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Is Iceland expensive? Our top tips for travelling Reykjavik on a budget

If you’re thinking of travelling to Reykjavik, you won’t be disappointed. Iceland is known for breath-taking landscapes, unique culture, and friendly locals.

But is Iceland expensive? It certainly does have a reputation for being pricey, but we're here to show you how to explore the capital Reykjavik and the wider country on a budget.

From cheap accommodation in Reykjavik to budget-friendly dining options and free attractions, this guide will help you make the most of your trip without breaking the bank.

Is Reykjavik expensive?

Reykjavik is generally considered an expensive city, but with careful planning and budget-conscious choices, you can manage the cost without compromising on the experience.

It always helps to start by understanding the exchange rate of pounds to Icelandic krona.

Transport in Reykjavik

So, is Reykjavik expensive for travel? The answer is that it can be fairly cheap, especially if you explore on foot and by bus.

There’s no Metro system in Reykjavik, so the cheapest way to get around is by bus or on foot.

It’s a fairly small city and most popular attractions and tourist areas are within walking distance of each other. Exploring on foot is also a great way to explore Reykjavik’s unique charm - as long as you dress for the weather.

Buses

Iceland has an extensive bus network connecting its towns and cities. A single bus ticket within the city ranges from 350 to 600 Icelandic krona , while intercity fares cost from 1,500 to 5,000 krona, depending on the distance (as of December 2023, according to IntroducingIceland.com).

Taxis

Taxis in Iceland are a more expensive option. The base fare for a taxi ride is typically around 730 ISK, and the cost per kilometre is around 341 ISK (as of December 2023, according to IntroducingIceland.com).

Trains

Iceland does not have a comprehensive train network, so this isn’t an option for travellers.

Car hire

Renting a car is a popular option to explore Iceland’s scenic landscapes. Rental prices depend on the type of car and the season. Additional charges such as insurance, mileage, and fuel costs usually apply.

How much are flights to Reykjavik?

There are lots of options for flights to Reykjavik, with many low-cost airlines operating direct services. Airlines include easyJet, Jet2, TUI, Icelandair, Wizz Air, and British Airways.

Prices start from as little as £34 in quieter months - generally November to January (as of December 2023, according to Skyscanner).

The price of accommodation in Reykjavik

Accommodation can be costly in Reykjavik, so find the most budget friendly options by booking ahead.

You will often find cheap accommodation in Reykjavik on the outskirts of the city but remember to allow for bus or taxi fares to take you into the centre.

Hotels

Hotel costs vary depending on the star rating and board basis. A five-star hotel could cost more than £200 per night, but typically you can expect a standard hotel to be over £100 per night (as of December 2023, according to Budgetyourtrip.com).

Apartments

There are plenty of holiday apartments available in Reykjavik. A room in a private house is usually the cheapest option, while an exclusive use, private property will be more expensive.

Hostels

Hostels provide cheap, no-frills accommodation where you may share a dormitory with other travellers. You can often book online to make sure you have a space.

Camping

There are campsites in and around Reykjavik where you can pitch a tent, but this is only recommended during the summer months. You could also hire a campervan, but this is less budget- friendly.

Food in Reykjavik

Icelandic cuisine offers a unique culinary experience. Its dishes are influenced by the country's natural resources and traditions. Foods you can expect to find in Iceland include:

  • Seafood: Try dishes like Icelandic salmon, cod, haddock, langoustine (Icelandic lobster), and harðfiskur (dried fish).
  • Lamb: Icelandic lamb is well renowned for being tender and succulent. Try traditional dishes like lamb soup or hearty stews.
  • Skyr: Skyr is a traditional Icelandic dairy product, like yoghurt but with a thicker, creamier consistency. It’s delicious with berries, honey, or granola.
  • Pylsur: Pylsur, or Icelandic hot dogs, are a popular street food. Made from a blend of pork, beef, and lamb, they are served with the usual ketchup, mustard and fried onions.
  • Rúgbrauð: Rúgbrauð is a traditional Icelandic rye bread - dense, dark, and slightly sweet. It’s often baked in geothermal ovens.

Food prices in Reykjavik

The cost of a meal in a restaurant in Reykjavik will vary depending on where you go and what you order.

A few options if you’re looking for cheap places to eat in Reykjavik include:

  • Lunch specials: Many restaurants in Reykjavik offer lunch specials or set menus at a discounted price compared to dinner menus.
  • Local markets: Visit the Reykjavik Flea Market or the Kolaportið Market, where you can find a variety of food stalls with reasonable prices.
  • Grab a hot dog: Pylsur is a popular and affordable food option. You'll find hot dog stands all over the city.
  • Home cooking: If you’re staying in accommodation with cooking facilities, prepare some meals at home.
  • Happy hour specials: Watch out for happy hour specials at bars and restaurants, where you can enjoy discounted drinks and sometimes meals.

Free things to do in Reykjavik

A great benefit of visiting Reykjavik is that there are many free attractions and activities on offer, such as:

  • Hallgrímskirkja Church: One of Reykjavik's most recognizable landmarks with stunning views from the church's observation deck. There is an admission fee to enter the tower.
  • Harpa Concert Hall: Take a leisurely stroll around this architectural beauty, which often hosts free exhibitions, events, and live music performances.
  • Reykjavik City Hall: Located by Tjörnin Lake, the City Hall houses a free exhibition on Reykjavik's culture.
  • Perlan Museum: While there is an admission fee for exhibitions and the observation deck, the outdoor areas of Perlan Museum are free, offering panoramic views.
  • Reykjavik Street Art: The city has a vibrant street art scene that’s completely free to explore.
  • Free Walking Tour: Join a free walking tour of Reykjavik, led by knowledgeable local guides. These tours operate on a tip-only basis.
  • City Parks and Gardens: Reykjavik boasts beautiful parks and gardens like Klambratún Park, Austurvöllur Square or the Botanical Gardens.
  • Árbæjarsafn Open-Air Museum: Located just outside the city centre, this open-air museum showcases traditional Icelandic architecture and history. Admission is free.

Order your Icelandic Krona ready for your trip today

Feeling excited about your trip? Get a good deal on your Icelandic krona by ordering online as cash, or on a Travelex Money Card. Read more about money in Iceland in our currency guide.

Or, for more travel inspiration and ideas of what to do on your trip, see our Iceland travel guide. We also have some more general tips about budget travel.