Hostels in Iceland

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 in 2025, 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, vibrant 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 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 and Reykjavik’s main shopping street, Laugavegur, KEX Hostel offers industrial-chic decor and a vibrant 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, making 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 Hostels in South Iceland

South Iceland is a must-visit region, home to iconic attractions like Seljalandsfoss, Skogafoss, and Reynisfjara 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 Hostels in South East Iceland

South East 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 south east 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 Hostels in East Iceland

East Iceland is known for tranquil fjords, charming villages, and less-traveled routes. Hostels in this region 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 4 Hostels in North Iceland

North Iceland combines the livelier atmosphere of Akureyri with the tranquil charm of smaller coastal towns. Hostels in this region 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. Husavik Green Hostel (Husavik): Situated just a short walk from Husavik Harbor, this eco-friendly hostel is a great choice for travelers planning whale-watching tours or exploring Husavik’s museums.
4. 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 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 this region provide simple, comfortable stays for travelers exploring this rugged corner of Iceland.

1. Korpudalur 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 Hostels in Snaefellsnes

The Snaefellsnes Peninsula is known for its diverse landscapes, from glaciers and lava fields to charming fishing villages. Hostels in this region provide affordable and comfortable stays for travelers exploring the west of Iceland.

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, South East 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 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: Solo travelers may prefer hostels with social spaces, while couples or groups might value more privacy.
• Book early: Iceland’s hostels fill up quickly, especially in summer. Reserve your spot in advance to secure the best options.

Summary

Staying in hostels is the best way to travel Iceland on a budget. With us at Guide to Iceland, you can easily find and compare top hostels across Iceland. We offer a best price guarantee and flexible cancellation policies, making planning your trip simple and stress-free. In conclusion, hostels in Iceland offer affordable, comfortable, and convenient stays, no matter where your journey takes you.