How to holiday in Reykjavik for less than €400

As I land in one of the priciest cities in the world – reportedly 21 per cent more expensive than New York – I fail at the first hurdle. Having set myself the challenge of three days in Reykjavik on a tight budget, I somehow miss the duty free and leave the airport empty-handed. It’s the number-one rule when travelling to Iceland – even the pilots buy their alcohol for duty-free prices. So, even with this initial faux pas, is it possible to spend time in Reykjavik without breaking the bank?

I try to skimp on travel from the airport by using local buses but the changes sound complicated and the airport bus (Gray Line or Skybus) promises to get me to my accommodation within the hour (2900 ISK – approximately €23). I opt for convenience and as soon as I see the alien landscape and sea shimmering on the horizon, I relax and get some recommendations from the driver. The transfer is fast, efficient and well-worth the price.

Although I vowed I would never stay in a hostel, it's the best option for solo travellers on a budget. I try a new alternative; Galaxy Pod Hostel (€70 per night via Booking. com) on Laugavegur, a main street of shops and restaurants leading into the city. My sleeping quarters are a spaceship-like pod in a shared room (female only) with a locker, mirror, lighting options, air conditioning, sockets and a door for privacy. It turns out to be very comfortable and reasonably soundproofed. If you don't fancy a hostel, there are AirBnB options at about the €100 mark; any cheaper and they're probably outside the city so less convenient for exploring.

Sweeping coastline

Daytime activities are easy to find for little or no cost. Roughly the size of Galway, Reykjavik is best explored on foot, with a sweeping coastline to help you keep your bearings. The architecture is functional and colourful, and the atmosphere welcoming. The old harbour, where two of the biggest industries in the country moor opposite each other – tourist whale-watching boats and whale-hunting ships (marked by a red H) – is a real highlight. Awash with ticket offices for boat trips, bike and segway tours – worth the splurge according to the customers that I spoke to – it’s a pleasant spot to eat, relax and watch the harbour activity.

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A trip to the iconic Hallgrims Church is another must. Designed to resemble a geyser, it overlooks the city like a sentinel. It also promises a fantastic view from the tower via the lift (900 ISK/€7), but you can avoid the queues and cost by walking to The Pearl observation platform instead. Set in woodland, with a simulated geyser and impressive 360-degree views, The Pearl also offers a charming coffee shop under the glinting glass dome. Just beyond, there is also a naturally heated geothermal beach with temperate waters perfect for swimming. And for greenery, stroll around the pond, an oasis in the heart of the city with wild meadows, large grassy fields, children’s play areas and BBQ facilities.

You can learn about Icelandic culture for free through walking tours (I used freewalkingtours.is) and by visiting the photography museum. Other museums have an entry fee, but purchasing a Reykjavik City card is a great way to save. At just 3700 ISK (€29) for 24 hours, with 48 (4900 ISK/€40) and 72 (5900 ISK/€47) hour options also, the card provides access to museums and galleries, city transport, geothermal swimming pools, as well as offering discounts. You even state what time you want the card to activate. As most museums open at 10am, I began mine at noon, visiting five museums over two days as well as having a 9pm swim in Laugardaular’s heated 50m pool, followed by several hot tub soaks. It was so good, I returned at 6.30am the next day.

Affordable options

Food posed the biggest challenge, but there are affordable options. There are plenty of great picnic spots, so load up at Bonus (the cheapest supermarket) and head outdoors; my favourite spots were the pond and the sculpture garden near Hallgrims church. The Noodle Station is famed for its big portions (from 920 ISK/€7) and The Sea Baron has mouth-watering lobster soup and bread (1300 ISK/€10.50) and fresh fish skewers (from 1200 ISK/€9.70). Meanwhile, the famous Icelandic Fish and Chips near the harbour does incredible suppers in cones (1990 ISK/€16) or a more expensive, yet reasonable menu in its restaurant.

Happy hours kick off in the early evening, so it’s the best time to relax with an Icelandic beer or two. On Austurstraeti street, there are several lively bars with outdoor tables and happy hours from 5pm until 7pm and you can then move on to the old harbour, where offers stretch until 9pm. Whatever season you visit, nighttime walks along the shoreline are a delight with many photo opportunities in the midnight sun or under the entrancing Northern Lights. Many venues such as Kex hostel offer free live music, while bars like Kaffibarrin allow locals and visitors alike to party till the early hours. The emphasis is on dancing rather than drinking so it can be both fun and economical.

My trip ends with a cool Einstock white ale overlooking the pristine harbour, before hopping back on the Greyline bus to catch my flight. As I calculate my spending, I discover that I ate, drank and slept for less than €350. I’d seen much more than originally expected and got a sense of the history, art and culture without feeling like I was budgeting. A win-win and an extra €50 left over towards a return visit.

ICELANDIC ADVICE

Must see:

The local swimming pools with hot pots, the natural geothermal beach and views from The Pearl

Top moneysaver:

Drink the tap water. It’s direct from springs, so there’s no need to buy.

Best app:

Use Appy Hour to locate the best and closest drinks deals in the bars.

Highlight:

Geothermal swimming pools – many open from 6.30am until 10pm.

Getting around:

You’ll see more on foot but local buses are included and easy to use if you purchase a Reykjavik City Card.

Food:

For delicious fresh seafood, try The Sea Baron in the old harbour.

Alcohol:

Stop at the duty free or seek out the government liquor stores; despite rumours, you can get a bottle of wine starting at €13.