What to Do in Reykjavik on a Budget

Iceland’s capital city is one of the most popular and wallet-wringing destinations in the world; the island nation’s gradual economic recovery after the 2008 financial collapse and its subsequent tourism boom have resulted in soaring prices (and demand) for, well, just about everything.

That said, appreciating Reykjavik doesn’t have to mean weathering a financial crisis of your own. Get the biggest bang for your kronur with moves like these.

Dining and Drinking

If you plan on enjoying adult beverages in Iceland, know that alcohol is extremely heavily taxed: A whopping 94% of the price of a bottle of vodka for example, ends up going to the state. Bear that in mind before you leave Keflavik Airport, where tourists and locals alike stock up on booze at Duty-Free.

Raise a glass at Kolabrautin. When you find yourself in need of a mixologist’s services, pay for scenery as well as a drink. The bar at Kolabrautin — a restaurant on the fourth floor of Harpa, Reykjavik’s show-stopping concert hall and conference center — boasts an outstanding view of the harbor. (Wandering around Harpa without a cocktail is pretty wonderful as well: Architects designed its stunning faces in collaboration with the Icelandic artist Olafur Eliasson.)

Try the catch of the day at Icelandic Fish & Chips. You can pay dearly for seafood from the “Taste of Iceland” menu at a flashy tourist trap...or you can settle in at Icelandic Fish & Chips, where the ever-changing a la carte offerings are simple and spectacular. Don’t miss the crispy fried potatoes paired with “Skyrrones,” the eatery’s proprietary blend of mayonnaise and skyr (a fresh, low-fat Icelandic cheese that tastes like thick yogurt).

Warm yourself with a bowl of soup. Thai native Charin Thaiprasert opened the first Noodle Station in downtown Reykjavik a decade ago, and his grandmother’s secret recipe won locals’ and visitors’ hearts and bellies; there are now four Noodle Stations in Iceland, and outposts have opened in Norway and South Korea. The menu is straightforward (choose noodle soup with beef, chicken or vegetables), deliciously tongue-tingling (literally and figuratively, it’s the “hottest noodle soup joint in town”) and budget-friendly (about $10-$15 per bowl).

Explore Iceland’s first food hall. A short stroll down Laugavegur from The Icelandic Phallological Museum (yes, Iceland has a phallological museum), the city’s former bus hub is now a bustling gourmet court: Hlemmur Matholl’s 10 vendors offer everything from smorrebrod (Danish open-faced sandwiches) to experimental cocktails with foraged ingredients. It’s the perfect place to rub shoulders with locals and get a taste of something new without committing to a full meal.

Taste the “unofficial national food.” Baejarins Beztu Pylsur translates to “the best hot dogs in town,” which undersells this Tryggvagata stand a bit: It’s actually been named the best in Europe (and has been in continuous operation for eight decades). Forking over a few kronur and asking for “eina med ollu” (the works) will earn you a crisp-skinned lamb hot dog with ketchup, sweet mustard, fried onion, raw onion and remoladi (a mayo-relish combination).

Sightseeing and Shopping

Hop a boat to Videy. A 20-minute ferry ride (about $15 round trip) from Reykjavik’s Old Harbor terminates at Videy, a miniscule island with massive significance: Visit Videy House (the first Icelandic building made of stone), wander through 10th-century archaeological remains, hike to Richard Serra’s iconic Afangar (Milestones) and the Imagine Peace Tower Yoko Ono built in memory of John Lennon — and enjoy killer views of Kollafjordur Bay, Reykjavik, and Mount Esja.

Haggle at Kolaportid. Iceland’s only flea market is open every Saturday and Sunday from 11-5, and it is an experience: Vendors from around the country will sell you hand-knitted Icelandic woolen goods, ultra-rare Bjork posters and fermented shark. It’s safe to skip the fermented shark, but it’s worth your while to stop by the food hall for a bag of fresh kleinur (diminutive, deep-fried Icelandic donuts).

Speaking of secondhand goods, dedicated bargain-hunters should also swing by Reykjavik’s four Red Cross thrift stores, which are as well-curated as the for-profit vintage shops...and often considerably less expensive.

Ride to the top of Hallgrimskirkja. Built to resemble the spectacular basalt formations created when molten lava cools, Iceland's oldest church is open to visitors every day of the year. Strolling through its pews and admiring its magnificent pipe organ is free, but the $10 admission to its observation deck is money well spent: Its bird’s-eye view of the city is priceless. When you’ve returned to the street, head next door to the Einar Jonsson Museum's elegant garden for a complimentary stroll through works by Iceland’s first sculptor.

Go birdwatching at Lake Tjornin. Reykjavik’s “downtown lake” began as a lagoon more than a thousand years ago, and it’s actually a series of shallow ponds. It’s also popular with 50 species of water birds and the humans who love them: Tjornin has been called “the biggest bread soup in the world.” Inter-species squabbles have led local authorities to ask visitors to keep their treats to themselves, but the lakeshore is still an Instagram-perfect walk.

Hopscotch through exhibits at Reykjavik Art Museum. With a city-spanning collection that contains about 17,000 works, Reykjavik Art Museum’s galleries and assorted public installations are the beating heart of visual art in Iceland. Admission for adults is about $15, and a single ticket is valid for 24 hours at all three buildings.