We stopped in for a casual lunch and were both very happy with our dishes. I had the lobster salad and my husband had the lobster soup. Both were delicious. My grilled lobster was very savory and my husband's lobster in broth were like little pillows—very well prepared. We did note that Icelandic lobsters are smaller and sweeter than other species we'd had in the past which we enjoyed very much. I would say they're more similar to a larger langoustine than a classic North American Atlantic lobster. Typically I prefer crab to lobster as lobster can be a bit bland for my tasted so that was a nice surprise.
The bistro is located directly off of the tourist center so it's an easy answer if it's your first day in town and you're getting acclimated. The waitstaff was friendly and service in Iceland in general is never rushed. You can linger as long as you'd like, chat and make plans without ever feeling pressured to move on. I would guess that it's not a locals hang-out but we did see other Icelandic people having lunch so it's not a complete tourist trap either.
The prices were about average for what we payed for meals of this class during our visit. You may have sticker shock overall as dining out is typically more expensive in Iceland than in other regions though it's not out of line with what you might pay in New York or San Francisco for a comparable meal. It's more that Iceland doesn't have a wide range of cheap eats as other cities have. If you are looking for a less expensive lunch walk down towards the Old Harbor where you'll find places like the Haitian Cafe or the Seabaron. There's also hot dog stands, the most famous is Baejarins Beztu Pylsur.
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