Best Hostels in Iceland — Biggest Selection & Lowest Prices Guaranteed

Hostels in Iceland are the top choice for travelers looking to explore the country’s incredible landscapes without overspending. This guide provides everything you need to plan your budget-friendly stay, including top lists of the best hostels in Reykjavik, South Iceland, North Iceland, and beyond.

With detailed regional recommendations, insider tips, and essential information, you’ll find the perfect base to experience Iceland’s natural wonders, culture, and social hostel scene.

Top Hostels in Iceland by Region

Hostels in Iceland can be found in most regions of the country. This list highlights all the best hostels in each part of Iceland to help you find the perfect base for your trip.

Top 3 Best Hostels in Reykjavik

Reykjavik has the largest selection of hostels in Iceland, offering options for travelers seeking cheap and convenient accommodation in the capital. The hostels in Reykjavik are known for their central locations, social atmosphere, and modern amenities.

1. KEX Hostel: Located about a 10-minute walk from Hallgrimskirkja Church and Reykjavik’s main shopping street, Laugavegur, KEX Hostel offers industrial-chic decor and a social atmosphere. Its bar and communal spaces make it a top choice for travelers who enjoy meeting people while staying close to popular attractions.
2. Loft Hostel: Situated directly on Laugavegur, Loft Hostel is perfect for travelers who want easy access to Reykjavik’s shops, restaurants, and nightlife. The rooftop terrace creates a welcoming space to relax or connect with fellow guests, making it a great option for travelers seeking community.
3. Bus Hostel Reykjavik: Positioned about a 20-minute walk (or 5-minute bus ride) from downtown Reykjavik, Bus Hostel is close to major bus routes. This makes it a practical choice for budget travelers planning day trips. The quiet setting and affordable dorms are ideal for those prioritizing value and a low-key environment.

Top 3 Best Hostels in South Iceland

South Iceland is a must-visit region, home to iconic attractions like Seljalandsfoss Waterfall, Skogafoss Waterfall and Reynisfjara Black Sand Beach. Hostels in South Iceland provide convenient access to the region’s natural wonders.

1. The Barn Hostel (Vik): Located about a 10-minute drive from Reynisfjara Beach, this modern hostel in Vik features stylish communal spaces, shared kitchens, and cozy rooms. It’s a great choice for backpackers and nature lovers exploring South Iceland.
2. Midgard Base Camp (Hvolsvollur): Close to Seljalandsfoss and Thorsmork, this hostel offers dorms, private rooms, a hot tub, and a bar. With a friendly, community-focused atmosphere, it’s ideal for active travelers and adventurers.
3. Eyrarbakki Hostel (Eyrarbakki): Located in the small coastal village of Eyrarbakki, this hostel provides basic accommodations for budget travelers. It’s a simple option for those passing through or looking for an affordable place to stay near the ocean.

Top 3 Best Hostels in Southeast Iceland

Southeast Iceland is known for its glaciers, dramatic coastlines, and attractions like Jokulsarlon Glacier Lagoon. Hostels near Hofn provide convenient access to top attractions in the southeast of Iceland.

1. Skyrhusid Guesthouse (Hofn): Located about 25 minutes (28 km) from Jokulsarlon Glacier Lagoon, this hostel offers cozy stays and easy access to glacier tours and ice caves. It’s a practical choice for exploring the eastern edge of the South Coast.
2. Vagnsstadir Hostel (Vagnsstadir): Just 15 minutes (14 km) from Jokulsarlon Glacier Lagoon, this hostel offers simple but comfortable dorms and private rooms. Its location is ideal for travelers wanting to stay close to Iceland’s glacial attractions.
3. Hofn Hostel (Hofn): Situated in the center of Hofn, this hostel is a great base for exploring the Vatnajokull glacier and surrounding area. It offers a mix of private rooms and dorms, catering to solo travelers, couples, and small groups.

Top 3 Best Hostels in East Iceland

East Iceland is known for tranquil fjords, charming villages, and less-traveled routes. Hostels in East Iceland provide comfortable bases for exploring the Eastfjords and nearby attractions.

1. Hafaldan Hostel (Seydisfjordur): This hostel is set in a renovated hospital building and features cozy rooms and a sauna. It’s a great option for travelers looking to discover one of the most picturesque fjord towns in Iceland.
2. Berunes Hostel (Berunes): Situated in a peaceful area with stunning mountain views, this farmhouse-style hostel offers a relaxed atmosphere. It’s ideal for travelers seeking a quiet stay while exploring the Eastfjords.
3. Hostel Framtid (Djupivogur): Found in the coastal village of Djupivogur, this hostel provides budget-friendly accommodations with both private and shared options. Its central location makes it perfect for travelers stopping along the Ring Road.

Top 3 Best Hostels in North Iceland

North Iceland combines the livelier atmosphere of Akureyri with the tranquil charm of smaller coastal towns. North Iceland hostels provide excellent access to attractions like Lake Myvatn and the Trollaskagi Peninsula.

1. Akureyri Backpackers (Akureyri): Located in central Akureyri, this hostel is perfect for social travelers. With an on-site bar, restaurant, and communal areas, it’s a lively base for exploring the city’s shops, cafes, and nearby attractions.
2. Hafnarstraeti Hostel (Akureyri): Also centrally located in Akureyri, this hostel offers a quieter stay with modern dorms and private rooms, a fully equipped kitchen, and social common areas. It’s ideal for travelers seeking comfort and convenience.
3. Dalvik Hostel (Dalvik): Set in the peaceful fishing village of Dalvik, this hostel is perfect for travelers exploring the Trollaskagi peninsula or taking a ferry to Grimsey Island. It offers simple facilities and a friendly, community-oriented vibe.

Top 3 Best Hostels in Westfjords

The Westfjords offer some of Iceland’s most remote and untouched landscapes, perfect for adventurers seeking solitude and dramatic scenery. Hostels in the Westfjords provide simple, comfortable stays for travelers exploring this rugged corner of Iceland.

1. Korpudalur Hi Hostel (Flateyri): Located in a calm valley near Flateyri, this cozy hostel offers stunning mountain views and a peaceful atmosphere. With a shared kitchen and communal spaces, it’s ideal for travelers looking to unwind in nature.
2. Broddanes Hostel (Broddanes): Perched along the scenic coastline, this hostel offers basic but comfortable accommodations with panoramic sea views. It’s a great choice for those seeking a quiet retreat to appreciate the beauty of the Westfjords.
3. Hvammstangi Hostel (Hvammstangi): While not located in the Westfjords, this hostel on the Vatnsnes peninsula is a convenient stop for travelers heading to or from the region. The area is known for its seal colonies and stunning coastal views.

Top 2 Best Hostels in Snaefellsnes

The Snaefellsnes Peninsula in West Iceland is known for its diverse landscapes, from glaciers and lava fields to charming fishing villages. West Iceland hostels provide affordable and comfortable stays for travelers exploring the peninsula and the wider region.

1. The Freezer Hostel (Rif): Situated in the small village of Rif, this hostel doubles as a cultural center, hosting live performances and events. With dorms, private rooms, and communal spaces, it offers a comfortable base in Snaefellsnes.
2. Grundarfjordur Hostel (Grundarfjordur): Located in the beautiful Grundarfjordur, this hostel offers cozy accommodations with views of the iconic Kirkjufell mountain. It’s an excellent base for travelers planning to hike and explore nearby attractions.

Hostels Along Iceland’s Ring Road

Travelers driving and exploring the Ring Road (Route 1) on a budget will find hostels along the entire route, allowing for cheap accommodation. Here’s an example of a 10-day budget-friendly road trip itinerary with hostels along Iceland’s Ring Road:

• Night 1: KEX Hostel in Reykjavik, Capital Region

• Night 2: The Barn Hostel in Vik, South Iceland

• Night 3: Hofn Hostel in Hofn, Southeast Iceland

• Night 4: Hafaldan Hostel in Seydisfjordur, East Iceland

• Night 5: Akureyri Backpackers in Akureyri, North Iceland

• Night 6: Hvammstangi Hostel in Hvammstangi, North Iceland

• Night 7: Korpudalur HI Hostel in Flateyri, Westfjords

• Night 8: Broddanes Hostel in Broddanes, Westfjords

• Night 9: The Freezer Hostel in Rif, Snaefellsnes peninsula

• Night 10: Loft Hostel in Reykjavik, Capital Region

Tips for Choosing the Right Hostel in Iceland

Finding the right hostel can make your trip to Iceland more enjoyable and stress-free. Here are some tips to help you choose the right one:

• Consider location: Look for hostels close to attractions, transportation hubs, or city centers to save time and effort.
• Check amenities: Ensure the hostel meets your needs with features like free Wi-Fi, shared kitchens, or laundry facilities.
• Read reviews: Check reviews to get other travelers’ opinions on cleanliness, staff friendliness, and the overall vibe.
• Assess atmosphere: Accommodations for solo travelers often include shared spaces that make it easier to meet others, while couples or groups may prefer more privacy.
• Book early: Iceland’s hostels fill up quickly, especially in summer. Reserve your spot in advance to secure the best options.

Book the Best Hostels in Iceland

This guide brings hostels from every region into one place, making it easy to compare dorm beds, private rooms, locations, and verified guest reviews. You can then book with a best price guarantee and flexible cancellation. Central Reykjavik and the busiest Ring Road stops fill first, so locking in those dates early keeps your budget itinerary on track.

Hostels also stretch your budget further when paired with the rest of your trip. Booking self-drive tours or car rentals lets you reach the waterfalls, glaciers, and fjords between towns at your own pace, turning a string of affordable overnight stays into a complete Iceland road trip.