The Best Places to Stay in Iceland Accommodation In Iceland
Iceland has become an unbelievably popular traveling destination over the last few years. Learn where to stay in Iceland for your vacation including the best hotels, budget hostels, and campgrounds.
As I’m sure you’re already aware by now, Iceland is an incredible holiday destination for all types of people, from families to adventurous solo travelers.
While flights have become increasingly cheap, food& lodging however are not.
There are tons of unique places to stay in Iceland due to its diverse scenery, and every time I visit I find something new to experience, which stimulates it one of my favorite countries.
Best Places To Stay In Iceland
When it comes to finding a place to stay in Iceland, hotels can be on the expensive side, and there aren’t a lot of options compared to other countries. Hotels can get booked up months in advance, especially during the high season.
It’s important to book Iceland accommodation early to get the best deals.
In this guide, I’ll cover everything from budget backpacker hostels to luxury Reykjavik hotels, family-owned farms, campgrounds, and even campervan rentals — you’ll learn exactly where to stay in Iceland to have a great time.
Airbnb is also a great option for finding a cool apartment to stay at in Iceland. Check out my Airbnb article for a $35 discount! Reykjavik Iceland Hotel Guide Where To Stay In Reykjavik
Reykjavik is the capital of Iceland, and where most travelers base themselves from initially. The city welcomes guests with a cosmopolitan mix of restaurants, cafes, street-art, museums and tour company headquarters.
The busy heart of Reykjavik is the Midborg neighborhood, especially Laugavegur Street, where you’ll find shopping, restaurants, nightlife and all sorts of fun things to do.
If you want to be where all the action is, bide close to Laugavegur Street. But there are some other great neighborhoods in Reykjavik too, which I share below.
Here are my suggestions for the top hotels, hostels, and campsites in Reykjavik depending on your budget.
Cheap Hostels In Reykjavik
Loft Hostel– With two Best Hostel awards, Loft is one of the best places to stay in Reykjavik when you’re traveling on a budget. Located in the heart of the city, it features a large balcony to admire the city from above. They often coordinate music and activities, have good wifi, and friendly staff.
Reykjavik Downtown HI Hostel– Reykjavik Downtown HI Hostel is an eco-friendly hostel that even serves breakfast made of organically grown produce. There’s parking on site, and the staff can help you rent a vehicle. WiFi is free; if you don’t have a computer, use the one at the foyer to access the internet.
Budget Hotels In Reykjavik
Rey Apartments– Rey Apartments is located in between the main shopping area and the trendy district of Skolavordustigur in Reykjavik. The modern, fresh looking apartments feature free wifi and fully equipped kitchens and living room. The geothermal Sunhollin swimming pool is just 10 minutes away!
Hotel Fron– Stay in the heart of Reykjavik at this hotel on Laugavegur Shopping Street, walking distance from the bus stop. There’s parking on site. Whether you choose a room or an apartment, you’ll have a private bathroom and a furnished kitchen. There is a great restaurant is next door too!
Mid-Range Hotels In Reykjavik
Hotel Odinsve– Choose a room in this Iceland hotel with a window overlooking Reykjavik to enjoy magical positions every day of your bide. Snaps Restaurant, within the hotel, offers tantalizing Danish cuisine. Additionally, the shoppers’ paradise, Laugavegur Shopping Street, is about two hundred meters from the hotel.
Alda Hotel Reykjavik- Alda is a great place to stay in Iceland for exploring Reykjavik. Indoors, there’s free internet access, a bar and a gym. Some rooms have balconies with either stunning views of the sea or Reykjavik. Outdoors, Reykjavik Art Museum is a short walking distance from the hotel. Lake Tjornin is also close by.
Skuggi Hotel Reykjavik– Park your rental car in the free underground parking space, step into a clean room with the right ambiance for a relaxing night. To enjoy a snack, head out to any of the restaurants near this boutique hotel. If you only want a drinking, there’s a bar in the premise. Park of the Keahotels hotel chain.
Luxury Hotels In Reykjavik
Kvosin Downtown Hotel– When you want to be pampered, you can’t do much better than this Reykjavik hotel. Housed in a restored house from the 1900′ s, this boutique hotel offers the largest rooms you can find in Reykjavik, decorated in modern Scandinavian style and featuring artworks by local artists.
Reykjavik Residence Suites– With only 10 rooms, expect an intimate and quiet ambiance. Each room has a balcony and a lounging area for guests who wish to expend more time indoors. Garden view rooms overlook a scenic garden. This property is just 3km from the city center, but if you want to enjoy a meal nearby, there’s a grill merely 300 m away.
Good Campgrounds Near Reykjavik
Reykjavik Campsite– Located in the Laugardalur area of Reykjavik, this modern campsite features a kitchenette, self-service laundry and bathroom facilities. It is wheelchair accessible. Bring a canine friend too because dogs are welcome! Parking and wireless internet is free.
Hafnarfjordur Camping– Stay in Iceland on a budget inside Vidistadatun, on grounds with lush lawns. Escape the bustle of the city for a quiet camping experience just half an hour away from Keflavik International Airport. This family-friendly campsite has modern amenities like a laundry machine. Internet access is available at the hostel situated next door.
Cool Neighborhoods in Reykjavik Best Neighborhoods In Reykjavik Midborg
Midborg is where all the action is in Reykjavik, and where to stay for the best nightlife in the city. Full of quirky shops, museums, restaruants, and the main walking district.
Located only west of the city center, Vesturbaer is a mix of residential neighborhood and little cafes. It’s a bit queiter than downtown.
A local working-class residential area east of the city, with plenty of parks& playgrounds. The name means “the hills” and places out here are much cheaper than the city center.
Laugardalur is kind of the sports and recreation hub of Reykjavik. Known as” the hot spring valley ,” this is where you’ll detect the local sports stadium as well as a campground.
Golden Circle Hotel Guide Where To Stay On The Golden Circle- Selfoss& Hveragerdi
The Golden Circle is a broadside 300 km road that takes you from the capital city of Reykjavik towards the center of Iceland, and back again in a single day. It’s the perfect introduction to Iceland if you’re short on time or on a layover.
From ancient historical sites to beautiful natural landmarks, the Golden Circle has a bit of everything. You can join an organized tour of the Golden Circle or rent a auto and self-drive at your own pace.
Most people base themselves from Reykjavik for this drive, however, you can also spend the night somewhere along the Golden Circle. The townships of Selfoss and Hveragerdi are good options for this.
Here are my suggestions for the top hotels, hostels, and campgrounds on the Golden Circle depending on your budget.
Cheap Hostels On The Golden Circle
Selfoss Hostel– Everything you need to get a good night’s of sleep before you continue to explore Iceland. The clean, functional rooms have free wifi and a view over Ingolfsfjall mountain. There’s free parking, which is a big plus when you’re rental a auto in Iceland. There’s a big common kitchen and a hot tub too.
Hot Springs Hostel– Splendid mountain views greet you when you look out of the window every morning. If you would like to relax within the hostel, there’s Wi-Fi, and you can also spend some time in the play region. However, the enchanting landscapes of Reykjafjall Mountain around the hostel invite you for a hiking expedition.
Budget Hotels On The Golden Circle
SKYR Guesthouse– This guesthouse has spacious rooms equipped with a television and a coffee/ tea maker. Enjoy good coffee and a sumptuous snack on site as you plan whether to go hiking or to enjoy a shopping excursion at the market. There’s free wireless internet everywhere and free parking. If you don’t wish to drive, hire a motorcycle at the guesthouse and explore the neighborhood.
Guesthouse Inga– The locating of this guesthouse on the Golden Circle is excellent, with open skies bringing the beauty of the northern lights over the property. The rooms are spacious, neat, and some have great views of the scenic surrounds. The communal bathrooms are modern and clean. You’ll also love the communal lounge.
Mid-Range Hotels On The Golden Circle
Eldhestar– Located only half an hour from the capital, this Iceland eco-hotel offer everything you need to relax. You can have a cup of hot tea in the sofa next to the fireplace or enjoy a cocktail at the bar. Each room has a private entryway with nature-inspired decor. Eldhestar has an outdoor wooden hot tub and is located next to an Icelandic horse farm.
Guesthouse Bjarney– The rooms share a rendered kitchen, bathrooms and a laundry room. On the terrace, you can host a barbecue for your traveling buddies or for the new friends you make while chatting at the communal sofa. To take the experience to another level, stay in the caravan instead of an ordinary room.
Luxury Hotels On The Golden Circle
Frost& Fire Hotel– This unique luxury hotel in Iceland is near a geothermal region, giving you the feeling of being in the middle of nature. Thingvellir National Park is only a 40 -minute drive away. Relax at the spa-like facilities including 2 hot tubs, an outdoor pond, hot spring powered Jacuzzi and sauna. You can even cook an egg over a natural hot spring for breakfast!
Ion Adventure Hotel– View of the northern lights is a definite reason to stay at this hotel near Thingvellir National Park. The hotel sits on Mount Hengill and it has a restaurant, heated pond, spa and sauna. The communal lounge is where you share your tales as you satisfy other adventure-seekers.
Where to Stay in Vik, South Iceland Where To Stay On Iceland’s South Coast- Vik
Iceland’s South Coast is filled with natural wonders, constructing it perfect for an adventure outside the capital. If you’re driving around the entire Ring Road on Route 1, this is usually the next stop after a trip-up around the Golden Circle.
The South Coast is home to some of Iceland’s most famous waterfalls, like Seljalandfoss and Skogafoss. Reynisfjara Black Beach, Solheimajokull Glacier, and the Eyjafjallajokull Volcano are other highlights.
One of the larger towns tourists stop at is called Vik[ MAP ], with many different lodging options, restaurants, and activities nearby. So it’s a great place to stay for a night or two.
Here are my suggestions for the top hotels, hostels, and campsites along Iceland’s South Coast depending on your budget.
Cheap Hostels On Iceland’s South Coast
Puffin Hostel– Located in the center of Vik, this hostel is only a 10 -minute walk from the fabulous black beaches. It offers a fully equipped kitchen and a shared seating area. The functional rooms have shared facilities and bathrooms.
Budget Hotels On Iceland’s South Coast
Hotel Geirland– The rooms offer views of mountain ridges around the hotel. Some cabins are stand-alone divisions set on a pristine garden. The restaurant serves a la carte breakfast and dinner and it also pre-packs lunch on request ahead of expeditions. To catch up with family and friends online or to watch a television show, head to the hotel’s main building.
Guesthouse Reyir– This family-owned guesthouse is a short distance from the beach, and if you’re lucky, you’ll get a room with spectacular opinion of the sea. You share bathroom facilities with other guests, and the communal kitchen has everything you need to prepare a dinner when you don’t want to dine outdoors.
Mid-Range Hotels On Iceland’s South Coast
The Barn– Located near Vik and provides a great base for exploring the South Coast of Iceland. It features parking and free wifi, being great for travellers who tour the island by rental car. The rooms offer enough privacy, which stimulates this hostel a great option for couples. Some of the rooms have a view over the mountains and there are dormitory beds with drapes available.
Icelandair Hotel Vik– This hotel is less than 5km from major attractions like Reynisfjall Mountain, Vikura River and Lake Hofdabrekkulon. Situated just opposite the beach, and near restaurants and other amenities, this hotel in Iceland is a perfect place to stay. It has various room alternatives such as family, twin and triple rooms.
Luxury Hotels On Iceland’s South Coast
Hotel Kria– For a luxurious stay near Vik this new hotel opened in 2018. The rooms have a modern design and all the facilities one can expect from a high-class hotel. During your stay at Kria you can enjoy amazing mountain views, a cocktail at their bar or a delicious snack at their restaurant, which serves Icelandic specialties. The breakfast buffet features food from local farms.
Black Beach Suites– For unparalleled opinion of the mountain and the high seas, only step into the terrace at this property on Iceland’s South Coast. You can prepare food in your room; there’s a fridge, a microwave and a toaster. The black sand beach is just 4km from this property, and fun activities in the vicinity are outdoor dining, skiing and golfing.
Best Iceland Hotels Near the Glacier Lagoon and Hofn Where To Stay Near The Glacier Lagoon- Hofn
Continuing your drive on Iceland’s Ring Road, you’ll eventually reach the fishing village of Hofn. Hofn means “harbor” because it sits on one of the few natural harbors found in Iceland. This is the next major township after Vik, about a 4-hour drive away.
While four hours doesn’t seem like much, there’s so much to do in between these two Icelandic towns on the South Coast that you can easily expend a full day on activities, and may want to expend a night here.
Hofn is the town closest to Jokulsarlon glacier lagoon and Vatnajokull National Park. Watching the sunrise from Jokulsarlon was one of the highlights of my trip-up, so you might want to sleep nearby.
Here are my suggestions for the top hotels, hostels, and campsites near Hofn and the glacier lagoon depending on your budget.
Cheap Hostels Around Hofn
Hofn Hostel– Living close to the harbor, with exceptional views of Vatnajokull Glacier, is one of the highlights of a stay at this hostel. Shared facilities include a television lounge and a bathroom. Hiking should top your list of adventures, and you could also play golf about 3km from the hostel. Parking is available, without prior reservation, and it’s free.
Lilja Guesthouse– This friendly guesthouse offers spacious rooms with a warm floor and private bathrooms. The quiet rooms are equipped with a coffee machine and free WiFi. The nearby mountains offer a great view for the guests, who can enjoy their coffee in the shared lounge.
Budget Hotels Around Hofn
Skyrhusid Guesthouse– How about a night right next to Jokulsarlon Glacier Lagoon? The opinion of the mountain is enchanting. The rooms at this farm-house style guesthouse have a wash basin and the bathroom is communal. There are two restaurants on the property. For history fans, Thorbergssetur Historical Museum is on site.
Hofn Guesthouse– The shared dining region is the spot to meet fellow travelers. All rooms, whether in the main building or in the annex, have either a doubled or twin beds. Bathrooms are communal, and there’s free wifi. A lazy stroll to the harbor is perfect when you don’t want to visit Hofn Swimming Pool a short distance from the guesthouse.
Mid-Range Hotels Around Hofn
Hotel Hofn– Most rooms have views of the nearby glaciers and the sea. The hotel has private parking, a great bonus if you are traveling by rental auto. You can dine on the restaurant’s terrace to admire the view as you enjoy Icelandic specialties. Jokulsarlon glacier lagoon is one hour away, while the Silfurnes Golf Club and Hofn Harbour are only a 10 -minute walk.
Hotel Jokull– A short drive from Hofn, you arrive at this hotel for an unforgettable vacation with astounding views of the northern lights. Vatnajokull, the largest glacier you’ll see in this country ought to convince you to stay longer. Some rooms have a private bathroom while others share a bathroom. There’s free parking, and a bar.
Luxury Hotels Around Hofn
Aurora Cabins– If you’re lucky, you might catch the magnificent aurora borealis from the cabin porch at this awesome Iceland hotel. There’s a small hill nearby with a bench on top, another nice spot to admire the suns. The cabins are spacious and feature free wifi, a kitchen with microwave and toaster, terrace and a seating area. Great romantic place for couples!
Exploring Eastern Iceland Where To Stay In East Iceland- Egilsstadir
East Iceland is often overlooked by tourists, being so far from the capital of Reykjavik. But it has a lot to offer. The picturesque fishing villages which line the rugged landscape are dotted with waterfalls and glaciers, building the region perfect for hiking.
The main city people base themselves in East Iceland is called Egilsstadir, one of Iceland’s youngest towns. It was built on the banks of the Lagarfljot River in a wide valley. It has good access to the Eastern Fjords too.
East Iceland is also rich in legends about the elves and other mythical creatures which were believed to populate the region. It’s a good place for wildlife spotting, including herds of wild reindeer, arctic foxes, and puffins.
Here are my suggestions for the top hotels, hostels, and campgrounds near Egilsstadir and the East Fjords depending on your budget.
Cheap Hostels In Egilsstadir
Tehusid Hostel– The rooms at this hostel in Egilsstadir feature comfortable beds and shared bathrooms. Other communal facilities are a furnished kitchen and a lounge. Wake up to breakfast at the hostel before you explore the rivers, mountain and lake in the vicinity. The Stafdalur Ski Lift is 20 km from the hostel.
Budget Hotels In Egilsstadir
Laufas Guest House– A night on a comfortable bed prepares you for the range of escapades nearby such as skiing, swimming and hiking. This family-friendly guesthouse has simple but modern rooms with a communal bathroom, a kitchen and a sofa. There’s a play region for kids, and you could also take children to the geothermal swimming pool a short walk from the property.
Mid-Range Hotels In Egilsstadir
Icelandair Hotel Herad– This hotel’s plush lounge is probably where you will spend your evenings after exploring attractions like Hengifoss waterfall. There’s a terrace bar, a eatery that responds to delicious steak, WiFi in rooms and satellite TV. This hotel belongs to Icelandic Hotels. The detail in the interior decor and room furnishings is exceptional.
Luxury Hotels In Egilsstadir
Hotel Valaskjalf– Lush, scenic lawns defined the mood for a quiet stay at this hotel. The rooms have WiFi access; they are en-suite, spacious and clean. Enjoy buffet breakfast at the restaurants sector before you head outdoors to explore the woodlands and rivers. Fun activities in the vicinity include hiking and boat rides.
Akureyri in the Fall Where To Stay In North Iceland- Akureyri
Akureyri is the largest and most important town in Iceland, after its capital. It is an old trading city and important fishing hub, it’s also a wonderful base for whale watching trips. The city has heated swimming pools too.
Travelers to Iceland generally end up staying in the city of Akureyri, or near Lake Myvatn, depending on where you end up after a long drive on Route 1.
Lake Myvatn is located in an active volcano area and is surrounded by amazing lava formations. There is a rich population of water birds living around the lake, building it great for bird watching.
Here are my suggestions for the top hotels, hostels, and campgrounds around Akureyri depending on your budget.
Cheap Hostels In North Iceland
Town Square Guesthouse– At Town Square Guesthouse you will find all the essentials for a decent remain. Some rooms offer opinions over the high seas or the mountains, while all of them include access to a shared bathroom and free WiFi. Guest also have access to a fully equipped shared kitchen and a nice terrace.
Budget Hotels In North Iceland
Lonsa Guesthouse– This guesthouse is a family-owned property so anticipate a homely touch everywhere. The terrace yields awe-inspiring views of the surrounding. With free WiFi, and a desk in each room, you have all you need while traveling as a digital nomad. Guests share a bathroom, a living room and a kitchen. Close to the guesthouse is Akureyri Swimming Pool and Dalvik Fishing Village.
Mid-Range Hotels In North Iceland
Icelandair Hotel Akureyri– This Iceland hotel in Akureyri offers modern rooms with wooden floors and comfy beds. They have a cozy bar with a fireplace, and the restaurant cooks delicious snacks with Icelandic and Mediterranean influences. The Akureyri swimming pool and geothermal hot tubs are only a 2-minute walk away from the hotel.
Luxury Hotels In North Iceland
Hotel Kjarnalundur– Just 2km away from Akureyri Airport and 5km from the city center. The panoramic views of the surrounds and the amazing Aurora Borealis can be enjoyed from all over the property. There is a hot tub on the deck of the bungalow, which also provides a great spot to admire the scenic sceneries Cozy, modern design with wooden finishes. You also get free access to their sauna!
Where To Stay On Snaefellsnes Peninsula
Snaefellsnes Peninsula is nicknamed “miniature Iceland”, thanks to its vast diversity of landscapes. This also stimulates it perfect for a quick weekend getaway, during which you can enjoy the best of Iceland.
Driving around this peninsula you’ll find waterfalls, hot-spring ponds, lava tubings, black sand beaches, old churches, fields of wildflowers in the spring, and massive glaciers.
Driving around Snaefellsnes is another day-trip option if you don’t have a lot of time in Iceland, as it’s located only 2 hours north of Reykjavik city.
Here are my suggestions for the top hotels, hostels, and campgrounds on Snaefellsnes Peninsula depending on your budget.
Cheap Hostels On Snaefellsnes
North Star Guesthouse– North Star Guesthouse offers spacious rooms and free private parking on the main street of Olafsvik. There is a self check in/ check out which makes everything easier for the traveler who wants to get some rest before heading to the restaurants in the area for a drink and a dinner. Popular activities for guests are golfing, hiking and fishing.
Budget Hotels On Snaefellsnes
West Park Guesthouse– The position of the mountain and the ocean will stimulate you fall in love with this location. The guesthouse sits in Snaefellsjokull National Park, offering eight houses with ocean and mountain views. Each home has a spacious kitchen and living room so you won’t feel caged when there are other guests sharing a home with you.
Mid-Range Hotels On Snaefellsnes
Arnarstapi Hotel– Located only 200 m from the Gatklettur rocks and offers positions over the sea, which induces it ideal when you just want to relax and enjoy nature after a long day. The rooms are modern and feature private bathrooms. This new hotel also has an on-site restaurant where you can enjoy some of the most delicious Icelandic specialties.
Luxury Hotels On Snaefellsnes
Fell Holiday Home– This place has 6 separate bedrooms with 2 bathrooms, a fully equipped kitchen and a living room. The apartment also has a garden, which makes a great place to admire the Northern Lights and the Gatklettur rocks. There is free WiFi all over the modern property.
Where to Stay near the Blue Lagoon Keflavik Airport Hotels& The Blue Lagoon Budget Hotels Near Keflavik Airport
The Base Hostel At Keflavik Airport– Located near the airport, the hostel style units share a bathroom and a kitchen. Free WiFi is available, and there are shuttle services to and from the airport. If you have time before your flight, request the staff to organize a trip to the Blue Lagoon nearby.
Brimarsbru Sleep Inn– If you love art as much as you love traveling, the collecting in the sleeping region will grab your attention. This inn has a cozy homestay impression with all the amenities you need away from home. Prepare your dinners in the kitchen; you can even bake or microwave your dinners. The nearest eatery, Tjarnargrill, is less than a kilometer away.
Kef Guesthouse At Graenasvegur– This guesthouse’s location is excellent, simply 4km from Keflavik International Airport. Accommodation alternatives are divisions with communal bathrooms and others with private bathroom facilities. If you don’t want to dine out, there’s a furnished communal kitchen. The Blue Lagoon’s geothermal spa is about half an hour away.
Budget Hotels Near The Blue Lagoon
Geo Hotel Grindavik– This hotel checks you into a clean, spacious room with a relaxing ambiance. Each room has a TV and a private bathroom equipped with a hairdryer. There’s a communal sofa, free WiFi and parking at no charge. With the Blue Lagoon’s geothermal spa just 6km from the hotel, there’s something to do outdoors.
Luxury Hotels Near The Blue Lagoon
Northern Light Inn– This inn has spacious rooms with WiFi, a TV, and a hairdryer in the bathroom. Max’s Restaurant treats guests to tempting seafood and local cuisine on the buffet and a la carte set-up as they enjoy a panorama of the peninsula at the dining region. The Blue Lagoon is strolling distance from the inn.
Stay in a Campervan! Renting A Campervan In Iceland
There are many ways to explore Iceland. Most people rent a vehicle while staying in hotels, or rent a campervan while sleeping in the vehicle. Convenience is one of the main reasons people choose to rent a campervan.
Once you’ve rented the vehicle, you can start driving and exploring the country on your own terms. It’s a lot easier to find a campsite with space for your van than it is to book a last minute hotel in Iceland.
Renting a campervan in Iceland can save you a lot of time and money. You can prepare your own food on the go and save money on accommodation. It also gives you a lot of flexibility to change your schemes anytime you want.
But life on the road might take its toll, especially if you have small kids. Not all campervans will have a toilet and you might definitely miss showering on a regular basis.
The weather depends on luck and what time of year you visit Iceland. A worst case scenario is that you might have to cook in the rain, snowfall, or deal with high winds and cold temperatures.
I’ve traveled around Iceland both ways, and if you’d like to rent a campervan in Iceland, I highly recommend Happy Campers.
Travel Planning Resources For Iceland Packing Guide
Check out my travel gear guide to help you start packing for your journey. Pick up a travel backpack, camera gear, and other useful traveling accessories.
Book Your Flight
Rent A Car
Protect Your Trip
Don’t forget travel insurance! I’m a big fan of World Nomads for short-term journeys. Protect yourself from possible injury& steal abroad. Read more about why you should always carry traveling insurance.
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Have any questions about where to stay in Iceland? Which hotels in Reykjavik have you stayed at? Drop me a message in the comments below!
This is a post from The Expert Vagabond adventure blog.
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