Despite Iceland’s famous bankruptcy and ensuing currency devaluation, it’s still a very expensive place for Americans to visit. For example, a private, ensuite room in a hostel can cost $150 (with rooms in more luxurious hotels going for double or triple that price). Restaurant entrées typically cost $30-$40, and a cocktail that costs less than $12-$15 is rare.
The good news is that most of what makes Reykjavik so appealing is the free stuff: the quirky culture and friendly locals, the wild nightlife scene, and the amazing landscape that surrounds the city. For everything else, there are ways to save without sacrificing the experience.
The number one way to save money on a hotel in Reykjavik is to visit off-season (October to mid-May) when hotel rates drop by 30-40 percent. If you’re planning to go in high season, get the most for your money by picking a hotel that offers either breakfast or a kitchen where you can save money by cooking your own meals.
Apartment-style rooms at the stylish Room With a View in the city center start at around $170 per night and include free wi-fi, fully equipped kitchens and gorgeous views over the city. Guesthouses are another good, low-cost option in abundance in Reykjavik. Guesthouse Sunna offers spartan but functional single, double, and triple rooms as well as apartments for very reasonable prices. Double rooms with shared bathrooms (one bathroom for every 2-3 rooms) start at around $100 per night and have shared kitchen facilities, free wi-fi, and access to the daily breakfast buffet which is hearty enough to fill you up until after lunchtime.
High Culture for Low Prices
A welcome break from the city’s high prices, many of Reykjavik’s cultural attractions are free or very cheap. The 871 Settlement Museum tells the story of Iceland’s settlement and the lives of the early Vikings who lived in a 1,000-year-old longhouse that was discovered underneath the museum’s site. Admission is around $10. The Culture House Museum displays more of Iceland’s oldest and most treasured artifacts and manuscripts, dating back to 800 AD. Admission costs around $13. Harpa, Reykjavik’s new performing arts venue, is open to the public and offers occasional free concerns and events.
For the best of view of the city, head to the Hallgrímskirkja Church where around $7 gets you access to the viewing tower that looks down upon the brightly colored houses and grey bay of the city. MyReykjavik offers free daily walking tours (in high season). The guides work for tips and will try to sell you on booking one of their other tours, but the tour is well worth it for a few Icelandic krona. A free way to get the lay of the land is to visit City Hall, where there’s a large table-top 3-D map of Iceland on display. Afterwards, head to Tjörnin (Icelandic for “pond”) to watch families feed the resident geese.
The Blue Lagoon is Iceland’s most famous attraction, and it’s well worth the hefty price of admission, but for a cheaper (and more local) look at the Icelandic obsession with swimming, head to a city pool. The largest, Laugardalslaug, is open year-round and is heated to a high temperature so a winter soak is a delightful experience. Admission costs about $5. Or head to the free, geothermally-heated beach at Nautholsvik which is open from mid-May through August.
Eating For Less
A meal for two in an atmospheric restaurant in Reykjavik, including appetizers, entrées, desserts, and one drink each, can easily top $200. To sample some of Reykjavik’s best cuisine on a smaller budget, opt for a fancy lunch instead (Fish Market, which serves Icelandic fare with an Asian twist in a chic setting, slashes prices by about 30 percent during lunch) or opt to share plates or skip the alcohol.
Tapas Barrin offers small plates of both traditional Icelandic dishes and typical Spanish tapas. If you’re interested in trying things like puffin, whale, or fermented shark – or would rather just stick with grilled shrimp and patatas bravas - it’s a great place to sample a few things at lower cost. For more traditional Icelandic fare, Thir Frakkar, a homey restaurant in a residential area, offers Icelandic comfort food like Plokkfiskur – fished mashed with potatoes and topped with a creamy sauce – starting at less than $30.
While certainly not luxurious, the most popular budget meal in Iceland is the hot dog; made of lamb and topped with raw and fried onions, mustard, and a creamy rémoulade, they are extremely addictive and only cost about $3.50 each.
Day Tripping on a Budget
One of the most popular day trips from Reykjavik is the Golden Circle drive, which takes in the trifecta of the country’s most visited natural wonders. Gullfoss is a wide waterfall that plunges into a deep canyon at the bend in a river. At Geysir, the original geyser (for which all are named) no longer erupts, but another nearby named Strokkur does so regularly. And at Thingvellir National Park, you can see the where the world’s first parliament was formed and take a walk through the shifting tectonic plates that help shape Iceland’s otherworldly landscape.
While the landowners at Geysir have instituted a small admission fee, the other sights are free. You can take a guided tour, but it’s just as easy – and often more affordable – to rent a car for the day and drive yourself.