Budget accommodation in Iceland

The cheapest accommodation types

Hostels, guesthouses with shared bathrooms, and campsites are the classic budget options in Iceland. Many hostels offer private rooms at half the price of a hotel, and guesthouses often include a simple breakfast. In summer, camping is the most affordable way to travel if you have a tent or campervan.

Best budget destinations

• Reykjavik: the biggest choice of hostels and budget guesthouses.
• Akureyri: cheaper than the capital with good northern access.
• South Coast: plenty of farm stays and basic rooms along the Ring Road.
• Eastfjords: lower prices and fewer tourists than the main routes.

Booking strategies

Book early for summer, when even budget rooms sell out. For winter trips, last-minute deals are common in Reykjavik. Stay slightly outside the city centre or tourist hubs — a 15-minute drive can cut the price in half. Compare guesthouses against apartments; sometimes a self-catering flat is cheaper than two hotel rooms.

Free and cheap extras

Take advantage of free breakfast, guest kitchens, free parking and Wi-Fi. Swimming pools are inexpensive across Iceland, and many of the best sights — waterfalls, beaches, geothermal areas — cost nothing to visit.