How to Sleep Cheaply in Iceland?

That steep price tag often means accommodation can eat up a huge chunk of one’s budget. However, with smart planning, flexibility, and creativity, it’s absolutely possible to sleep cheaply in Iceland without sacrificing comfort or experience.

In this guide, we’ll explore a wide range of strategies—from camping and hostels to farms and photography-tour tie‑ups—to help you keep nightly costs low. You’ll also learn how combining budget sleeping options with off‑tourist-season travel and tactical use of services like Secret Spots of Iceland, specifically their Iceland Photography Tours page, can give you both affordability and unforgettable memories.

Table of Contents

1. The Spectrum of Low-Cost Accommodation Options in Iceland

Here’s a rundown of the most cost-effective ways to find a roof over your head in Iceland:

1.1 Camping Grounds (~€10–25 per night)

Run by Icelandic Tourism Board (Ferðafélag Íslands): Basic facilities—shared kitchens, bathrooms, occasionally electricity.
Pricing: Around €10–15 for tent sites, up to €25 with facilities like electricity hook-ups.
Benefits: Cheap, scenic, often right beside waterfalls or coastlines.
Caveats: Must stay inside marked grounds—wild camping is heavily restricted.

1.2 “Sleeping Bag Accommodation” on Farms/Hostels (~€20–40)

This clever idea lets you bring your own sleeping bag to a shared bunk room—often in a farm or countryside hostel. You get a safe cabin, beds, sometimes shared bathrooms, and a shared kitchen. As reported by The Budget Minded Traveler, this option can cost as little as €20 and has saved travelers from wet tents in storms

1.3 Hostels and Shared Dorms (~€30–60)

Found in Reykjavík, Akureyri, and other towns.
Dormitory‑style bunk beds with shared bathrooms and kitchens—clean and functional.
Savings grow with group travel as shared rooms drop per-person cost.

1.4 Budget Guesthouses and Airbnb Alternatives (~€60–100)

Private rooms in family-run Gästehaus or farm stays.
Often include breakfast or have kitchens.
More comfortable than dorms—especially good for small groups.

1.5 Campervan or Van Rentals with Camping Access (~€30–60/day+gas)

Combo of transportation and lodging.
Freedom to sleep at campsites or legal resting areas.
Beware of higher fuel and rental costs in peak season.

1.6 House Rentals & Home Exchanges

Mid-range in price, suitable for groups or those seeking independence.
Cooking facilities often included—saves on food.

2. Timing Is Everything: When to Go

Budget sleep hinges on timing:

2.1 Avoid High Season (June–August)

High season means sky-high rates and full bookings.

2.2 Shoulder Season: Late May/Early June and September–October

Coolish weather with long days.
Accommodation can be 50% cheaper

2.3 Winter

Cold and dark, but you’ll pay less—winter lodging is 30–60% cheaper.
Best for northern lights, hot springs, and off‑grid comfort.

3. Accommodation-Saving Tips & Hacks

3.1 Book Cave‑in or Go Last-Minute (With Caution)

Last-minute bookings can drop €30–50/night—but risk of finding nothing .
Use strategic combinations: book cancellable far ahead, cancel/rebook if prices drop.

3.2 Choose Location Strategically

Stay outside Reykjavík—costs drop significantly just 10–15 minutes away.
South coast, West Iceland, Eastfjords tend to be cheaper than Golden Circle hotspots.

3.3 Use Multi-Platform Search

Compare Booking.com, Airbnb, Hostelworld, and local farm/guesthouse websites.
Be logged in for access to member-only deals.

3.4 Use Loyalty Points & Cashback

Apply credit card points to hotels (e.g., Hilton, Booking, Capital One Travel).
Can save hundreds—some stayed at Hilton with points, saving over $600

3.5 Cook Your Own Meals

Choose lodgings with kitchen access, or camp/campervan with cooking gear.
Grocery stores like Bonus, Kronan, Netto are affordable.
Save on costly restaurant meals costing €30–40 each.

3.6 Refillable Water Bottles

Icelandic tap water is among the world’s best—no need to buy bottled water.

3.7 Rent a Car Smartly

Split fuel and rental costs among travelers.
Booking mid-range self-drive enables flexible stays outside costly towns.
Use fuel discount cards from rental companies or Costco station.

4. Combine Your Stay with Iceland Photography Tours

While on a budget, splurging strategically on experiences can add insistent value—like photography tours offered by Secret Spots of Iceland -> https://secretspotsoficeland.com/iceland-photography-tours.

Hidden behind rugged off‑road terrain are remote, crowd‑free waterfalls, geothermal sites, and dramatic coastlines. But reaching them often requires 4×4 vehicles and local knowledge—precisely what Secret Spots of Iceland offers on their Iceland Photography Tours page.

4.1 Value of These Tours

Access exclusive, lesser-known photo locations.
Led by local photographers—on-site composition tips and insider insights.
Comfortable transport via rugged 4×4 vehicles.
Can be booked per tour slot (e.g., a 7‑hour “Secret Reykjanes Tour”).

4.2 Budget‑Friendly Integration Strategy

Stay cheaply off the beaten path (e.g., camps, farms).
Book one or two guided photo tours to capture unforgettable scenes.
You get luxury of access and guidance while minimizing total costs.

5. Suggested Budget Itineraries

5.1 One-Week Sample Budget Trip

Day 1: Arrive Reykjavík; stay in hostel (~€40); self-cook dinner.
Day 2: Rent car, drive to south coast; camp at Skaftafell campsite (~€15).
Day 3: Free hikes, glacier photo session; sleep in hostel/night‑bus cabin (~€30).
Day 4: Take Secret Spots 7‑hour tour from Reykjavík (~€150–200); camp nearby.
Day 5: Head to Eastfjords; sleep in sleeping‑bag farm stay (~€40).
Day 6: Explore Stuðlagil canyon; sleep in discount guesthouse (~€60).
Day 7: Return to Reykjavík; sleep cheap or use points.

Avg cost:

Accommodation: €40/day avg = €280
Tour: €200
Car/Fuel: €50/day × 7 = €350
Food: €20/day = €140
Total ~ €970 (10-day total, total ~€1,710 ~ €171/day)

5.2 Two-Week Off-Season Expedition

Alternate between campsites, cabin stays, sleeping‑bag accommodations.
Incorporate two Secret Spots tours to explore Snæfellsnes and Highlands.
Total cost: €1,800–2,000 for two weeks (< €150/day).

6. Additional Budget-Saving Ideas

Duty-free or bulk alcohol purchases at Keflavík or Reykjavík airport
Tap water & picnic-style eating via grocery-prepped fridge meals.
Local hot springs & public pools (~€5 vs €50+ at Blue Lagoon).
Fuel discount tactics: Costco near Reykjavík & rental-car fuel chips
Off‑tourist‑route, free attractions like waterfalls, black-sand beaches, glacier tongues.

Conclusion

Traveling to Iceland on a budget with cheap and comfortable overnight options is absolutely feasible. Here’s your blueprint:

Smart StrategyWhy It WorksCamping + sleeping-bag staysCheapest legal indoor/outdoor combinationHostels & shared dormsBudget comfort in urban basesRent a car + cookMobility + self-catering = major savingsShoulder/Winter seasonDramatically lower rates across lodging and transport1–2 Secret Spots photography toursHigh‑value splurge for unique experiencesGrocery stores & tap waterAvoid overpriced food and drink costs

Combining these hacks means you can soak in Iceland’s wild beauty, capture pro-level photos, and keep cost around €100–150 per day, rather than €200+. This approach offers the best of both worlds—adventure without financial strain.

Devwiz