Head to Reykjavík for an affordable Icelandic adventure. Photo: Marco B.

Reykjavík is a fine base for exploring Iceland; it is also an exciting place to stop for a few days between North America and the European continent. Icelandair’s extensive reach across North America, as well as the arrival of Wow’s low-cost flights from Boston and Baltimore, make long layovers in Reykjavík easy to arrange.

The only downside? Iceland’s capital city is not a cheap place to visit. While the tourist cost index has gone down somewhat in the wake of Iceland’s financial crisis of 2008-2011, huge year-on-year increases in the numbers of tourists heading to Iceland have generated high-season bottlenecks in the affordable accommodation market.

However, all is not lost when it comes to visiting this popular destination on a budget. Here are five simple tips for saving money in Reykjavík.

Reykjavik Travel Tips: 5 easy ways to save

Grabbing a hot dog at Baejarins along the waterfront is cheap and tasty. Photo: Comdor

1. Hot dogs

On my first visit to Iceland, back in 2001, almost everything was astonishingly pricey. I was forced to safeguard my budget carefully. I relied on my hotel’s ample buffet spread at breakfast and walked everywhere.

The one “meal” I could afford? The humble Icelandic hot dog. Those sold at Baejarins Beztu Pylsur along the waterfront (Tryggvagata 101) have been saving budget travelers since the beginning of time. (OK, since 1937.) Make sure you order your hot dog með öllu, (that is, with all the toppings – raw onions, crispy fried onion bits, ketchup, sweet mustard and Icelandic remoulade.) A pylsur með öllu costs just 400 ISK ($3; €2.75).

Plunging into the Laugardalslaug public pool costs just a fraction of the Blue Lagoon. Photo: Félix Tungsteno

2. Swimming pools

The much-vaunted Blue Lagoon is indeed a magical place. In recent years, however, as tourism in Iceland has boomed, it has lost a little bit of its once-effortless magic. These days a booking is required in advance, and the most bare-bones entrance fee is a whopping €45 ($49).

Instead of the Blue Lagoon, go for a dip in one of the many public swimming pools around the city. Three centrally swimming pools in Reykjavík are Sundhöll Reykjavíkur (Barónstígur 45a), Vesturbaejarlaug (Hofsvallagata), and Laugardalslaug (Sundlaugavegur 30). Entrance to all three pools is 650 ISK ($4.90; €4.40) for adults and 140 ISK ($1.05; €1) for kids.

And while we’re at it, here’s an excellent guide to Icelandic swimming pool etiquette. Pay attention before you take the plunge.

Asmundarsafn Sculpture Museum is included in the Reykjavík Art Museum ticket. Photo: Li-Mette

3. Three museums for the price of one

The three museums of the Reykjavík Art Museum can be visited for 1400 ISK ($10.50; €9.50). That’s three museums (Hafnarhús, Kjarvalsstaðir, and Asmundarsafn) for what one might pay in many cities for entrance to a single museum.

• Hafnarhús is a contemporary art museum.
• Kjarvalsstadir features a permanent exhibit of the work of Icelandic landscape painter Jóhannes Kjarval as well as artworks by artists from Iceland and beyond.
• Asmundarsafn is a sculpture museum.

Are you a student or senior? Then you might pay even less. Students pay a reduced rate of 800 ISK ($6; €5.50). Entrance for the over-70s and under-18s is free.

Explore Kolaportið Flea Market for fun (and affordable) Icelandic souvenirs. Photo: Felix T.

4. Flea market shopping

Shopping at Kolaportið (Tryggvagötu 19), open on weekends, offers a window to Iceland’s contemporary creative products as well as yesteryear’s cast-offs. Among the various things to be found here are beautiful wool sweaters, candy, local culinary delicacies and loads of other back-of-the-closet treasures, all at fair prices. There may be no better place for quirky and strange souvenirs.

5. Book a reasonable hotel

Snorri’s Guesthouse is our pick for a cheap bed. It’s a simple, family-run guesthouse located near the center of town. A double with shared bathroom begins at €117 ($128) in summer and €82 ($90) in winter.

Looking for something cheaper? Sleeping bag accommodation at Garður Inn is priced at 5600 ISK ($38; $42). Plus, it’s only a ten-minute walk to the city center.

If those are booked up, try searching over 200 other hotels in Reykjavík.