I’ve walked Reykjavik’s main shopping street many times before. There’s not a day that goes by when I visit the city that I don’t end up there somehow. The street, running through the center of the city and often closed off to cars, is lined with restaurants, hostels, cafés, and stores.
But on this, my third visit to Iceland and this city, something felt different. Reykjavik had changed. Though still a cute city filled with bustling cafés, colorful buildings, and a bohemian vibe, but looking up from my phone, I found myself standing in front of that change: a Dunkin’ Donuts, the North American coffee chain. In the year I had been gone, Dunkin’ — as well as Joe and the Juice, numerous burger shops, more Taco Bells, and Subways — had seemed to sprout up along this main drag and around the city.
The mass market had finally come to Iceland.
Though I have no solid proof, in my opinion, this is in response to the demands of the ever growing visitor numbers. Thought crowds have been bursting at the seams for years, to me the chains reflect the growing crowds drawn in by Iceland’s rising fame and cheaper flights to the country thanks to budget airlines like WOW Air and Iceland Air’s seven-day free stopover.
And my Icelandic friends lamented the changes this brought to the country: clogged roads, increased accidents, environmental degradation, and higher prices. The city may be changing, and while there is another blog post on how tourism has changed things, today I want to discuss the thing that will affect you the most: the higher prices.
While Reykjavik has always been expensive, I found it a lot harder to stay on a budget this trip.
Nevertheless, some ways still exist, and today I want to share them:
Cook your own food – Eating out in Iceland is expensive and — like most capital cities — Reykjavik is especially expensive. This is a city where a donut can cost $5, a hamburger can cost $23, a dinner for two with wine can cost $100! While there are a few places I recommend (more on those later), it’s best to avoid eating out much as much as possible if you want to stick to a budget.
Groceries (basic pasta, eggs, skyr (an Icelandic cultured dairy product), rice, chicken, and some veggies) will cost 8,700 ISK ($76 USD) per week. Most hostels, Airbnbs, and even hotels have kitchens that allow you to cook your food. Additionally, many grocery and convenient stores have pre-made sandwiches and salads for around 400 ISK ($3.50 USD).
Drink on a budget – Reykjavik has some of the best nightlife in the world. It goes late into the night, with bars closing at 4 or 5am! Why? Because no one goes out until 1am! In a country where alcoholic drinks cost so much (around 1,200 ISK ($10.50 USD)), people sit at home and get sauced until the last possible second. Hit the happy hours at the bars or hostels and get beer for 600-700 ISK ($5.25-6.15 USD).
Even better than happy hour prices is to purchase your alcohol duty free when you arrive in the country or at the state stores called Vinbudin. You’ll save about 40% off the bar prices.
Couchsurf – Reykjavik has a very active Couchsurfing community. Getting involved with the community is a surefire way to get local insights, meet wonderful people, and save money with a free place to stay. The best way to lower your accommodation costs is to not have to pay for it!
Split an Airbnb home instead of using a hostel – If you’re visiting with friends, I would advise against getting dorm rooms. Hostel dorms cost 3,500-7,500 ISK ($30-65 USD) per person, but you can get entire homes or apartments on Airbnb from 11,500 ISK ($100 USD) per night. If you’re traveling in a group of three or more people, Airbnb is your most affordable choice.
Camp – If you don’t mind staying a bit out of the city center, you can camp at Reykjavik Campsite for 1,900 per night! It’s the cheapest paid option in the city.
Eat at the street stalls – Not into cooking? Stick to the street stalls serving pizza, sandwiches, kebabs, and Iceland’s famous hot dogs that line Ingólfstorg square around the main tourist information center and Lækjartorg (the square near the Grey Line office). You’ll find sandwiches and kebabs for around 1,000 ISK ($8.75 USD) while the hot dogs are 400 ($3.50). Everyone loves the famous Baejarins Beztu Pylsur hot dogs (President Clinton went there); they are worth eating if the line isn’t long.
Eat some soup – If you’re looking for a warm meal to fill your stomach, you can find a few Asian noodle places that offer hearty portions for around 1,000 ISK ($8.75 USD). My favorites are Noodle Station and Krua Thai, a Thai place that just opened up.
Take a free tour – Want to know the history of the city and Iceland but don’t want to pay for the museums? Don’t miss the free walking tour run by Free Walking Tour Reykjavik. It’s really informative and takes you around a lot of downtown. Some other free exhibits: Harpa Concert Hall and the oversized topographical map of Iceland in the City Hall.
Get the city pass -If you plan to see a lot of the sights in the city (and you should), the Reykjavik Pass gets you free entry into all the major attractions, 10% off most tours, and even 10% off a few restaurants. Though a small city, Reykjavik also has some tremendous museums and art galleries (to which the pass gets you discounts into). (I especially love the National Museum. It has an extremely detailed history of the country.) The 48-hour pass is $40 USD but easily pays for itself.
Rideshare outside the city – If you are looking to head out of the city (to visit the Blue Lagoon, Golden Circle, or anywhere else), expect to pay a lot of money for a tour. You could rent a car, but that’s still around $70 a day. The cheapest way to get out of the city and explore is to check for rides on hostel bulletin boards (even if you aren’t staying at one), Couchsurfing, or Samfredi, Iceland’s ridesharing site. They are filled with travelers looking — and giving — rides throughout the country! All you have to do is share costs!
Enjoy the outdoors – Reykjavik is filled with amazing things to see and do for free. If the weather is nice (or at least not terrible, like May-September), walk around. Enjoy the narrow streets and colorful houses, watch the ducks in the big lake in the center of town, hang out in a park, walk the waterfront, walk the long walking and biking path near the airport (it’s stunning and goes through some small beaches, parks, and a residential area, visit Nauthólsvík Beach and its hot spring, or visit the Grotta island lighthouse at the far end of town.
Recommendations
Not sure what to see or do while you are there? Here are some of my favorites:
Attractions: Reykjavík Botanical Gardens, Grotta, City Hall, Hallgrímskirkja, National Gallery of Iceland, National Museum of Iceland, The Penis Museum (yes, it’s a thing and it’s very weird), Reykjavík Art Museum, Árbæjarlaug and Laugardalslaug swimming pools.
Restaurants: Laudromat, Noodle House, Glo, Le Bistro, Grill Market ($$$), Food Cellar, and Krua Thai.
Coffee shops: Kaffihús Vesturbæjar, Rakjavik Roasters, Kaffitár, Kaffibarinn, Café Babalu, and the café in Mál og Menning (which is my favorite).
Bars: Lebowski Bar, Bar Ananas, Kiki, The Dubliner, and Hurra.
Overall, I would budget around $60 – 70 USD per day for the city if you’re paying for your accommodation (a shared Airbnb or hostel), cooking most of your meals, doing most of the free activities, getting the museum pass, and not drinking. If you want see more paid activities, have a few nicer meals and go out to the bars, look to spend between $80-100 USD per day. For those camping, Couchsurfing, cooking, doing the free activities, and minimizing paid experiences, you can get by for $30-40 per day.
Reykjavik isn’t as cheap as it used to be, and there are fewer ways to get by on a budget, thanks to price inflation and a tourist industry catering more to the mid-tier and higher-end market. However, nothing is impossible. With some careful spending — as well as focusing on the free nature attractions in the city — you can easily avoid emptying your wallet before you escape the city and explore the country!
P.S. – Want to meet some cool travelers? We’re hosting a bunch of meet-ups around the U.S. over the next few months! You can find out how to join one of them (they are free) by clicking here! We’re even giving away prizes to attendees!
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