How to manage budget while traveling to Iceland -exclusively for Indians

20th Mar 2019
Photo of How to manage budget while traveling to Iceland -exclusively for Indians 1/2 by Jyoti Patil

I am looking at the golden ball of fire sinking behind the uneven silhouette of concrete jungle as I sip my coffee. I cannot help but think about the coffee I used to have in my car while in Iceland. It sure tasted amazing. With frozen fingers, I would rush to grab my flask and pull out big jar of my home-made coffee mix. Pour some powder in the cup, add hot water from the flask and voila. I sipped it while I enjoyed a slow drizzle of the rain, or clutched on to the cup as I sat patiently for the blinding snow-storm to pass. If not for that coffee, my days would have been sure miserable. Wondering, why am I saying this? It is because a budget trip to Iceland can set you back about 2Lakh INR per person give or take, so you gotta make every effort to save your precious pennies. Alright you can close your mouth, I know how you feel. But worry not, this detailed guide will help you manage your budget for Iceland travel in every possible way. It will be difficult to stretch the budget, below above mentioned threshold, but hey if you can, then do let me know. This guide will serve better to those who are from Indian Subcontinent.

We shall look into each of the aspects of traveling in detail here. Do not underestimate the costs of food, transportation and accommodation they equally add up to a big sum eventually, over-throwing your budget. Read on:

How to save money on Visa processing?

If you have been regular follower of this blog, you would have already read my detailed Iceland visa guide here.

As mentioned in that post, with little patience you can process your Schengen visa yourself, without any agent. Doing that will save few thousand rupees right away.

Points to remember:

Work on your visa by yourselves whenever possible. If doing visa on your own is not possible, shop around and ask for the best quote from the agents, believe me you can always negotiate.

How to save money on flights?

This one is quite interesting. I believe a lot of times it's just luck when you hit that book button on flights. But we cannot depend on luck all the time, hard and smart work are words for a reason.

Your international travel destination, should be ideally planned months ahead. It is true that as the travel date approaches, flights get expensive. Certainly, in some situations, it may not be possible to book months ahead. A survey suggests that one should book a flight at-least 172 days in advance.

If you are like me and never plan something so many months in advance then worry not, you can always discover flight prices smartly.

When I start looking for flights, I start with or Both of these sites are excellent, in terms of user friendliness and usability. I always try to select option as Flexible-dates. These websites have good UI that allows you to look at the whole month in terms of flight prices. If you are flexible with dates, this can go a long way in your planning.

A good homework about destination country airports and airlines that fly in and out, can also be beneficial. In Iceland, Keflavik international airport is the biggest and only to fly in and out. When I was looking for flights to Reykjavik, Finnair was the only cheapest option. But taking Finnair from Bombay was way too expensive compared to Delhi. Hence I divided my itinerary from Pune to Reykjavik. I booked separate itineraries for Pune-Delhi and between Delhi-Reykjavik. I also booked Reykjavik to Paris, and Paris to Delhi separately. All flights were booked individually via,, Finnair and IcelandAir websites. This method turned out to be super saver.

Points to remember:

Try to book flights few months ahead of the planned travel date. Break down the itinerary and try all the permutations and combinations. Book directly from airline website. Check if you really need Economy flex vs Economy saver. Trust me there isn't much difference in the comfort. Keep dates flexible. Look up flights in incognito mode. As much as possible select midweek travel dates and make booking during midweek as well. Don't forget to use your travel credit card or the credit card that earns you points.

Photo of How to manage budget while traveling to Iceland -exclusively for Indians 2/2 by Jyoti Patil

How to save money on accommodation?

As much as fun it is to hunt for an accommodation last minute, it comes with its set of pleasant surprises and disappointments. During my ring road drive, on the very first night, I got stuck in a snow-storm sort of situation. The violent wind left the most experienced drivers paralyzed and off roads. I clearly had a terrible day driving on slippery road. It was impossible to drive the last 30KMs that led to my planned accommodation. I gave up, enquired for the nearest possible hotel. I was lucky to find the Indian couple who I met earlier at Budir. We ended up sharing a hotel room. Expensive but my god, what a view it had. Pleasant but expensive experience.

Iceland is one of the sparsely populated countries. Out of 350,000 residents 60% of them live in Reykjavik. Clearly when you are circling the ring-road, hotels and hostels are scattered and fewer. Depending on what season you travel, you will have to decide how you want to make your B&B arrangements. Since I was traveling solo, I booked my hostels, way ahead in order to get reasonable rates and a guaranteed availability. I got quite good deals, by pre-booking accommodation. Another important reason to pre-book was, during port of entry, it is highly likely that all your bookings will be verified, like mine were. Never hurts to be prepared, is it? I might have been denied entry who knows, if I weren't prepared. However the Indian couple I met, they did their bookings on-the-fly each day, and it worked out great for them. They had no issues during port-of-entry.

For Iceland one of the best website to get reasonable accommodation is Almost all of the hotel, hostels, B&Bs, Homestays are registered on this website. Free cancellation is always available for a lot of stays. There are few other websites like, Airbnb, with good stay options, but are expensive compared to . If you are looking for off-beat hostels with sustainable and responsible tourism options is a good website too(I have not used it personally). Unfortunately except for everything else was way too expensive, in my opinion.

The cheapest hostel beds you will find are only in Reykjavik. The cheapest bed costed me €23 in a 14 bed dorm room. If you are traveling in a group, it may feel like prices might come down by sharing but then it adds up in food. Sorry to burst your bubble but there is no easy way out.

Another great option for accommodation in Iceland is, camper vans. But let me warn you before I give details. There are lot of challenges to drive a camper van. As much as it is a fun way to get around Iceland, you should not opt for this option during winter. Driving can be challenging even for seasoned drivers and camp sites might be mostly closed. No, you cannot camp wild. All of the land in Iceland is privately owned. Due to the center of gravity of the camper, it can be extremely challenging to drive during bad and windy weather conditions. Iceland is notoriously famous for gusty winds. You should have experience in driving a camper, before heading out to Iceland. However during summer this can be a good option. Don't forget to book your camper months ahead. Good bargains are difficult to find. Campers save you on accommodation while you get the best of sunrises and sunsets.

Tip: There are some sleeping bag only accommodations in Iceland. In my opinion they are an excellent choice, if you don't mind carrying your own sleeping bag. One of my hostel was sleeping bag only, however they do rent linen for €15 per night.

Points to remember:

Where ever possible, book hostel dorm beds. There isn't much difference between a 6 bed dorm and a 14 bed dorm, speaking from experience! Hostels have private rooms too, which turn out to be way cheaper than hotels. Good option for couples or when you need privacy. Check for reviews on Try to book accommodation in advance. This will save you from last minute unavailability. Needless to say, the running around that needs to be done to secure a reasonable accommodation, will be avoided. Do not try this in Summer, most accommodations in Iceland are sold out. All the accommodations in Iceland were clean, first class accommodations. Check for breakfast-included options. (P.S. : Do not have high hopes on the breakfast served in Iceland. It is dry and cold breakfast mostly.) You might as well opt for places without breakfast and cook your own. [Mainly applies to Iceland travel] Do not forget to note check-in and check-out time. Iceland accommodations have the most peculiar check-in-check-out timings.

How to save money on food?

My favorite part in this post. It is needless to say the homemade coffee mix, I made was a real hit. If you are anything like me, who cannot do without caffeine, you must try this recipe. All you have to do is dry blend your choice of instant coffee powder with milk powder, sugar and cocoa powder(if you would like) and pack it in an airtight container, that is it. Add hot water on the go and voila, you will save at the least €50 - €100(about 10 days trip) per person, considering you have coffee twice a day. That's a lot of saving, right there. (I had to make it myself, as there was no other reasonable option in supermarkets of Pune for instant coffee mix)

Once you are outside cities, food is expensive and difficult to find in Iceland. Quite often I saw people throwing in some jam or peanut butter between slices of bread as a meal. Restaurants and convenience stores are again far and between. You will get mostly dry breakfast at hotel and by dinner time if you don't reach a town, your options to get food will be quite slim. You can't go hungry to bed, can you? Eateries open late around 9-10AM and close early, well Man's gotta eat, right?

Here are some top notch suggestions. Needless to say, these will save you a ton of money.

Breakfast has to be the best meal of your day. Now this is important; Buy bread, spreads, some greens, peanut butter and choice of salami from Bonus or similar supermarkets from Reykjavik. [Bonus supermarket chain is the cheapest in Iceland. Outside Reykjavik you will find very few budget supermarkets]. Now all you gotta do is make a custom sandwich, how hard can that be? Don't like sandwiches, then carry some instant Poha or Upma mix, just add hot water and your perfect Indian breakfast is ready. Boy I had fun cooking in Iceland.

Lunch is a little tricky meal. I used to make extra dinner at night and carry the leftovers for lunch. Some days I had fish and chips[not an economy option but once in a while it was okay]. Some days I picked up wraps and burritos from Gas Station stores or N1[again not really budget friendly but it was fine to mix and match]. Other days, even I, ended up with a sandwich fix. Only once did I really ate at a Gourmet restaurant, I sort of regret it as it costed me an arm and a leg. But everything here I mention still is part of the above mentioned budget.

I made dinner, upon reaching hostel every night. Almost all of the accommodations in Iceland will have a fully furnished kitchenette. Hotels, Hostels, and guest houses all of them.[Please mind the kitchen rules, as an ethnic group we tend to pay no attention to cleaning and maintaining mannerisms in public places. Just saying! Don't get me wrong]. Quite a few nights I cooked pasta, it is versatile, filling and healthy. I had egg fried rice, instant noodles or sautéed vegetables with bread on other days.

While shopping, make sure to read food labeling accurately. A lot of times it is written in Icelandic. Buy lots of fruits and carrying some bakery items for road for snacking.

Note: Thanks to Prerna for this great tip. Cheese is quite expensive in Iceland, see if you can, carry it from India or your connecting airport before landing in Iceland.

For drinks and alcoholic beverages, I will only suggest one thing. Buy all your beverages from cocktails to liquor from Reykjavik airport duty free store. Thank me later.

Points to remember:

Pre-pack as much as you can from your homeland. Even MacD and Burger King isn't cheaper in Iceland. Not only that you can hardly find any fast food joints outside cities. If you eat Beef and Pork, feast upon the famous Icelandic hotdog. Apparently it was quite good, as per feedback from fellow travelers. Learn to cook basic recipes. Try new things, your Indian food can only last for so long. Read food labeling and pricing carefully. 2.900 ISK means 2900 ISK which is equivalent to roughly 1600 INR. Read the menu and cost of food before placing order. Buy grocery from Bonus supermarts in Reykjavik or Akureyri. Eat plenty of avocados(the super food with loads of calories and nutrition) and fruits. Don't forget to take your stuff out from refrigerator each day when you check out. Buy your liquor from Keflavik airport.

How to save on internal transportation?

In terms of transportation, there are very few options in Iceland. You could rent a car and drive on your own. You can book tours from different tour companies. If you are a hard core backpacker you could try hitchhiking. Let me elaborate.

Car rental:

In my personal opinion, renting a car in Iceland is the best way to see the beauty of this country. Renting car or camper(in Summer) can actually turn out to be reasonable, especially in a group. I found to be the best website that aggregates options from many rental companies. It is hassle free and you can make a reservation right away. There will be a detailed post on Car renting and driving.

Group tours:

This is quite a cost effective option. You just sit back and take in the scenery from the cozy seat of the bus. These buses can take you around Golden circle, Glacier lagoons, and other main sites. Most of the buses start from Reykjavik city. This option suits well, if you have 3-5 days to spare in Iceland. If you do not know driving, no worries, just take a tour. There are dozens of tour companies, with hundreds of different itineraries just pick whatever suits your pocket and plan. You also get to meet people from all over the world.

However there are few cons with this type of travel. The buses will take you only to specific spots, meaning you can't stop to see those reindeers running around the fields. They leave early morning and will usually cover lot of places in a day and drop you back in Reykjavik. If you are a photographer this option may not really work out for you, due to obvious reasons. You will have to wait in line longer till people finish taking selfies in front of waterfalls and other sites. Sometimes people tend to hog a place. I personally feel these tours suck out the true essence of traveling and exploring. Meaning no getting lost, no getting stuck in bad weather and no impromptu interactions with locals and strangers.


This one is the cheapest and the most challenging one in Iceland. I would highly recommend not to try this during winter. Trust me there are very few cars on the road and I did not see a single person trying this stunt during my 11 days in Iceland. Alternatively you could try car pooling with people in your hostel or hotel. There are ride sharing websites like , and more. There are Facebook groups as well. It did not work out for me but hey you could always give it a try. Regarding safety in Iceland I already mentioned in one of the posts, DO NOT WORRY. It is one of the most safest countries out there.

With all these awesome insights I am sure you will be able to manage your Iceland trip in a reasonable budget. Always remember to keep some buffer for surprise expenses like loss of luggage, parking, attraction fees, fees to use the washroom and so on.

I know, it sounds overwhelming and it is easy to just scrap the plan, but you have to put little bit effort during planning. Your efforts won't go in vain, I promise.