Our travel style

Before diving into the details, I want to share our travel style to provide additional context for comparison with your own planning.

While we’re not hardcore budget travellers, we do like to save money where we can. And knowing how expensive dining out in Iceland is, we made a conscious effort to minimise our reliance on restaurants or cafes. Instead, we prioritised accommodations with cooking facilities and purchased ingredients from the supermarket. Despite the slightly higher costs for booking these places, the savings we made by avoiding dining out far outweighed this.

Alongside access to a kitchen, we also opted for non-shared accommodations, avoiding boarding houses or hostels. This provided us some privacy so we could easily unwind after a long day of exploring and get a peaceful night’s rest.

Our budget breakdown

Our 9-Night Iceland Itinerary

We dedicated our time in Iceland to visiting the Southern Peninsula, South Iceland (including the Golden Circle), West Iceland and Reykjavik. We were happy with this itinerary as it gave us more time to explore these regions instead of opting for day trips or feeling rushed if we had chosen to travel around the entire Ring Road.

Here’s how our nine nights were planned out:

Þorlákshöfn: 1 night

Hella: 3 nights

Borganes: 2 nights

Reykjavík: 2 nights

Keflavík International Airport: 1 night

Our Iceland accommodation costs

Here’s a breakdown of the places we stayed that were ideal for couples and how much we paid per night (using our cost-saving tips in the next section):

Prices in AUD

Þorlákshöfn – Hótel Kvika: $190.46 per night (included complimentary breakfast)

Hella – Midholl Guesthouse: $217.39 per night (with cooking facilities)

Borgarnes – ‘Small House on a Farm with Beautiful Oceanview’: $161.11 per night (with cooking facilities)

Reykjavík – Northern Comfort Apartments: $186.68 per night (with cooking facilities)

Keflavík International Airport – Aurora Hotel: $231.34 per night (included complimentary breakfast)

In total, our accommodation was $1,769.54 AUD for 9 nights ($1154.87 USD), averaging $196.62 AUD per night ($128.32 USD).

4 Tips for saving money on accommodation in Iceland

There are some easy things you can do to help reduce your accommodation costs. Unfortunately I don’t have coupon codes that will have you saving hundreds but remember that any savings you can secure can be put toward some of the unforgettable experiences Iceland has to offer, like heading out on an ice cave tour, or relaxing at the Blue Lagoon.

1. Consider when you’re visiting

This tip is something I considered when we were initially planning our trip. Like most destinations world-wide, the season, days of the week and alignment of festivals/national holidays play a big part in accommodation prices. Iceland is no different. If possible you could consider booking in either shoulder season (September – October, March – May) or off-season (November – April).

2. Book in advance

Booking accommodation in advance doesn’t guarantee cheaper rates, but it does mean there’ll be more options available. This increases your chances of securing more budget-friendly options, which tend to be snatched up sooner, ultimately saving you money.

Although our Iceland road trip started a month into our Europe trip, we prioritised booking our Icelandic accommodation first. Because of the large number of tourists there’s high demand and limited availability, particularly outside of Reykjavik. I recommend booking your accommodation as soon as you’ve confirmed your flights, or at least three months prior to your arrival, to ensure availability.

3. Always check the direct booking price

Chances are, you look for accommodation options through third-party booking sites such as booking.com or Expedia. There’s absolutely no problem with using these services—we used them too as they’re easy to search and save preferences. 

However, once we had chosen our accommodation on the app, we made it a habit to visit the accommodation’s official website and cross-check the price for booking directly. This strategy worked for our night at Hótel Kvika, where booking directly saved us $33 AUD ($21 USD).

4. Use Cashback Services

There are numerous cashback services out there nowadays that offer cashbacks for using affiliate links. Shopback is a popular option in Australia and this is what we used but there are similar options out there, like Rakuten in the U.S and Quidco in the UK.

I’m not sure about the options other providers provide but Shopback provided cashback opportunities for both reservations through booking.com and for purchasing Airbnb gift cards, of which we then added to our Airbnb account as credit. In total these two forms of cashback allowed us to save $126.55 AUD ($82.59 USD) over our 9 nights in Iceland.