Just back from a short break in Reykjavik, celebrating our Silver Wedding; the whole trip was thoroughly enjoyable and whetted our appetite for a return visit. Cost of living IS high - we reckon some 20 to 25 percent above what we pay here in London, but in fairness, the quality of everything we ate & drank was of the highest, even in "cheaper" places.
We flew Icelandair from Heathrow and were pleasantly surprised by the legroom (31") and the seatback IFE screens and free Wi-Fi. Also, soft drinks, water, tea & coffee are all complementary, so loads of thumbs up from my coffee drinking missus!
At the airport we used the Grey Line transfer bus into the central bus station, then on to a smaller shuttle to our hotel - this system is used by all tour operators in Reykjavik as a lot of the streets are not suitable for large coaches - as a result it works very well. We had pre-booked a tour of the Golden Circle, which I cannot recommend highly enough; a knowledgeable guide, time to yourself at each stop, and the absolutely stunning Icelandic scenery, what's not to like?
I had, as a surprise, signed up my wife (a scuba diver) to dive the inter-continental rift between the European and American tectonic plates - she loved it, but would suggest inexperienced divers take the snorkelling option.
Hotelwise, we stayed at the Centerhotel Klopp (see separate review) which was perfectly placed for us, being within easy walking distance of all the major sights in the city, and less than 2 minutes to the shuttle pick-up point for our out of city excursions. The hotel was clean & comfortable, with a good breakfast included in the rate - not always provided in Reykjavik; we visited several restaurants and cafes which I won't list here, but if anyone is looking for suggestions, or indeed any advice or tips on Reykjavik/Iceland just ask.
I'm so pleased you enjoyed your trip. My sister in law has been to Reykjavik & thought exactly the same as you, expensive but not to be missed.
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