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Traveling Expensive European Capitals Inexpensively – Reykjavik, Iceland

This is my second article in a series about traveling expensive European capitals inexpensively. A recent article in Matador ranks the European capital cities from most expensive to cheapest for a tourist. Every European capital ranked from most expensive to cheapest, by Matthew Meltzer ranks 49 capital cities in Europe by average price in four travel expenses: Hotel, meal, beer, taxi.

My initial article showed how I spent two days and nights touring Monaco for about $170 in a city where hotel prices can regularly be over $400 per night.

Loyalty Traveler – Traveling expensive European capitals inexpensively – Monaco

Reykjavik, Iceland #2 Most Expensive European Capital City

Reykjavik, Iceland

Reykjavik, Iceland is listed as the second most expensive capital in Europe in the Matador article. Having stayed in Reykjavik within the past two weeks, I can confirm Reykjavik is expensive, however, I found Reykjavik was not as expensive as anticipated this trip once I really examined the cost of things closely. Aside from the high cost to travel from Keflavik Airport to Reykjavik city at $43 round trip for the bus, the cost of food is manageable if you shop and dine selectively.

The price of alcohol in Reykjavik can be a budget buster. Best way around that is either buy at the airport before you leave for Reykjavik (cheapest), buy at government liquor stores during the limited daytime hours they are open or plan to go to restaurants and bars during happy hour prices, 4-7pm at many places with happy hour discount opportunities available most hours from noon to midnight at different pubs along Laugavegur and Austurstraeti.

I think the four categories for travel expenses shown in Matt Meltzer’s article: hotel, meal, beer and taxi closely mirror the expense categories that concern me most when I plan my budget for travel expenses in Europe.

I expand his category of ‘taxi’ to ‘transportation’. In my travels, transportation usually means public transportation for travel to and from airports and city/regional transportation by bus, train, metro. Generally I get around most cities in Europe simply by walking. That is why my focus is generally getting a city hotel in a central location I want to explore.

  1. Hotel
  2. Meal
  3. Beer
  4. Transportation

Most Expensive European Capitals

  1. Monaco
  2. Reykjavik, Iceland
  3. Dublin, Ireland
  4. Amsterdam, Netherlands
  5. London, UK
  6. Paris, France
  7. Copenhagen, Denmark

Meltzer data from

Reykjavik, Iceland

Hotel: $371.65
Meal: $56.43
Beer: $11.28
Taxi: $2.81 per km

My experience October 2018 = $125 for 25 hours.

This was my second time staying in Reykjavik after spending 36 hours there in April 2017.

Hotel: $58 Hotel REK, single bed, shared bathroom, kitchen access.

Regular hotels in Reykjavik are expensive and most places will cost at least $175 per night and potentially in the $250 to $400 range. Airbnb can bring your cost down to $120 to $150 for the better places and less for low-season dates.

There are some bargain places in Reykjavik under $100 per night and that is what I decided to try for my most recent trip when I only needed a single bed for one night’s sleep. I could have booked a double bed with private bathroom at REK Inn for $87. Location was good and convenient to Laugavegur, what seems to be the most touristy street in Reykjavik with restaurants, pubs and shops along a one mile road in downtown.

There are only a few hotels in major chains in Iceland that you can potentially use hotel loyalty points. In general the reward price is high and often represents a poor redemption value compared to what your points will buy in other locations.

Radisson Rewards has two hotels in Reykjavik (Radisson Blu Saga at 44,000; Radisson Blu 1919, a great location at 70,000). There is also a Park Inn near Keflavik Airport.

Marriott Rewards has three Reykjavik hotels in Design Hotels brand, all priced at category 7 rates with published rates generally $300 and higher per night.

Hilton Nordica is as low as 40,000 points in off-season. Two other Hilton brand hotels in Canopy and Curio Collection are better locations downtown, usually more expensive and start at 70,000 points.

Laugavegur Street Reykjavik

Reykjavik Meals:

  • Dinner – $10 salad, crackers and chocolate coffee beans at Bonus grocery store.
  • Breakfast – $3 berry yogurt at Bonus grocery store.
  • Lunch – $10.75 Shalimar Reykjavik Pakistani take-away lunch special (chicken curry, rice, naan bread). My only hot meal since dining on Indian curry in the airport lounge of LHR the day before.
Reykjavik $10 dinner
Skyr yogurt $3 breakfast on the rocks of Reykjavik harbor

I wrote an article last week examining restaurant prices at more than 20 places on Laugavegur, Reykjavik’s main tourist crawl street. In general, plan on $15 to $20 per person for a basic meal without alcohol.

Loyalty Traveler – Price of dining in Reykjavik at 21 restaurants on Laugavegur and Austurstraeti.

Pakistani curry lunch take-away $10.75 Shalimar Restaurant, Reykjavik

Beer: No beer drinking during my stay. Beer at 1,200 ISK ($10.00) is common price for alcohol in restaurants. A bit more for house red or white at most places.

There were several pubs and restaurants where I could have had beer for under $7 per pint during 4-7pm Happy Hour. This is a common feature of many restaurants and bars in Reykjavik.

The Drunk Rabbit had an all-day special price for Guinness at 800 ISK ($6.66 at time of stay) on Thursday and every day 12-7pm happy hour on Viking lager for 600 ISK ($5.00 USD). This is a tourist area bar where I found myself drinking on my previous trip to Reykjavik.

The Drunk Rabbit Reykjavik

Transportation: One of the major expenses for Reykjavik is the cost to travel from Keflavik to the city by bus. Reykjavik Excursions FlyBus is the most common and frequent airport service at 5,200 to 5,500 ISK round trip. My ticket cost 5,200 ISK purchased during Icelandair flight.

There is a public bus airport to city option, but that is still about 3,200 ISK ($27) and far more limited in departure times with longer travel time.

Reykjavik Excursions FlyBus

Reykjavik has a relatively small downtown area as the center of tourism.

Rental cars in Iceland price around $60 to $70 per day for an economy car and around $100 for an intermediate car.

Day Tours: One of the revelations I had walking around Reykjavik checking out prices of things is noticing several all-day bus and hiking tours to scenic Iceland locations around the island priced around $100 to $130. Personally, I think Iceland is one area where I would prefer a group tour if traveling outside the summer season. I have seen some wild travel videos about tourists in rental cars who found themselves stuck in sudden treacherous storms as they drove around Iceland. Iceland is remotely rural outside Reykjavik.

Reykjavik Excursions South Shore Adventure 10-hour Tour 9,999 ISK = $82 USD.

Iceland is expensive, but manageable on a budget if you have hotel points to burn for the high priced reward nights or you are willing to book basic lodging that might be a downmarket from your normal travel pattern.

After exploring only Reykjavik on my two overnight stays in Iceland, I will try and budget a day tour excursion when I find myself flying via Iceland next time to experience more of the natural beauty of the island.

Budgeting 2 days in Reykjavik, (pr)Iceland (April 6, 2017)

Hotel Review Hilton Reykjavik Nordica (April 13, 2017).

Luggage Storage in Reykjavik for tourists (April 13, 2017).

My 72 square feet with REK Inn Reykjavik Iceland $57 room (Oct 31, 2018).

Harpa Concert Hall imagery Reykjavik, Iceland (Nov 1, 2018).

Price of dining in Reykjavik at 21 restaurants on Laugavegur and Austurstraeti (Nov 1, 2018).


  • lenin1991 November 11, 2018

    I like reminders like this that frugal travel can still be great — done well, it can also give you an experience closer to the daily lives of the place you visit compared to chain hotels and generic tourist restaurants.

  • All Other Colours Jemima November 11, 2018

    This was very interesting to read! It’s nice to notice that with a bit of planning, you can stay with limited budget. I haven’t been to Iceland yet, but hope to go there in the near future. When I was visiting Oslo, I was prepared for the high costs but found it also very possible to find budget-friendly options.

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