I get a lot of questions about how to do Reykjavík on a budget and in an attempt to answer everyone’s questions at once I decided to write this post. Even though Iceland will never be considered a cheap destination it is possible to save on certain things to be able to splurge on others. You can, for example, save on accommodation to afford to go out to eat at a really nice restaurant or pack lunches to be able to afford that really interesting tour. It’s all a question of how you prioritize things.
So with that in mind, I hope at least someone will find this post useful.
When I travel I usually find that hostels are both affordable and great value for money. I must admit that now that I’m getting older though I’m not a big fan of top bunks and 11 snoring roommates but a few years ago those 11 roommates were just friends you hadn’t met yet. Thankfully most hostels today have a variety of rooms to suit every need and you can pay a little extra for having fewer roommates or, better yet, the room to yourself.
There are a some great hostel options in Reykjavík and here are a few of them in no particular order:
If you are on a very tight budget it might be worth looking into staying at the Reykjavík campsite. With prices from 1700 ISK per person per night it’s probably your cheapest option and the facilities are great. Although it’s not in the city center it’s well connected to the center by bus and it only takes you around 30 minutes to walk.
If you plan to go on any tours out of this city most companies offer pick up at the campsite and if you buy the Flybus Plus ticket you can also get a drop off there from the airport.
If you feel there are not enough showers at the campsite the big and popular Laugardalslaug swimming pool is right next to the campsite. Laugardalur pool is also a much cheaper option than the Blue Lagoon if you want to relax a little after a long day of sightseeing.
I was a little bit torn whether I should include AirBnB in this post. It’s definitely often a more affordable option than hotels for example but that affordability sometimes comes at a price for the locals. Many properties don’t pay their taxes and operate without a licence (which is a loss for the whole of Iceland) and long term tenants are being thrown out of their apartments so they can be rented out to tourists. This is changing the dynamics of many neighborhoods and many locals experience quite a bit of disturbance from people leaving and arriving at all times.
If you don’t care about all that ethical stuff, you don’t believe in taxes (then you should probably also not use the roads or the healthcare system since that’s all paid for with taxes) or you’ve found someone with both licenses and their tax stuff in order this might be something to look into.
The good thing about AirBnB that you can get bigger and more affordable options for families and small groups in particular a little out of the city center and the convenience of having a functional kitchen where you can cook your meals also cuts down on the cost.
Reykjavík Welcome Card
I’ve written a whole post listing five different reasons why you should buy the Reykjavík City card but the bottom line is this: If you are going to visit more than one museum in a day it’s totally worth it plus it gives you access to both the city buses and the city pools. You can even get to Viðey island without paying anything extra..
The I Heart Reykjavík Walking Tour
Even though my walking tour is not a pay-what-you-want tour and you pay for it in advance you get both an introduction to the city’s history but also some insider tips on where to get good coffee, cheap lunches and so forth which people find worth their money. Since the groups are small you will have plenty of opportunity to ask question and if you don’t feel you’re getting enough budget tips all you need to do is ask.
There are others that offer “free” walking tours in Reykjavík (pay-what-you-want is a more honest name for it actually because you should pay them something) but they won’t give you as much practical information about being a visitor in Reykjavík. Or so the people that run them tell me.
Free entrance to city attractions
Unlike many cities I’ve visited you don’t have to pay to visit most attractions in Reykjavík (you know, that are not museums and such). You can visit Hallgrímskirkja, Harpa Music Hall and Perlan observation deck all without paying anything. Just keep in mind though that you have to pay to get to the tower of Hallgrímskirkja church (don’t worry, it’s an amount that won’t break your budget).
You can also check out things like the geothermal beach in Nauthólsvík or the amazing nature all around the city that can be easily reached by city bus.
Reykjavík has a reputation for being very expensive when it comes to eating out and although I know I can’t tell someone that is used to much lower prices that this is not true I don’t completely agree with this statement. If I compare it to other places where I’ve been recently the prices are not much higher in Reykjavík. Especially not when you look at the top restaurants. I will admit that sometimes you do pay a lot for something that is not great but you don’t have to.
Probably the cheapest snack in town that is also pretty good is the hot dogs at Bæjarnis Beztu. It’s not the healthiest meal you’ve ever had but if you don’t care about that it’s pretty yummy. There are also a lot of great places on Skólavörðustígur where you can get a lot for your money like Fish and More, Babalú and Delicatessen where you can get the soup of the day and good bread for under 1000 ISK (the fish soup for 1100 is well worth the extra money too).
The mid-range places (bistros and cafes) often have daily offers like catch of the day for 1500 ISK that are worth looking into too.
Most of the nicer restaurants in town offer lunch offers that are usually pretty good. Often you get food of the same quality as at night for only portion of the price. This may not be of interest to you if you are on a very tight budget but if you want to eat well for less then it’s a good option.
If you want to save money on groceries you should stick to the low cost supermarkets like Bónus, Krónan and Nettó. Bónus is usually the cheapest but the other places often have good offers and may have more selection than Bónus. I wrote a post about all the supermarkets in Iceland a few years ago that, even though it’s a bit old, is still worth checking out.
You can obviously save a lot of money if you stay somewhere where you can cook your own food.
Icelanders find clothing in Iceland very expensive which is why many do most of their shopping abroad. The shops in the malls tend to be cheaper than the ones downtown (Vero Moda, Lindex, Vila and other foreign chains) but if you are into second hand clothing you can find bargains in between.
The best places to search for inexpensive second hand clothing are probably Kolaportið Flea Market, The Red Cross Store on Laugavegur and the Salvation army in Garðastræti. There’s also a second hand market close to Hlemmur where you can often buy clothing by weight.
If you need something warm while you are here it’s worth checking out the Icelandic Handknitting Association for knitted stuff and the Cintamani store in Bankastræti for the outlet in their basement. If you want to check out the chain stores in the mall there are free shuttle buses to both Kringlan and Smáralind that leave the Reykjavík Tourist Information every hour on the hour.
Activities out of the city
Iceland is a difficult country if you are used to using public transportation on your travels. The buses can usually take you from A to B in an affordable way (like if you want to go from Reykjavík to Vík) but they don’t allow for stops along the way to take in all the natural wonders you see. Therefore it’s best to travel around Iceland by car or to use Reykjavík as your hub and take day tours from there. You can of course also take the public bus up to Akureyri for example and use that as your hub for the north and so forth.
Renting a car
I’ve written a few posts about renting a car in Iceland where I address the temptation of renting a rent-a-wreck type vehicle and why it is probably not a good idea. I’m just such a loser when it comes to figuring out how to fix cars that break down that I would not risk my precious holiday time with an unreliable car. Of course if you are willing to take the risk for lower prices (please note though that the prices are not always lower) then of course it’s something you might want to look into.
Car rental can be expensive, especially in the summer, but it’s often still a cheaper option than day tours if there are a few of you traveling together. Another good thing about staying in a hostel is the fact that you can often find fellow travelers that are willing to share the costs of a rental car. The best way to find an affordable rental car is just to do your research but you can often find very competitive prices right here on the blog through my offer from Budget. The prices are often particularly good for short rentals in the off season.
Even though I often recommend that people try to find smaller day tours that give you more personal connection to the guide and your fellow travelers it’s usually cheapest to take the classic bus tours to places like the Golden Circle and the South Shore. I also think that if you just know what you are getting yourself into you won’t be disappointed by the fact that there are 60 other people on the bus and that you can’t necessarily ask the guide all the questions you have all the time. The big buses are a fairly convenient way to travel (these are big companies that have well maintained buses and such) and you don’t have to pay the white of your eye to see our natural wonders.
Traveling in the off-season
Although with the rising number of tourists in Iceland it’s sometimes difficult to see what exactly is the off-season it’s still possible to get good deals on accommodation, in particular, if you are willing to travel outside of the busiest summer months. Prices on car rental also go down and you can often get good package deals through groupon sites and the airlines.
Please note that the prices quoted in this post are based on prices in June 2015 and will not be updated. So by the time you read this post the prices may have changed.