Travel question of the day: Simon Calder on how to visit Iceland on a budget

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Q I am travelling to Iceland with my girlfriend for 10 days in late August and early September, on a fly-drive trip. Our itinerary and accommodation are booked and paid for. It’s the high cost of food, drink and activities that concern us. Any tips about mid-range restaurants, good deals, etc?

Mike Smith, Cambridge

A The good news is that you have paid upfront for the most expensive elements of your trip, hopefully before the collapse of sterling.

Against the Icelandic krona, as with other currencies, your pound is worth a lot less than it was before the EU referendum. When I was last in the country in the autumn, I was getting almost ISK200 for £1; today, you would be lucky to get ISK150. So a dinner that was a good deal at ISK3,000 per person has risen from £15 to £20. Iceland is once again a high-cost country (after the economic meltdown, and with sterling strong, it went through a few years of moderate prices).

If you drink, the easiest way to economise is on alcohol – depending on your thirst, you might want to maximise on the duty-free allowance, which is two bottles of wine (or a litre of spirits) plus six litres of beer each.

Switching lunch each day from a restaurant to a picnic will also generate good savings. Assuming you are starting in Reykjavik, you can take advantage of the biggest supermarkets in the nation to stock up on essentials.

Next, organise your sightseeing efficiently. In the capital, you can visit the three impressive galleries that make up Reykjavik Art Museum for a single ISK1,500 ticket (about £10).

Outside the capital, many locations – from waterfalls to geysers – are natural attractions for which there is no admission charge. And you can even economise on the €50 minimum fee for the Blue Lagoon – by not going in. That sounds banal, but in fact the area around this steamy bathing complex is rather more beautiful and rewarding than inside. Later, go for a soak in one of the many outdoor municipal baths, heated from the restless earth, for a fraction of the price.

Every day, our travel correspondent, Simon Calder, tackles a reader’s question. Just email yours to s@hols.tv or tweet @simoncalder