Discover the best places to stay in Iceland in our detailed travel guide. Are you looking for hotels and accommodation in Iceland? Wondering where to stay in Iceland to see the northern lights or where to stay in the winter? Then look no further! Read more to find out exactly where to stay in Iceland and when to stay there.
Every year, more and more people visit Iceland to marvel over its incredible natural wonders and partake in the many exciting excursions offered here. As the tourism industry has boomed, hotels, guesthouses, hostels, and apartments have all opened their doors to meet the ever-increasing demand.
However, the wealth of choice can make planning a holiday here a bit of a hassle, so read ahead for everything you need to know about finding the best places to stay in Iceland.
Things To Know About Staying in Iceland
The land of fire and ice has fast become a top-rated destination for travelers worldwide. The options for lodging in Iceland are extensive, and the standards are universally high. At the very least, visitors can be guaranteed a comfortable and clean bed; even most youth hostels here are more inviting than in much of the rest of the world.
Luxury Accommodation in Iceland
On the other end of the scale, visitors hoping for a grand, no-expense-spared vacation might have to tone down their expectations. While there are high-end hotels across the country that specialize in luxury, you won't find many five-star hotels in Iceland that compare with international luxury standards—for now, there’s only one. More on that hotel in our Reykjavik section further down.
Iceland Lodging: Be Aware of Peak Season
While there are many options available when staying in Iceland—and more establishments opening their doors all the time—reservations tend to fill up very quickly. Hotels are usually full during the summer and the Christmas season, which was once an “off-peak” season. Would-be visitors need to make sure they plan their holidays at least several months in advance.
Those intending to travel around the country should plan their stay particularly well. Outside of the greater Reykjavik area and Akureyri, the capital of the north, settlements tend to be tiny, with a limited number of places to stay. If, for example, you are traveling the Westfjords region, it can take several hours to get from settlement to settlement. You don't want to spend a whole day driving to Isafjordur, for example, only to find all of the hotels there are fully booked.
Having a well-thought-out travel plan that is easy to execute is essential to making the most of your time in Iceland.
Road Trips, Camping, and Cabins
The most straightforward way to ensure that you have accommodation wherever you are going is to book a self-drive package. This way, all of your preferences will be considered, and all your places to stay will be booked along your route—all you need to do is get to them on time.
The beauty of a self-drive tour is that getting to your next hotel or hostel is your only obligation; you are free to do whatever else you wish during your days, accountable to no one.
You may also choose to camp in Iceland, although campsites are closed in the wintertime. In any case, we wouldn't recommend camping anywhere in Iceland during the winter! In the summer, however, camping is a good option, as it's cheaper and requires less booking in advance. Be aware that it's still worth checking the availability of different campsites if an event is happening in the area, as they do fill up occasionally.
Many Icelanders also have a second home, a so-called "summer cabin." Despite the name, these homes can also be stayed in during the winter. Many of these cabins can be rented out as a whole, giving you a truly authentic Icelandic experience.
Iceland's cabins and cottages vary significantly in size and amenities. Many of them have an outdoor hot tub, perfect for relaxing and watching the northern lights in winter. The best way to check out what's available is by heading to bungalo.com, where rental cabins available across Iceland are listed.
Iceland's capital city of Reykjavik has the broadest range of hotels in the country, suiting all budgets and needs. Whether traveling on a shoestring budget or looking for a lavish getaway, you’re sure to find the place for you.
Best Places To Stay in Reykjavik
Unquestionably, the best place to stay in Reykjavik is downtown, near the Laugavegur shopping street. There you'll find most of the best attractions, restaurants, and souvenir shops in Reykjavik.
Those with a larger budget have an array of luxury hotels to choose from. Hotel Borg, for example, is a beautiful building located right in the downtown area, with 99 deluxe rooms in the Art Deco style. The Icelandair Hotel Marina overlooks a stunning harbor and is perfect for those with a more refined taste.
5-Star Luxury in Reykjavik
Reyjavik's first five-star hotel opened back in November 2021, after many years of planning and construction. The Reykjavik EDITION by Marriott proudly boasts the honor of being the only five-star accommodation available in Iceland. That's right: the only five-star hotel in the entire country.
This hotel is located on the water next to Harpa concert hall, just minutes from the Old Harbor and Laugavegur shopping street; you could not ask for a better location. Designed by a local architecture firm, the hotel showcases both the country's unique charm and Marriott's sense of style.
Overall, staying at the Reykjavik EDITION is a genuinely incredible experience. Custom-made Italian furniture and work by local Icelandic artists can be seen throughout the building and in each of the suites. Window-facing beds in all 253 rooms allow guests to make the most of the harborside view. The bathroom toiletries come in an exclusive scent designed exclusively for the Reykjavik EDITION.
In other words, if you want the single best place to stay in Iceland, this is probably it.
Where To Stay in Reykjavik With Family
Centerhotels is a chain of a few centrally located three- and four-star hotels within the heart of Reykjavik. They all feature a modern design, popular restaurants, and fantastic views. Fosshotel accommodation, which is spread all across the country, offers the option of beautiful deluxe rooms and suites alongside the chain's standard lodgings.
Where To Stay in Reykjavik on a Budget
Of course, a stay at the Hilton is not possible for everybody, but those traveling with expenses in mind still have many great options. There are hostels and budget guesthouses throughout the city, some located very centrally. Of these, Kex and B47 are within a five-minute walk of the Laugavegur Main Street and are very affordable.
Hostels located slightly away from the center are usually even cheaper. Bus Hostel Reykjavik and Reykjavik Loft HI Hostel are still close enough to downtown to be convenient while being better suited to those on a budget.
Reykjavik also hosts many apartments that visitors can rent, which may suit those staying in the city for longer. The cost usually falls somewhere between a hostel and a higher-end hotel; however, they can often turn out to be the cheapest choice, as you can buy in and prepare food rather than eat out. Due to the cost of food in Reykjavik, staying somewhere such as Apartment K or the Downtown Reykjavik Apartments can end up saving you money.
Rentals in Reykjavik
As is the case with many cities across the world that are undergoing a wave of tourism, Airbnbs have cropped up in many places in Reykjavik. However, while they are often affordable and convenient, you cannot be guaranteed the comfortable, clean stay that you might otherwise expect.
There are no rules against choosing this option, but some local Icelanders may grumble at you for feeding into a phenomenon that is making local rent prices soar, so it may not be wise to broadcast where you're staying.
Cottages and Camping in Reykjavik
The options listed above are, of course, not the only ones. The city hosts a large campsite with many amenities, for example. There are also cottages available for rent in and just outside of the city.
Where To Stay Near Reykjavik
Those who wish to avoid the bustle of the capital can also opt to stay in one of the quieter surrounding towns; the Viking Hotel in Hafnarfjordur, for example, is in a serene location and has beautiful views over the settlement's bay.
Where to Stay Near Keflavik Airport
It may be more convenient for some travelers to stay closer to Keflavik airport. Hotel Keflavik is a four-star institution with a modern vibe and many on-site amenities. Meanwhile, Start Hostel and Alex Guesthouse are much simpler and more affordable, with their own unique charms.
Where To Stay Near the Blue Lagoon
However, those seeking the most luxurious of locations will find no better place than the Silica Hotel in the remote lunar landscape of the Reykjanes Peninsula, located between Reykjavik and Keflavik. Staying here gives you exclusive access to the hotel's private lagoon, free access to the main Blue Lagoon, and the opportunity to pamper yourself with the many massages and treatment services available.
The wealth of options means that, with sufficient planning, you should be able to find what you want in or around Reykjavik. Though the rest of the country doesn't have quite the range of accommodation found in the capital, there are still a lot of options available if you plan to do some traveling.
The Golden Circle is an almost-essential excursion for all travelers to Iceland. Its three incredible locations—the Geysir Geothermal Area, Gullfoss Waterfall, and Thingvellir National Park—are the nation's most popular sites alongside the Blue Lagoon. No trip to Iceland is complete without a visit to the Golden Circle.
Many visitors plan to spend a full day exploring these areas before setting off on the rest of their travels. For this reason, many hotels and hostels have sprung up, allowing visitors to use the Golden Circle as a springboard from which to leave the west of Iceland without needing to return to Reykjavik for the night.
Hotel Borealis is right beside Thingvellir National Park. It offers several different types of accommodation to choose from, including standard rooms, two-bedroom bungalows, and spacious, three-bedroom villas.
The little towns and settlements that dot the west of Iceland also offer plenty of places to stay. The quaint town of Selfoss, for example, has the four-star Hotel Selfoss, with its luxurious spa and quality restaurant for those with a larger budget. As a cheaper alternative, the HI Hostel Selfoss offers a comfortable and pleasant stay.
At Hveragerdi, a settlement known for its geothermal activity, there's a similar range. The Guesthouse Frost and Fire will meet the standards of those with high expectations, while As Guesthouse can accommodate travelers who are more focused on price than luxury. Fludir, a town known for hosting the beautiful Secret Lagoon, has the Icelandair Hotel Fludir, a reasonably priced hotel in a stunning location and featuring an excellent restaurant.
Where To Stay in South Iceland
For those planning on traveling east from the Golden Circle, or even around the whole country, it may be more convenient to finish the day somewhere along the South Coast, further along Iceland's Ring Road. If you are wondering where to stay in southern Iceland, have no fear—there are also many places to stay along this stretch, as the area is becoming increasingly popular with visitors.
The reason for this popularity is the many beautiful locations that can be found just off the road. These include the waterfalls Skogafoss and Seljalandsfoss, the glacier Solheimajokull, and the notorious black-sand beach of Reynisfjara. Thanks to the variety of accommodation and the attractions and activities available nearby, this is one of the best areas to stay in Iceland.
The closest and most convenient location to Reykjavik and the Golden Circle is the tiny settlement of Skogar. Hotel Skogafoss and Hotel Skogar are great places to stay in beautiful areas near the waterfall, all at a reasonable price. However, those on more of a budget have the choice of staying at the HI Hostel Skogafoss, which is in a similarly excellent location, just with a little less luxury.
Where To Stay in Vik
Many traveling the South Coast choose to stay at Vik, a lovely little settlement of around 300 people. The area is highly recommended for its convenience to those heading to the Jokulsarlon glacier lagoon. Still, pre-planning is essential if this is your plan, as the number of places to stay is somewhat limited due to the village's size and popularity.
The reliable Icelandair hotel chain has, sadly, closed its establishment here, but Hotel Katla offers a comfortable stay by a mountainside just a couple of miles outside of Vik. Those on more of a budget have the choice of staying at Puffin Hotel or the even more affordable Puffin Hostel. If you’re looking for a more intimate stay, there are several guesthouses to choose from, such as Guesthouse Carina, Galleri Vik, Arsalir, and Hatun 8.
Another settlement recommended along the South Coast is the historical village of Kirkjubaejarklaustur, nicknamed Klaustur. There's another Icelandair Hotel here and a hotel in the Fosshotel chain a little out of town called FossHotel Nupar. The Klaustur-Hof and Bjork Guesthouses offer a more personal experience, as does the beautiful Glacier View Guesthouse to the west of the village. Klaustur is a lovely place to stay, with many easy hikes to stunning locations.
Towards the eastern side of the South Coast are two stunning areas: the Skaftafell Nature Reserve and the Jokulsarlon glacier lagoon. Because of how unique these places are, it's recommended to spend a separate night closer to them, so you don't have to limit your time at either.
The Skaftafell Nature Reserve is a hiker's paradise; there are many trails to suit all abilities, which take visitors to incredible places such as Skaftafellsjokull glacier and the waterfall Svartifoss. It would be easy to spend all day here soaking up nature, and if that fits into your plans, it very conveniently has its own hotel.
Hotel Skaftafell is simple, with basic amenities such as a bar, restaurant, and Wi-Fi, but alluring due to its breathtaking location and reasonable price. Be sure to book well in advance, however, as this is one of the most popular hotels in the area.
Where To Stay Near Jokulsarlon
If you aren't lucky enough to get a place or wish to settle a little further on, many other options are available closer to Jokulsarlon, the glacier lagoon. Considering that most visitors spend far longer here than they intend to, marveling over the icebergs as they break from a glacial tongue and glide serenely to the ocean, it may be more convenient to stay close by anyway.
The closest lodgings to Jokulsarlon are the Hali Country Hotel and the Gerdi Guesthouse. Both are located within beautiful natural settings and have decent private rooms; all have private bathrooms and some private kitchens.
Fosshotel Glacier Lagoon is a more luxurious choice for those traveling in style and is ideally located between Skaftafell and Jokulsarlon. Not far away are the cozy Nonhamar cabins, which are immersed in nature and perfect for those with a small group seeking seclusion.
Where To Stay in Hofn
For those planning to take the Ring Road further, the most convenient place to stop for the night—with the most options available—is the little town of Hofn, about an hour's drive further east. It has places to suit all tastes and budgets. The HI Hofn Hostel is cheap, simple, and convenient; Hotel Hofn and Hotel Edda Hofn, meanwhile, offer more luxury without being too pricey.
For a more memorable, natural experience, the Lambhus cottages are located in the nearby countryside with incredible views of the Vatnajokull glacier. In contrast, the Apartment by the Sea is a self-catered accommodation with a sweeping panoramic view of the coastline.
A stay in any of these locations in the southeast of Iceland will set you up perfectly for your journey the next day, whether you plan to head back to Reykjavik or on to the incredible East Fjords.
The East Fjords are one of the most remote parts of the country; most of the settlements, nestled between verdant mountains and the beautiful coast, are just little farmsteads or churches. This makes driving up and down the peaks all the more attractive, primarily because the sparsity of humans has led to a surge in other life, such as reindeer, puffins, and seals. However, it can make finding accommodation in the area a bit challenging.
The easiest place to find somewhere to stay is the largest settlement of the East Fjords, Egilsstadir. This lovely town is by Iceland's largest forest, Hallormsstadaskogur, and the beautiful lake Lagarfljot.
The Icelandair Hotel Herad and Hotel Edda Egilsstadir promise to provide you with everything you need at a reasonable price. The Lake Hotel is the most beautifully positioned accommodation in the town and has deluxe rooms that overlook the Lagarfljot for an incredible view.
However, those on a budget do not need to miss out on the incredible scenery the area has to offer. HI Hostel Berunes is a green hostel with a campsite close to Djupivogur before reaching Egilsstadir. On the other hand, HI Husey Hostel is just half an hour north of Egilsstadir. Though basic in its amenities, it's in a stunning, isolated coastal position and is very affordable.
In the nearby Seydisfjordur, there are two more affordable hostels, in Post Hostel and the HI Hafaldan Hostel. This tiny settlement also hosts the 19th-century Hotel Aldan for those with a higher budget looking for a quiet, rustic place to retire. It also hosts the sushi restaurant Nord Austur Sushi, with some of the best sushi to be found worldwide!
Lonsleira Apartments are great for those who prefer a self-catered but still more luxurious option. Some accommodations fall between these in terms of budget. The Old Apothecary and Studio Guesthouses are charming, simple, and reasonable.
The East Fjords are a considerable part of the country; thus, there are more places to stay than those listed. Egilsstadir and Seydisfjordur, however, are positioned so that those traveling the Ring Road can easily make their way to their next destination, in the country's magnificent north.
If traveling through North Iceland, there's one centrally located place with a wealth of options for accommodation: Akureyri. Called “the Capital of the North,” this town is by far the largest settlement outside of the nation's southwest, with a population of nearly 20,000 people. By Iceland's standards, that makes it a metropolis.
Those seeking a luxurious stay will not be disappointed. Located right in the city's heart is one of the best places to stay in Akureyri, the Hotel Kea. Just a couple of hundred yards away is the Lava Apartments Hotel, a beautiful building that has recently refurbished its rooms to make them more welcoming, modern, and chic. Saeluhus is also an upmarket accommodation, providing houses with hot tubs and beautiful studio apartments to suit families, couples, and solo travelers.
On the other end of the scale are some very affordable and charming hostels. Akureyri Backpackers and HI Akureyri Youth Hostel are centrally located, reasonably priced, and very welcoming.
As with Reykjavik, the rest of this article could detail all the options between the higher and lower ends of the market. There are many other guesthouses, hotels, and even cottages available in Akureyri and several nearby campsites. With a bit of planning, it should be no trouble to find a place to stay in the capital of the north.
Where To Stay Near Lake Myvatn
Akureyri, however, is not the only place to stay in this region. There's no better place for guests who want to lodge at a location immersed in nature than the Lake Myvatn area, with its serene waters, steaming geothermal areas, and dramatic lava formations.
Hotel Gigur, Sel Hotel Myvatn, and Hotel Laxa are a few examples of the hotels here, all in breathtaking locations with many services. Many cabins are available to rent, such as those at Dimmuborgir Guesthouse and Vogar Farm Guesthouse, where you are even more integrated into the landscape.
While these options are all reasonably priced for their services, they're still likely to be over the budget of many travelers. The Hlid Hostel is much simpler and more affordable but the only hostel in the area. They also rent out cabins and have a campsite.
If it's fully booked, visitors seeking to be closer to Myvatn can stay at the HI Hostel Arbot or the Husavik Hostel in the nearby whale-watching capital of Europe, Husavik. With just around 2,000 people, this serene town also has more upmarket options, such as Husavik Cape Hotel and Fosshotel Husavik.
Where Else To Stay in North Iceland
Another excellent place to stay in North Iceland is Siglufjordur. This town is famous for its award-winning Herring Era Museum, which details how vital the fishing industry was to the survival of this nation for an entire millennium before industrialization.
Siglo Hotel is one of the most beautiful and luxurious hotels in Iceland, being level with the water and accessible by boat. The rooms are stylishly decorated, and many have an incredible view of the fjord.
Iceland's most famous tourist, Noel, gained international fame when he accidentally spent his first night in Siglufjordur. He drove for over five hours from Keflavik airport to a hotel on the town's Laugavegur street when he was meant to be staying just 50 minutes away on Reykjavik's Laugavegur Main Street; that extra “r” bested both him and his GPS.
Fortunately for him, he was offered a free stay at Hotel Siglo when the locals found out about his mistake, a credit to the helpful nature of Siglufjordur's inhabitants.
If you want to escape the crowds, head a little bit further north and stay at Tungulending guesthouse, a moderately priced guesthouse by one of Iceland's few fossil beaches.
Other settlements in the north that you can stay at are, among others, the quaint fishing village of Dalvik and the beautiful town of Blonduos. There's an advantage to staying in Blonduos if you are traveling further in Iceland, as it brings you closer to your next destinations: the Westfjords and Snaefellsnes Peninsula.
Where to Stay in the Westfjords
Not many travelers have the time to visit the spectacular Westfjords; those who do, however, discover a remote world of incredible beauty. If possible, it's worth spending several days here to see the many awe-inspiring wonders and navigate the breathtaking fjords. Many tourists consider the Westfjords the best area to stay in Iceland.
However, there are very few settlements in the area, and none of them are large; the “Capital of the Westfjords,” Isafjordur, has less than a thousand residents. Thus, pre-booking hotels here is as vital as in the rest of the country.
The two best settlements to stay in or around are Isafjordur, in the northern part of the Westfjords, and Patreksfjordur, in the southern region. For those on a lower budget, approximately 12 miles (just under 20 kilometers) away from Isafjordur is the HI Korpudalur Youth Hostel. Other travelers may also enjoy staying at Guesthouse Aslaug, which has everything from shared accommodation to private rooms.
Hotels similar to this can be found at Patreksfjordur; both Hotel West and Fosshotel Westfjords have a mix of standard and superior rooms. Hotel Breidavik has a range of possible lodgings, from double bedrooms with en suites to shared sleeping bag accommodation.
There are guesthouses in more remote locations across the Westfjords, which can appeal to those who want to find a beautifully peaceful spot far from anyone else. However, keep in mind that most of the accommodation in this region is only open during summer, as many of the roads here are blocked with snow and inaccessible during winter. Information on which roads are open can be found on road.is.
Where To Stay In the Snaefellsnes Peninsula
Like the Westfjords, the Snaefellsnes Peninsula is often overlooked by travelers; it's, however, referred to as a microcosm of the rest of Iceland due to the diverse amount of dramatic scenery concentrated in just one strip of land 56 miles (90 kilometers) long. There are many tiny settlements here, with lodgings to suit various budgets and tastes.
There are several hostels in the area. These include HI Hostel Grundarfjordur, the Harbour Hostel in Stykkisholmur, and the Freezer Hostel in Rif, all providing comfort in beautiful locations at reasonable prices. Freezer Hostel is a little more expensive but often worth the extra cost, as it hosts a performance space where concerts, theatre performances, and comedy shows are regularly held.
There are also many pleasant hotels, such as Hotel Framnes, Fosshotel Hellnar, and Hotel Olafsvik. However, those seeking more elegance will find no better than Hotel Budir. With its remote location, exquisite restaurant, and incredible views of the Snaefellsjokull glacier, it's a perfect place to unwind; it's also known for having a very romantic ambiance, making it ideal for a couple's getaway or even a wedding.
The above places are the most visited in Iceland, but accommodation exists in its most remote reaches too. The Highlands, for example, are rarely seen outside of group hikes, yet there are several places on its edge where you can stay.
The Wilderness Centre, Highland Centre, and Thorsmork Volcano Huts are examples that are open year-round; they invite their guests to explore this incredible region during their days and sleep in comfort at night. The former two also have a range of lodgings, from shared dorms to private rooms, while the latter also has private cottages.
As mentioned earlier, you can spend several weeks in Iceland without ever needing to stay in a hotel or hostel due to the many camping options available. Camping in Iceland can be made easy by taking a self-drive tour in a vehicle with a rooftop tent or traveling in a campervan.
The best places to stay in Iceland are constantly evolving and improving. The demand for accommodation in Iceland is ever-growing, and hotel chains and independent people are racing to keep up with demand. New options are regularly opening, both in Reykjavik and across the rest of the country.
It was mentioned earlier that The Reykjavik EDITION is currently the only five-star hotel in Iceland. This, however, will probably not be the case in the years to come, and other international hotel chains will invariably follow suit.
All in all, Iceland has a wealth of high-standard accommodation to suit all travelers based on their tastes, budgets, and needs. It's only getting better as the industry catches up with demand. Because of this, the whole of this magnificent country has become far more accessible, allowing you to reach and spend time in incredibly remote and awe-inspiring places.
Book well in advance and plan your trip around your lodgings, and you are sure to have a fantastic holiday in our beautiful country.