Reykjavik on a Budget

James Taylor
8. May 2023 ∼ 8 min. read

How to Explore Reykjavik Without Breaking the Bank

Reykjavik, the capital city of Iceland, is a popular tourist destination known for its stunning natural landscapes, unique culture, and vibrant nightlife. However, it is also known for being an expensive city to visit. While it's true that this amazing city can be costly, it's also possible to visit Reykjavik on a budget with some planning and tips.

If you're looking for ways to make your Reykjavik trip more affordable, this guide will provide you with both of these things – and more. From finding budget-friendly accommodation (if you’re not sleeping in your campervan) to discovering free and low-cost activities, we’re going to show you that visiting Reykjavik on a budget is easier than you think. 

So if you're looking to experience all that Reykjavik has to offer without breaking the bank, read on for our top tips on visiting Reykjavik on a budget.

Planning Your Trip

We’ll begin with a few tips for your planning stages. If you’re on our website, that probably means that you’re looking at renting/have already rented a campervan. That’s a great first step to helping you save money on a trip to Iceland. 

For Reykjavik, your next step should be to look at accommodation. 

Accommodation: Of course, the easiest way to save money on accommodation in Reykjavik is to simply sleep in the campervan one more night. The Reykjavik Campsite is only 15–20 minutes on foot from downtown Reykjavik, meaning you’ll be able to park your camper and enjoy the sights of downtown Reykjavik. 

If not, there are also several hostels to consider, all within the downtown area. If you’re looking for a private room rather than a hostel, there are also many guesthouses available in the city. More information is in the following section. 

Timing: Another thing to consider when traveling on a budget is the time of year you’re choosing to go. Peak season, from June to August, is the most popular time to visit Iceland – and the most expensive. 

We love the shoulder season, from April to May or September to October. Not only are the prices better across Reykjavik, but there’s also a chance to see the northern lights above the city. For a budget trip to Reykjavik, this is the best time to go. Although winter is even cheaper, you might be limited to what you can do during that time. 

Transportation: You might think you have to consider transportation costs when planning a budget trip to Reykjavik. But Reykjavik is a compact and walkable city, as long as you’re staying near the downtown area.  

Food and Drinks: Cooking for yourself with supplies from the supermarket is always going to be the most affordable way to eat not just in Reykjavik, but anywhere (another reason why keeping your camper an extra night might be worth it). But it would be a shame not to eat out at least once during your stay – below, we’ve also rounded up some budget restaurants in Reykjavik for you to consider. 

Tap water in Iceland is also some of the purest in the world, so you don’t have to buy bottled water (hint: bring a reusable water bottle!). We’ll go into some budget-friendly Reykjavik restaurants below. But first…

Budget-Friendly Accommodation Options in Reykjavik

If you’re staying in Reykjavik for a night or two without a campervan, accommodation will be one of the biggest expenses. There are of course budget-friendly options in the city, but in general, prices remain quite high. Here are some of the best options for budget-conscious travelers:

Hostels 

Reykjavik has plenty of hostels that offer affordable accommodations for budget travelers. Hostels tend to be the best option for campervan travelers. 

Some of the most popular hostels in Reykjavik include Kex Hostel, Loft Hostel, and Reykjavik Downtown HI Hostel.

Guesthouses 

Guesthouses are another great option for budget travelers. They offer private rooms at a lower price point than hotels. Some of the most popular guesthouses in Reykjavik include Aurora Guesthouse, Galtafell, and Guesthouse Sunna.

Food and Drink: Eating Out in Reykjavik on a Budget

Food and drink can be expensive in Reykjavik, but there are ways to save money and still enjoy the local cuisine. If you’ve had enough of the camping food, here are some tips for budget-friendly dining in Reykjavik:

• Eat Street Food: Street food is an excellent option for budget travelers in Reykjavik. You can find delicious and affordable food options, including hot dogs, fish and chips, and soup, at local food trucks and stalls. The most popular street food area in Reykjavik is the Old Harbor area.
• Happy Hour Deals: Reykjavik's bars and restaurants often offer happy hour deals, where you can enjoy discounted drinks and food. These deals usually take place in the early evening, so be sure to check out the local bars and restaurants to see what deals they offer.
• Bring Your Own Alcohol: Alcohol can be expensive in Reykjavik, but you can save money by bringing your own. Another option is to purchase your alcohol at the duty-free shop at the airport before picking up your luggage. Here, you’ll find massive discounts on price compared to what’s available in the country. 
• Water: As mentioned earlier, Icelandic tap water is some of the purest in the world, so there's no need to spend money on bottled water. Bring a refillable water bottle with you and fill it up anywhere you like. 

The Best Budget Restaurants in Reykjavik

Icelandic Street Food

This relatively new restaurant in Reykjavik has exploded in popularity thanks to their amazing budget-friendly fare. At this restaurant you can enjoy some delicious Icelandic soups and get free refills and complementary waffles. Not bad at all!

Noodle Station

Simple yet delicious, Noodle Station is a great choice if you’re craving a bowl of Thai noodles. The premise is simple: choose either vegetable, chicken, or beef, and either spicy or mild. Kick back and enjoy, perhaps counting the krona you saved on your meal. 

Bæjarins Beztu Pylsur

Reykjavik’s famous hot dog stand, where one hot dog will set you back less than 500 krona. 

Mandi 

A Reykjavik institution, Mandi is famous in the capital for their delicious kebabs. A favorite with the after dark crowd, this place will be jam-packed when everyone is leaving the bars to go home. 

Nonnabitti

Another famous late-night spot for budget food, Nonnabitti does fantastic subs with all kinds of different ingredients. Again, open late.

Activities and Sightseeing

Reykjavik has plenty of free and low-cost activities and sights for budget-conscious travelers. Here are some of the best options for exploring the city without spending a lot of money.

The Best Free and Cheap Things to do in Reykjavik

Admire Reykjavik’s Famous Landmarks

The best thing about Reykjavik is that most of the city’s main attractions are already free. Hallgrímskirkja, Harpa Concert Hall, the Tjornin Pond, the Sun Voyager Austurvöllur Square and the Parliament Building – all of these are completely free to view. The only thing that you can expect to pay for is if you feel like taking the lift to the top of Hallgrímskirkja for views over the city. 

Join a Walking Tour

Walking tours of Reykjavik are one of the easiest – and most cost effective – ways to get to know Iceland’s capital. Your local guide will have a near-endless amount of knowledge about Reykjavik’s history, the best sights, and plenty of insider recommendations. Alternatively, you can explore the city on your own, wandering between the major sights quite easily thanks to Reykjavik’s compact size.

Visit a Museum or a Gallery

A lot of the museums and galleries in Reykjavik have very low admission fees, letting you learn about the history, culture, art, and natural environment of Iceland. Some of the most popular options include the National Museum of Iceland, the Wonders of Iceland exhibit inside the Perlan, Reykjavik Art Museum, and the Icelandic Phallological Museum.

Enjoy the Natural Landscapes

Reykjavik is surrounded by stunning natural landscapes, and there are several outdoor activities that you can enjoy for free or at a low cost. A beautiful forest surrounds the Perlan, while nearby, the city’s geothermal beach makes for another option to enjoy some time outside. From here, a path heads in either direction; follow it and you will eventually make it all the way out to the Seltjanarnes Peninsula, where the Grótta Lighthouse sits at the tip.