If you’re travelling to Reykjavík, you probably know that it’s one of the most expensive cities for tourists in the world. Understandably, as a lot of items have to be shipped in to the county, food is reasonably expensive. There’s also lots of paid activities to do, and of course accommodation is pricey as well. All of this makes Reykjavík a very intimidating city to visit as a tourist with a limited budget. Because of this, we’ve put together a detailed list of specific ways to visit Reykjavík on a Budget so that it feels less scary for your visit!

Keep in mind that while we’re talking about Reykjavík on a budget, you will still need to plan for much higher expenses than many other destinations. There are ways to spend less, but you will definitely still be spending a lot of money to visit Reykjavík.

In this post:

1. What to do
2. What to eat
3. Where to stay
4. Overview

Depending how long you’re spending in the city, it’s relatively easy to explore Reykjavík on a budget.

If you’ve read any of our other posts, you know our favourite thing to do in any city is just to wander the streets. Walk east along Bankastræti until you get to the famous rainbow street, Skólavörðustígur. Apart from being a great photo opportunity, this street has lots of great shops and restaurants along it. You’ll find some amazing ceramic stores, souvenir stores and shops with beautiful artwork and photographs of Iceland. Of course you’ll also see lots of wool and yarn stores as Iceland is quite famous for their wool.

At the end of this street you’ll see Hallgrimskirkja, the famous 74.5 meter tall church. This modern building has a very distinctive curved spire that no doubt you will have seen in many photos of Reykjavík. Check out their website for exact opening times, but it’s usually open from 9am to 8pm every day. It is free to enter however if you want to go up the tower it costs 1,500ISK or around £9.

From here, head towards the water, checking out more of the local shops, beautiful coloured buildings and street art on the way. Once you’re at the water, you can check out the Höfði Lighthouse and enjoy the amazing view over the mountains across the water. You can wander along the water towards the Harpa Concert Hall and around the harbour to Þúfa. This is an outdoor art installation that is a a little green hill you can climb up and have great views back to Reykjavík.

Over near Þúfa are some great tourist activities that might be worth your time and money while in Reykjavík. There is Whales of Iceland which is a great museum with life size models and interactive exhibits. Right next to it is FlyOver Iceland which is an interactive flying experience over beautiful Icelandic landscapes. This is a ride where you’re suspended with your feet dangling and it uses wind, mist and smells so keep that in mind if you get motion sickness. Lastly, there’s the Lava Show which is a must while in Reykjavík. This hour long show uses real lava that an expert host will tell you about and move around, and it is insanely interesting.

Something else that is a must do in Iceland is to visit the golden circle and the blue lagoon. If you’re short on time, there are some great tours that visit both in one day. Firstly there’s this tour by Nicetravel or this small group tour by Bustravel Iceland. They both pick up in Reykjavík then you get to visit Thingvellir National Park, the Geysir and Gullfoss waterfall. You then head to the blue lagoon and have a couple of hours there to relax. It’s the perfect way to see some of Iceland’s most popular and beautiful parts in one day.

All of these activities can be quite pricey, so we would recommend choosing just one or two that are highest on your list. We personally went to the Blue Lagoon and to the Lava Show, and loved both! We’ve even got a whole blog post on the Blue Lagoon if you’re interested to learn more.

One of the things that will eat into your budget the quickest will be food (pardon the pun). We’ve got some tips to keep this portion of your budget down while exploring Reykjavik on a budget.

For breakfast, we recommend heading to a supermarket. You’ll want to head to the Krónan or the Bónus as these are some of the cheapest supermarkets in the country. Here you can find some Skyr which is a traditional Icelandic dairy product. It’s very similar to yoghurt but is actually technically a sour cheese, is fat free and is packed with protein. It is quite thick and creamy and comes in so many different delicious flavours. Grab one of these and a takeaway spoon for a healthy and cheap breakfast. Of course if you’re dairy free or don’t like yoghurt, supermarkets in Iceland also have packets of pastries and delicious fruit so there’s lots of nice breakfast options.

Another great breakfast option is to find some Icelandic Happy Marriage Cake. This is a traditional cake found in shops and bakeries all around the country. There’s many ideas about where the name came from but some are that it gets better with age like marriage, and that it’s a “marriage” of flavours. The cake is made of a oat base, with a rhubarb jam in the middle, and then an oat crumble on top. It’s sweet, fruity and very filling which makes it a perfect little breakfast treat.

For lunch we came up with a couple of good and cheap options. Firstly there’s the famous Bæjarins Beztu Pylsur hot dog stand. This stand is in the middle of Reykjavík and has been operating here since 1937. As the country has so many sheep, lamb hot dogs are a popular snack in Iceland. You’ll find them all over the country, but the ones at Bæjarins Beztu Pylsur are affordable and delicious. Along with the meat, each one comes with raw onion, crispy onion, American mustard and another sweet mustard sauce. You can easily customise your hot dog though so don’t worry if anything isn’t to your taste. They are around 830 ISK or £5 each.

Another affordable lunch option is to buy a slice or two of Sbarro pizza for around 1000 ISK or £6 each. They’re sold at various places around Reykjavík , but we saw some at the BSI bus terminal and the 10-11 Austurstræti convenience store in the city. Keep your eye out for the pizza symbol and the word “Sbarro” on stores to see where else they sell it.

Lastly, a great affordable lunch option is to head to the famous Brauð & Co. This is an amazing bakery with multiple locations in and around Reykjavík , with two in the main city. They’re famous for their sourdough bread and most importantly, their incredible cinnamon rolls. Grab some delicious things from here, then head to a supermarket to get some meat and cheese to make sandwiches.

Dinner is likely going to be your most expensive meal of the day, and it’s hard to keep it cheap if you’re eating out. We’ve got two options, the first one right in the middle of the city. Right near the famous rainbow street is a restaurant called Bao Bite Noodle Bar. While the prices are still high, we felt the portion was big enough to justify it a little bit. We shared a chicken fried rice between the two of us and it was super delicious!

If you’re spending the evening out at the Lava Show, FlyOver Iceland or the Whales of Iceland Museum, there’s a great place nearby for dinner. Grandi Mathöll is a food court open till 9pm and it has lots of different stalls to eat from. There’s an Indonesian place, a fish and chips place, and Indian place, a Korean place, a pizza place, and more! There’s also lots of seating and a bathroom so is a great option if you’re travelling with people who all want something different.

Of course, if your accommodation has a kitchen, you could also head Krónan or Bónus for some ingredients to make your own dinner. We also brought our own dried pasta from our home in London to save just a bit of extra money.

Probably your biggest expense in Reykjavik will be accommodation. We stayed at two places that we’d really recommend and will hopefully help you visit Reykjavik on a budget.

The first place is right in the middle of the city and is called CityHub Reykjavik. This is a hub style hostel with three styles of hub available. There’s a regular hub which fits two people and has a king sized bed in it. The room is small, with only room for the bed, a small shelf and a little bit of floor space. However if you’re only there to sleep, it is perfect. The rooms are clean, quiet, have Wi-Fi, air con, power points, and you can even control the music and lights over Bluetooth. There’s also a twin bed hub with two single beds, and a movie hub with a big tv on one wall.

For one night in a pod on a weekday in June, we paid 15,600ISK or £90 for the two of us, but it was more expensive on a weekend. For the shared areas, there are gendered bathrooms which are big and clean and have music playing in them. There’s also a communal seating space, a serve yourself bar, a kitchenette and even a hot tub on the roof. The location is great, being right in the middle of the city, so all the main attractions and restaurants are nearby. We really enjoyed our time in this accommodation and really do recommend it for Reykjavík on a budget.

If you’re visiting Reykjavík during June, July or August, we really recommend Student Hotel and Hostel. This is a great and affordable place to stay just outside of the main city. They have some twin and single rooms with shared bathrooms, but most of them have private bathrooms. They all come with towels, bedding, and have access to big and clean shared kitchens. It is important to note though that Wi-Fi is only available in the common areas and not in the rooms. For one night on the weekend in June, we paid 22,000ISK or £125 for the two of us.

As well as the rooms, you’ll also have access to Háma which is the university cafeteria open on weekdays. There’s also the Student Cellar which is a restaurant and bar open every day, and a bookshop open on weekdays. It’s perfectly situated only a 10 minute walk from the BSI bus terminal, a 10 minute walk from the city centre, and a 15 minute walk from the domestic airport. The walk into the city will also take you through the Hljómskálagarðurinn park, and past the Tjörnin lake. It’s a beautiful walk and is definitely worth a visit even if you’re not staying at the Student hotel and hostel.

While Reykajavik may be one of the most expensive tourist cities, that doesn’t mean you can’t enjoy Reykajavik on a budget. The city has some great shops, lovely street art, and of course that famous rainbow street. The Hallgrimskirkja church is a must, and there are some great paid activities to do as well. It’s easy to keep your money down on food by utilising supermarkets, bakeries and cheap hot dogs and pizza slices. When it comes to accommodation, we’ve given you two great options that we stayed at and loved. We hope all these tips have helped you to see Reykajavik on a budget and enjoy your time in this wonderful, unique city!