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Reykjavik on a Budget: Exploring Iceland’s Capital Without Breaking the Bank

Iceland is known to be among the priciest in Europe and many people are looking for ways to save some bucks while still enjoying the best that the country has to offer.

Activities & Tours

There are various activities in Reykjavík that you can do without breaking the bank and day tours departing from Reykjavík. Day tours include The Golden Circle & Friðheimar Greenhouse, South Shore Adventure, Northern Lights by Boat and Hvammsvík Natural Hot Springs. These tours all cost below 100 EUR/USD.

The Golden Circle & Combination Tours

The Golden Circle tours are relatively similar, the main difference between them is whether they are done as day tours or afternoon tours. Some of the tours will offer additional stops, such as the popular Friðheimar Greenhouse, which has become a popular destination in recent years.

Golden Circle Classic (guided in 10 languages) is an 8-hour tour on a new bus, equipped with WiFi-connected computer tablets for each guest, providing relevant information along the journey and a GPS-synced audio guide with a choice between 10 languages.

The Golden Circle & Friðheimar Greenhouse starts with a visit to Friðheimar greenhouse where you will learn about the ways to manage pests in biological ways and how to grow tasty tomatoes in an eco-friendly manner, using geothermal energy. Next stop is Geysir geothermal area, “the golden waterfall” Gullfoss and last but not least Thingvellir National Park.

Gullfoss - Golden Circle by Jeep & Snowmobile (Pearl Tour)

Activities Within Reykjavík

The public swimming pools in Iceland were last year proposed as a UNESCO Intangible Cultural Heritage by the Minister of Culture. We are waiting to see whether UNESCO approves of the proposal, but geothermal swimming pools can be found in most towns in the country and are places where the people of Iceland come together for relaxation, exercise and social interaction. Author, Hallgrímur Helgason, labelled the swimming pools as “our town squares”, comparing them to popular public gathering places on mainland Europe. Most people only go there for relaxing in the hot tubs (and steam baths) though and not for swimming. You can expect a refreshing feeling during and after visiting the hot tub in Iceland, especially on cold winter days.

With the The Reykjavík City Card (24, 48 or 72 hours), you can access all the public pools of Reykjavík and enjoy unlimited travel by bus with the Reykjavík City Buses within the capital area and a great selection of museums and galleries.

Reykjavik also has a thriving music scene. You could hit up a local bar for happy hour and enjoy live music acts ranging from traditional Icelandic folk to indie rock.

Another option is browsing the Flea Market Kolaportið, a treasure trove of unique finds, from vintage clothing and Icelandic handicrafts to local treats. It’s a great place to snag souvenirs and experience the local vibe.

Many people associate puffins with Iceland and this is represented in many souvenirs, that you will see for example in shops downtown Reykjavík. The biggest puffin colony is in the Westman Islands and by Vík, in the island Grímsey in the North, in West Iceland (Breiðafjörður) and in the Westfjords. But puffin colonies are also closer to Reykjavík, e.g. in the islands just around the capital, e.g. Lundey (meaning “Puffin Island”). Reykjavík Premium Puffin Tour leaves from the Old Harbour to head out to Faxaflói Bay to observe puffins.

Hop On – Hop Off – City Sightseeing (24 or 48 hours) is an option to explore Reykjavík at your leisure. Stops include Perlan Museum, The Lava Show and Whales of Iceland.

The Icelandic Lava Show in Reykjavík

Lava Show Reykjavík is your chance to see molten lava up close, see it flowing, hear it sizzling and feel the incredible heat.

FlyOver Iceland is in the Grandi harbour area like the Lava Show and Whales of Iceland. It is an immersive flight experience, taking you on a journey across Iceland, seeing its spectacular nature while feeling wind, mist and scents of e.g. newly cut grass.

Perlan – Wonders of Iceland is a chance to see, hear and feel the power of volcanoes, earthquakes and geothermal energy.

Food

Food is expensive in Iceland as most of it is imported and due to little competition on the market. The groceries market is largely dominated by budget supermarkets Bónus and Krónan, but Costco opened a branch in Iceland in 2017, and challenged the other two strongly for a while in the beginning in the capital area but the market soon stabilized again after the initial hype around Costco faded out. For more information about grocery stores in Iceland, read our article from 2022. We have also covered food prices in Iceland in detail and what you can expect to pay for meals in restaurants.

There are a few food options worth mentioning, first the Bæjarins Beztu hot dog stand downtown, which has become like a quick cultural experience as well. “Ein með öllu” (meaning “One with everything”) is a solid choice where “everything” refers to ketchup, mustard, remoulade, fried onions and raw onions.

Another option that some tourists have mentioned as a convenient option on the road and tasty choice are the long sandwiches from the supermarket with e.g. ham, eggs and pita sauce or roast beef. The most widely available brands are Sómi, Júmbó and Dagný & Co.

A few years ago, Chickpea opened downtown Reykjavík, a vegetarian fast-food place. They brought a new taste to town and became an instant hit. The menu is simple, four types of sandwiches and four types of salads in addition to a course of the week. A solid choice is wrap number two in flatbread, containing beetroot falafel with hummus, halloumi, greens, adjika, pickled onions and mango aioli. The price of the wraps when this is written is 2390 ISK.

Another simple budget food option is soup of the day from Bakarameistarinn (bakery chain), which costs 1535 ISK when this is written and is served with a slice of bread and butter. It will rotate between mushroom, asparagus, cauliflower, Mexican tomato and Thai coconut. If you are looking for a classic Icelandic soup with more ingredients, you can get lamb meat soup at Café Loki for 4600 ISK.

You can also join a food tour in the city to get a taste of some traditional Icelandic food.

Accommodation

In terms of accommodation, the main piece of advice for getting a good price is coming outside the peak season in summer, e.g. in spring or autumn or during the low season in winter. Of course, you might be sacrificing something in terms of weather.

Staying in the countryside may also cost less besides giving the option to see different parts of the country. The majority of tourists in Iceland have been staying in the capital and mainly travelling close to the capital and in the South Coast. But the most beautiful parts of the country for me are further from the capital, e.g. in the North (Ásbyrgi, Mývatn and Dimmuborgir, Húsavík and the canyon Drekagil), East (Borgarfjörður Eystri, Hallormsstaður and the canyon Stuðlagil), not to forget the Westman Islands off the South Coast.

Dimmuborgir

Transport

Renting a car gives you flexibility to go where you want at your own pace. The public bus system covers the capital area and the countryside. In the capital area and many towns around the country, you can rent e-scooters from Hopp or ZOLO. In many cases they are a more convenient way to get around than the buses due to flexibility, not being restricted by timetables and fixed routes. Downtown Reykjavík, it is also possible to rent a bike.

To get to and from the airport if you are not renting a car, the most economical option is taking a public bus (route 55) to the capital area. The bus stop is located in a 10-15 minutes’ walk (800 m) from the terminal. The bus runs from KEF Airport 12 times a day (see timetable). Private buses are more convenient and drive more frequently from the airport.

The most convenient option is a taxi but it is much more expensive than the other options. There is no Uber, Lyft or Bolt in Iceland meaning people mostly rely on local taxi companies. However, there is also a local app similar to Uber, called Hopp (originally only for renting e-scooters) where you can book a lift. The biggest taxi company is called Hreyfill and they offer airport transfer for 20,000 ISK (132 EUR/141 USD), four to five times more expensive than a private bus transfer.

If you still find it all just too expensive, you might be interested in our article on Free Things to Do in Reykjavík.

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