Is Iceland expensive? Our top tips for travelling Reykjavik on a budget

If you’re thinking of travelling to Reykjavik, you won’t be disappointed. Iceland is known for breath-taking landscapes, unique culture, and friendly locals.

But is Iceland expensive? It certainly does have a reputation for being pricey, but we're here to show you how to explore the capital Reykjavik and the wider country on a budget.

From cheap accommodation in Reykjavik to budget-friendly dining options and free attractions, this guide will help you make the most of your trip without breaking the bank.

Is Reykjavik expensive?

Reykjavik is generally considered an expensive city, compared with other European destinations. But with careful planning and budget-conscious choices, you can manage your Icelandic currency without compromising on the experience.

It always helps to start by understanding the exchange rate of British pounds to Icelandic krona.

Transport in Reykjavik

So, is it expensive to travel around Reykjavik? The answer is that it can be fairly cheap, especially if you explore on foot and by bus.

There’s no Metro system in Reykjavik, so the cheapest way to get around and see the sights is to walk or travel by bus.

It’s a fairly small city and most popular attractions and tourist areas are within walking distance of each other. Exploring on foot is also a great way to explore Reykjavik’s unique charm—as long as you dress for the weather!

Buses

Iceland has an extensive bus network connecting its towns and cities. A single bus ticket in Reykjavik ranges from 350 to 600 Icelandic krona or (up to £3.50), while intercity fares cost from 1,500 to 5,000 krona (up to £30), depending on the distance.

Taxis

Taxis in Iceland are a more expensive option than other means of transportation. The base fare for a taxi ride is typically around 730 ISK (£4.40), and the cost per kilometre is around 341 ISK (£2).

Trains

Iceland doesn’t have a comprehensive train network, so this isn’t an option for travellers.

Car hire

Renting a car is a popular option to explore Iceland’s scenic landscapes. Rental prices depend on the type of car and the season. Additional charges such as insurance, mileage, and fuel costs usually apply.

How much are flights to Reykjavik?

There are lots of options for flights to Reykjavik, with many low-cost airlines operating direct services. Airlines include easyJet, Jet2, TUI, Icelandair, Wizz Air, and British Airways.

Prices can start from as little as £34 in quieter months—generally November to January.

The price of accommodation in Reykjavik

Accommodation can be costly in Reykjavik, but you can find the most budget friendly options by booking ahead.

You’ll often find cheap accommodation in Reykjavik on the outskirts of the city—but remember to allow for bus or taxi fares to take you into the city centre.

Hotels

Hotel costs vary depending on the star rating and board basis. A five-star hotel could cost more than £200 per night, but typically you can expect a standard hotel to be over £100 per night.

Apartments

There are plenty of holiday apartments available in Reykjavik. A room in a private house is usually the cheapest option, while an exclusive use, private property will be more expensive.

Hostels

Hostels provide cheap, no-frills accommodation where you may share a dormitory with other travellers. You can often book online to make sure you have a space.

Camping

There are campsites in and around Reykjavik where you can pitch a tent, but this is only recommended during the summer months. You could also hire a campervan, but this is less budget- friendly.

What to eat in Reykjavik

Icelandic cuisine offers a unique culinary experience. Its dishes are influenced by the country's natural resources and traditions. Foods you can expect to find in Iceland include:

• Seafood: Try dishes like Icelandic salmon, cod, haddock, langoustine (Icelandic lobster), and harðfiskur (dried fish).
• Lamb: Icelandic lamb is well renowned for being tender and succulent. Try traditional dishes like lamb soup or hearty stews.
• Skyr: Skyr is a traditional Icelandic dairy product, like yoghurt but with a thicker, creamier consistency. It’s delicious with berries, honey, or granola.
• Pylsur: Pylsur, or Icelandic hot dogs, are a popular street food. Made from a blend of pork, beef, and lamb, they’re served with the usual ketchup, mustard and fried onions.
• Rúgbrauð: Rúgbrauð is a traditional Icelandic rye bread—dense, dark, and slightly sweet. It’s often baked in geothermal ovens.

Food prices in Reykjavik

The cost of a meal in a restaurant in Reykjavik will vary depending on where you go and what you order.

A few options if you’re looking for cheap places to eat in Reykjavik include:

• Lunch specials: Many restaurants in Reykjavik offer lunch specials or set menus at a discounted price compared to dinner menus.
• Local markets: Visit the Reykjavik Flea Market or the Kolaportið Market, where you can find a variety of food stalls with reasonable prices.
• Grab a hot dog: Pylsur is a popular and affordable food option. You'll find hot dog stands all over the city.
• Home cooking: If you’re staying in accommodation with cooking facilities, prepare some meals at home.
• Happy hour specials: Watch out for happy hour specials at bars and restaurants, where you can enjoy discounted drinks and sometimes meals.

Free things to do in Reykjavik

A great benefit of visiting Reykjavik is that there are many free attractions and activities on offer, such as:

Hallgrímskirkja Church

One of Reykjavik's most recognisable landmarks with stunning views from the church's observation deck. There is an admission fee to enter the tower.

Harpa Concert Hall

Take a leisurely stroll around this architectural beauty, which often hosts free exhibitions, events, and live music performances.

Reykjavik City Hall

Located by Tjörnin Lake, the City Hall houses a free exhibition on Reykjavik's culture.

Perlan Museum

While there’s an admission fee for exhibitions and the observation deck, the outdoor areas of Perlan Museum are free, offering panoramic views.

Reykjavik street art

The city has a vibrant street art scene that’s completely free to explore.

Free walking tour

Join a free walking tour of Reykjavik, led by knowledgeable local guides. These tours operate on a tip-only basis.

City parks and gardens

Reykjavik boasts beautiful parks and gardens like Klambratún Park, Austurvöllur Square, and the Botanical Gardens.

Árbæjarsafn Open-Air Museum

Located just outside the city centre, this open-air museum showcases traditional Icelandic architecture and history. Admission is free.

Get ready for your trip and order your Icelandic krona

Feeling excited about your trip? Ordering your Icelandic currency ahead of your travels will give you access to the best exchange rates.

Purchase your Icelandic krona by ordering online now, or you might also like to choose a Travelex Money Card, powered by Mastercard®. Load the card with your travel money, then use it across Iceland wherever Mastercard prepaid is accepted.