreat offers four bedrooms with shared bathrooms and small cabins with private bathrooms.
It's known for its warm hospitality and peaceful setting. The guesthouse is perfectly positioned to explore nearby attractions.
It's between the quaint town of Husavik and the picturesque Lake Myvatn. If you stay here, make sure to visit the Myvatn Nature Baths.
Langavatn Guesthouse is a great choice for anyone looking for an affordable and tranquil place to stay, complete with the warmth of traditional Icelandic hospitality.
Grai Hundurinn Guesthouse (East Iceland)
Grai Hundurinn Guesthouse in Egilsstadir, East Iceland, offers a cozy and affordable place to stay. Known as The Grey Dog Guesthouse, this family-run accommodation provides a welcoming atmosphere with clean and comfortable rooms.
Guests can choose between standard rooms or private cottages, making it an ideal starting point for exploring the stunning landscapes of the East Fjords, including trekking routes and wildlife. The guesthouse's location in Egilsstadir boasts convenient amenities like restaurants and shops.
Nearby attractions include Iceland's largest forest, Hallormsstadaskogur, and the enchanting Lagarfljot Lake, known for its legendary tales. For a friendly and cost-effective stay, consider Grai Hundurinn Guesthouse as your home base while discovering the natural wonders of East Iceland.
This guest house offers a charming alternative to the typical hotels closer to Reykjavik Keflavik airport, providing a quieter, more intimate experience.
The Barn (South Iceland)
The Barn, located near the village of Vik on Iceland's South Coast, blends rustic charm with modern amenities. It's an appealing and affordable hostel that offers family rooms with bunk beds, perfect for larger groups, and double rooms for those desiring privacy.
One of the highlights of staying at The Barn is its proximity to some of Iceland's most stunning natural attractions. The famous black sand beach of Reynisfjara is just a five-minute drive away, and the breathtaking waterfalls of Skogafoss and Seljalandsfoss are also close by.
With its friendly atmosphere and convenient location, The Barn is an excellent choice for travelers looking for a budget-friendly base to explore the natural beauty of Iceland's south coast.
Hotel Cabin (Reykjavik)
Hotel Cabin in Reykjavik is a fantastic, budget-friendly option for travelers seeking economical accommodations. It offers simple, clean rooms known for their neatness and warm hospitality.
Just a short drive from the city center hotels, Hotel Cabin makes it easy to access the heart of Reykjavik. The hotel offers various room options to accommodate different budgets. Each is equipped with flat-screen TVs and a private bathroom.
More expensive rooms offer extra features for added comfort. Located near Laugardalur, a hub for leisure activities in Reykjavik, guests at Hotel Cabin have easy access to several attractions.
These include the Reykjavik Family Park & Zoo, the city's most extensive geothermal pool, Iceland's national football stadium, and the beautiful Reykjavik Botanical Garden.
For those looking for a pleasant stay without spending too much, Hotel Cabin serves as an ideal spot to base your exploration of Reykjavik and its surroundings.
Kex Hostel (Reykjavik)
Kex Hostel, located in a former biscuit factory in central Reykjavik, is a top pick for travelers watching their budget. It has an industrial but warm feel and a vibrant social scene, making it a favorite among both tourists and locals.
Just steps from the Reykjavik seafront, Kex is near major attractions like Hallgrimskirkja Church and Harpa Concert Hall. The main shopping street, Laugavegur, also offers shops, bars, and restaurants.
The hostel offers a variety of rooms to fit any budget, from shared dorms where you rent a bed to private rooms. More than just a place to stay, Kex Hostel serves as a social hotspot with regular concerts, events, and some of the city's most reasonably priced beer.
Facilities include a shared kitchen, laundry, a gym, and a library. Kex Hostel is an excellent option for an affordable stay with plenty of fun and convenience.
Additional Tips for Saving Money in Iceland
- Cook your own meals to save money and refrain from buying bottled water.
- Purchase a Reykjavik City Card to gain access to various city attractions.
- Book your trip well in advance and consider traveling during the off-season for lower costs.
- Utilize public transportation instead of renting a car to navigate around the cities and popular tourist sites.
- Stay in hostels or guesthouses rather than hotels to reduce accommodation costs significantly.
Final Thoughts
Exploring Iceland doesn't have to come with a hefty price tag, especially when finding a place to stay. From the unique, futuristic Galaxy Pod Hostel in Reykjavik to budget-friendly guesthouses scattered across the country, numerous options cater to all travelers looking to save money without sacrificing comfort.
By choosing affordable accommodations like hostels and guesthouses, utilizing a Reykjavik City Card, cooking your own meals, and traveling during off-peak seasons, you can make your dream Icelandic adventure a reality even on a tight budget. Remember, the beauty of Iceland is accessible to everyone with a bit of planning and some savvy travel hacks.
Consider booking a day tour to explore Iceland's iconic Golden Circle. Many tours offer great deals and can help coordinate comfortable and affordable accommodations. D
Don't miss out on this unforgettable experience—book your Golden Circle tour today!
FAQs
What is the cheapest way to get around Iceland?
Buses are economical for traversing Iceland, especially during summer, when you plan to travel across its diverse landscapes, such as the Ring Road and the Highlands. Reykjavík Excursions, Sterna, and Stræto are the leading bus companies offering comprehensive routes.
What is the cheapest month to visit Iceland?
Traveling to Iceland between November and March is generally the most affordable, as you'll encounter lower costs on everything from flights to accommodation. This period also saw fewer tourists, providing a more serene experience, although it had shorter days and colder weather.
What part of Iceland is best to stay in?
Reykjavik is often chosen as a base due to its proximity to key attractions and amenities, making it ideal for first-time visitors. South Iceland and the Westfjords offer beautiful, less urbanized environments for those seeking closer contact with nature.
