Where to Stay in Reykjavik

Where to Stay in Reykjavik

Verified Expert

Reykjavík has a huge wealth of accommodations, suiting all budgets.

Where are the best places to stay in Reykjavík? Does the accommodation in Reykjavík suit people of all budgets? How early do you need to book before arrival? Continue reading for all you need to know about the range of accommodation in Iceland’s capital.

With the tourism boom that Iceland is currently undergoing, a wealth of hotels, hostels, and guesthouses have sprung up across the country to meet the ever-growing demand. In Reykjavík, new accommodation is continuously under construction. There is now such a wide range of options that the choice can be a little overwhelming, even if you are looking for places with a specific budget.

The best accommodation for you depends entirely on what you seek to get out of your stay. For those who want the freedom to explore the city on a whim, a downtown hotel or hostel will place you right in the middle of it all. However, if you are planning on using your accommodation only as a base, there are plenty of simple options on the outskirts of Reykjavík that might better suit your needs.

Reykjavík is a beautiful city; thankfully, many hotels and hostels are right in the middle of everything.

If you seek luxury and relaxation, there are boutique hotels with spas; if you need a bed at a low cost, there are many hostels. Regardless of what you want, be sure to book well in advance—even though new rooms are opening all the time, they fill up just as quickly.

Comfort Hotels

For families, couples, business travelers, and individuals seeking comfort on their stay but not an extravagance, there are a wealth of options in Reykjavík. The accommodations listed here all have private bedrooms and bathrooms, decent amenities, and good service, without lavish additions such as spas.

Hotel Klettur

Hotel Klettur is a great place to stay in Reykjavik.Photo from Hotel Klettur

Located near the Hlemmur Square bus station is Hotel Klettur, an affordable yet comfortable place to stay in the city. The interior is beautifully designed, inspired by the fascinating rock formations found across Iceland, and executed with a clean, stylish finish. A large boulder that many believe is an elf home remains on the ground floor to help recreate the mysticism of Iceland’s nature.

Hotel Klettur has many comfortable single and double rooms, three family rooms that can hold up to five, and eighteen superior rooms, five with balconies boasting stunning views across the capital. It also has many facilities on-site, including a lounge area and game room, with a television for children to entertain themselves with while the adults relax over a game of pool or table football. There is a bar open from 16:00 to 22:00, with a happy hour from 18:00 to 20:00.

Breakfast is included in the price, and free parking is offered right outside. 

City Center Hotel

City Center Hotel is a hotel in Reykjavik.Photo from City Center Hotel

Describing itself as ‘by far the best three-star hotel in Iceland,’ City Center Hotel has a lot to back its claim. Its convenience, for one, is incredibly notable. It is located on Austurstræti, in the very heart of Reykjavík, meaning the most popular bars and restaurants are within just a few minutes’ gentle walk.

Its rooms are also worth bragging about. It has thirty, all of which have en-suite bathrooms, soundproofing, blackout curtains for the summer sun, and windows that open. The superior rooms on the upper floors have great city views, and a few even have balconies.

City Center Hotel also has a range of facilities for its guests. There is a bar on the site, a perfect place to either unwind after a long day or gear up for a long night that is open longer than most hotel bars, from 12:00 to 00:00. There is also a gym that guests have full access to without charge and a breakfast buffet that can be opted into for a small cost.

Fosshotels Lind, Baron and Raudara

Fosshotel Baron can be found near Laugavegur.Photo from Fosshotel Baron

Fosshotel is one of the largest hotel chains in Iceland. Of their fifteen establishments, four are in Reykjavík, and none of them is further than a half-hour walk away from the downtown area. While all have differences, each's ethos is the same: to be the friendliest hotel in Iceland.

Three of the Reykjavík Fosshotels are three-star and meet all their guests’ needs; these are Fosshotel Lind, Fosshotel Baron, and Fosshotel Rauðará. All of them are close to Hlemmur Square and within a similar price range.

Fosshotel Lind distinguishes itself by having design and city view rooms, while Baron has 20th Century themed and ocean view rooms. Rauðará is a little further out of town, but closer to Klambratún park, and has a lively bar.

Keahotels: Reykjavik Lights, Skuggi, and Storm Hotels

Storm Hotel is own by Keohotels in Reykjavik.Photo from Storm Hotel by Keahotels 

Keahotels runs five Reykjavík hotels, all with their own distinct character. The two most luxurious locations will be detailed below, but the three-star options are still excellent places to stay and have excellent service.

The Reykjavík Lights Hotel is probably the most unique, being visibly styled after Icelandic history and nature. It blends modern lighting techniques with a chic style to reflect the aurora borealis and midnight sun that make this country spectacular. However, the rooms speak of Iceland’s past, with each one themed after a day in the country’s old calendar.

Reykjavik Center Hotels own Storm Hotel in Iceland.Photo from Reykjavik Lights Hotel by Keahotels

Skuggi Hotel and Storm Hotel still have a great appeal, especially if you want to stay closer to the downtown area. The former is effortlessly elegant in its style. The lobby and rooms are themed after Ragnar Axelsson’s photographs of Icelandic nature, and their smooth, clean design is inspired by the countryside’s lava rock and volcanic ash.

The landscapes of this country also inspire storm Hotel. Here, the softer, smoother colors and textures of nature are used, reflecting Iceland’s Northern Lights, waterfalls, and native moss. It is also notable as it is the only Keahotel where you can book a room with a balcony.

Centerhotels Plaza, Klopp, Skjaldbreid and Midgardar

CenterHotel Plaza is one of four Reykjavik Centre Hotels.Photo from CenterHotel Plaza

Centerhotel has six hotels in Reykjavík, four of which are three stars. Two of these—Centerhotels Plaza and Klöpp—are right in the city center, with the former on the main square, Ingólfstorg. The others—Skjaldbreið and Miðgarðar—are still within easy walking distance.

The location of Centerhotel Plaza makes it a desirable place to stay. Those traveling for business will find first-class conference rooms here. Klöpp combines convenience, comfort, and simplicity, and its bar gets quite lively during happy hour, from 18:00.

Skjaldbreið is located right on Laugavegur, meaning it is the perfect base for those who love shopping. Miðgarðar, though further from the downtown area, is right next to the Hlemmur bus station, making far off destinations much less of a hassle to reach.

All the hotels offer breakfast between 7 and 10 am.

22 Hill Hotel

22 Hill Hotel can be found in Reykjavik. Photo from 22 Hill Hotel

Located about half an hour’s walk from downtown Reykjavík is 22 Hill Hotel. This friendly, cozy establishment offers comfortable rooms that suit most budgets supplied with flat-screen televisions and high-speed internet. The establishment caters to everyone but is especially family-friendly; children under 12 do not get charged extra for fitting into a room with their guardians and can sleep in a foldout bed for free.

Luxury Hotels

If you seek more lavish lodgings than those listed above, the city of Reykjavík can easily accommodate. Although there are currently no five-star hotels in the country, there are many four-star establishments in the capital that should meet your needs.

Fosshotel Reykjavík

Fosshótel Reykjavík is one of the cities biggest hotels.Photo from Fosshotel Reykjavik

Fosshotel Reykjavík boasts a fourth star over its three other counterparts in the city. An imposing, modern building, it is as impressive inside as it is out. With sixteen floors, many of its chic rooms have spectacular views across the capital and bay, the best being those from the tower suites.

Fosshotel earns its extra star with its many unique features. Its bar has a beautiful beer garden that is a pleasure to drink in throughout summer. There is a personal concierge service. Its business facilities, with meeting rooms and conference halls, are first class, and all guests get access to the well-equipped gym.

There is also an on-site restaurant, which serves excellent Icelandic buffets throughout the day, with the chefs preparing the dishes in front of you.

Icelandair Marina Hotel and Hotel Natura

Icelandair Hotel Reykjavik Marina overlooks the Old Harbour.Photo from Icelandair Hotel Reykjavik Marina

Icelandair has two hotels in Reykjavík, which should appeal to those who want to immerse themselves in Icelandic culture and history. The company ensures that the spirit of this country is part of the atmosphere for all guests.

The Icelandair Marina Hotel is located in a beautiful location by the Old Harbor right beside the downtown area, with incredible views over the ocean and wharf.

The hotel interior blends an authentic maritime theme with modern Icelandic design, a style consistent through the common areas and the vast array of different rooms. The building’s previous uses were all related to the fishing industry that used to dominate this part of the city, and this history is visible in the hotel.

This hotel has a theater showing Icelandic films with English subtitles, a gym with a climbing wall, and a restaurant and bar called Slippbarinn with a diverse Icelandic menu, a wide drink selection, and regular entertainment.

Icelandair Hotel Reykjavik Natura has a swimming pool.Photo from Icelandair Hotel Natura

The lobby of Icelandair Hotel Natura, located inside an old airport building, is a showcase of Icelandic design; there are sculptures and art pieces by local artists displayed around the clean, modern room, a consistent theme throughout the building.

Unlike many others across the city, this hotel is in a green space, close to many hiking and biking paths. Some of these trails lead to Reykjavík’s geothermal beach, Nauthólsvík.

Icelandair Hotel Natura is also home to the Sóley Nature Spa. Here, you can enjoy the natural geothermal forces of Iceland without having to leave the hotel, with a steam room, sauna, hot tub, and pool. The spa treatments here are holistic and luxurious, with products that combine essential oils with aromatic, native herbs used in the treatments.

Hilton Hotels

Canopy by Hilton is one of the most luxurious hotels in Iceland. Photo from Canopy by Hilton

There are two Hilton hotels in Reykjavík, the newest of which is the Canopy by Hilton. This boutique hotel brags ‘Just-Right Rooms’ that promise to meet your every need. They have double beds with an extra sofa bed draped in luxuriously soft sheets, 48” televisions, mini-fridges, and high-speed WiFi. They also have suites that include all of the above, with some extra space and a kitchen area. Some rooms are also wheelchair accessible.

The Canopy by Hilton is an excellent place to stay for people traveling for business and pleasure. The former will be grateful for the audio and visual equipment for rent and the meeting rooms. The latter will be thankful for the babysitting service, bicycle rental, and fully-equipped fitness center. However, both groups will undoubtedly find equal pleasure in the complimentary breakfast every morning and the free drink tasting each evening.

The Canopy by Hilton has an excellent location on Smiðjustígur, which is about halfway between the downtown area and Hlemmur bus station and just around the corner from Laugavegur shopping street.

Hiton Reykjavik Nordica has an on site spa.Photo from Hilton Reykjavik Nordica

The Hilton Reykjavík Nordica Hotel and Spa is the original Hilton in Reykjavík and is a luxurious place about half an hour's walk from the downtown area. It has many beautiful rooms, but none more lavish than its executive suites, which offer incredible views over the sea.

The on-site spa is highly acclaimed and comes with many massage and beauty services that guests can book; it also has an adjacent fitness center. Furthermore, the hotel is home to VOX restaurant, which focuses on delivering high-quality, locally sourced Nordic cuisine and a lobby bar with a huge cocktail list.

The Hilton Nordica is an excellent choice for families, couples, and singles on a budget but is more tailored to those traveling for business than even the Canopy. It has eleven meeting rooms, an Executive Lounge, and the option of video-conferencing.

Keahotels Borg and Apotek

Keohotels Borg is an award-winning central hotel in Reykjavik.Photo from Hotels Borg by Keahotels

Keahotels provide some of the highest levels of accommodation that Iceland has to offer. Two of its five hotels, Hotel Borg and Hotel Apótek, rank as four-stars.

Hotel Borg, which opened in 1930, has a grand, historic charm unmatched by any other city accommodation. Though it sits on the same square as Reykjavík’s Parliament and Cathedral, it is still the most imposing building in sight.

It has a luxurious spa, with a hot tub, sauna, steam room, and gym, where guests can receive cleansing beauty treatments such as a seventy-five minute long illuminating facial. Its standard rooms are well-decorated and spacious, and its deluxe rooms and suites even more so.

Apotek Hotel is found in central Reykjavik.Photo from Apotek Hotel Reykjavik by Keohotels

Hotel Apótek has a similar grand facade to Hotel Borg and even more history; it was built in 1917 for use as a pharmacy before it was reimagined into luxurious accommodation.

Although all amenities are what you would expect in a modern, higher-end hotel, its interior maintains this historic feel. Like Borg, it has various plush rooms, including a multi-story tower-suite; the only thing it lacks is the spa. It is also located downtown.

Radisson Blu 1919 and Saga Hotels

Radisson Blu Hótel Saga is a magnificent hotel in Reykjavik.Photo from Radisson Blu Saga Hotel

Radisson Blu Hotels are a high-end chain with two establishments in Reykjavík. Radisson Blu 1919 is located right in the downtown area, in a beautiful historic building, the facade of which contrasts dramatically with the contemporary interior.

There are a vast array of rooms, including suites with personal hot-tubs and business-class rooms. The hotel has three conference rooms, the largest of which sits up to thirty-six people.

Radisson Blu Saga Hotel has lovely views from its windows. Photo from Radisson Blu Hotel

The Radisson Blu Saga Hotel is located just ten minutes’ walk from the center of Reykjavík, in the quieter university area. It is larger than its downtown counterpart and even more tailored to business travelers. It has eight meeting rooms with plasma televisions for video conferencing.

The Saga Hotel, however, also has a vast amount to appeal to those traveling for pleasure. It has everything from standard rooms to a presidential suite, an onsite gym, and three places to eat: Grillið Restaurant, which has some of the best views in the city; the Farmer’s Palace; and Mimisbar and Lounge.

Both hotels provide a breakfast buffet, included in the price of the room. The Radisson Blu hotels are also wheelchair accessible.

Centerhotels Arnarhvoll and Thingholt

CenterHotel Arnarhvoll is one of Iceland's four-star hotels.Photo from Ceneterhotel Arnarhvoll

The two four-star Centerhotels in Reykjavík are beautifully decorated, with a wide range of excellent rooms. Arnarhvoll has rooms with incredible views over the sea, while Þingholt has a better location, right beside Laugavegur.

What makes these two establishments noteworthy are their spas and restaurants. Both have saunas, steam rooms, and hot tubs that guests can relax in. Centerhotel Arnarhvoll also has the Sky Bar, a top-floor restaurant and bar very popular with locals and visitors, particularly during the summer months.

While it has a great menu (and an even better cocktail list), it is not quite as opulent as the á la carte Ísafold Restaurant at Þingholt.


For those on a budget, hostels are the best bet. A wealth of travelers coming to Iceland seek to minimize the cost of their trip; thus, there is a thriving hostel industry. Those listed below are ordered in terms of distance from Ingólfstorg, or Ingólfur’s Square, in the downtown area, not on how much they are recommended.

Reykjavík Downtown Hostel

Nestled between the downtown area and the Old Harbor is the charming, clean and convenient Reykjavík Downtown Hostel. Due to its comfort and location, it was voted the best HI hostel in 2015 and continues to be highly regarded. Guests have computer access, a coffee bar, free WiFi, luggage storage, and a book exchange and can opt for an organic breakfast.

Loft Hostel

HI Loft Hostel is one of the most central hostels in Reykjavik.Photo from HI Loft Hostel

Loft Hostel is located very close to the downtown area on Laugavegur Shopping Street. Clean, modern, and cozy, its bar is a great place to meet new people. It is trendy amongst tourists and locals, particularly in summer, due to its balcony (something few Icelandic bars have). The common room hosts events open to all that are as diverse as concerts, ‘swap-and-drop’ clothing drives, and drag shows.

Kex Hostel

Kex is a hostel popular amongst young people travelling to Iceland.Photo from Kex Hostel

Located in an old biscuit factory, Kex Hostel has an unusual vibe, with its crumbling walls and unconventional layout. Even so, it has all modern amenities and every kind of lodging, from private double rooms with en suites to twenty-person dormitories. This hostel’s main appeal over others is its active live music scene; there are jazz nights every week, and events such as the Reykjavík Folk Festival use it as their venue.

Hostel B47

Hostel B47, beneath the Aurora Borealis.Photo from B47 Hostel

Located in a residential part of 101 Reykjavík, just a few minutes' walk from Laugavegur, you can find B47 Hostel. Clean, comfortable, and very affordable, it has a unique approach with its all-electronic checking in and out (meaning no waiting around) and its use of PINs for getting into the building and rooms.

There is no staff other than those cleaning on-site, although staff and security are easily reached by phone in the face of any problems.

Reykjavík Hostel Village

Reykjavik Hostel Village is affordable and welcoming.Photo from Reykjavik Hostel Village

Just slightly further from town than Hlemmur Square is Reykjavík Hostel Village. With comfortable dormitories and private rooms, shared bathrooms, WiFi, optional breakfast, and 24-hour service, this simple hostel should easily meet budget travelers' needs.

Although not as close to the capital bars and shops as those listed above, everything you wish to walk to can be reached within a half-hour.

Galaxy Pod Hostel

One of the units at Galaxy Pod Hostel.Photo from Galaxy Pod Hostel

For cheap but very unique accommodation, look no further than Galaxy Pod Hostel. While standard beds are available for a lower price, you can elect to instead sleep within a ‘pod,’ a small contained unit with a bed, mirror, privacy curtain, shelf, and locker. Much more comfortable and private than an open dorm, these pods also reflect the quirky originality that Icelanders exhibit all across the city.

Bus Hostel

About half an hour walking distance from Reykjavík’s downtown is Bus Hostel, a quirky and noticeably affordable place out of the city’s hustle and bustle. With private rooms and dorms holding up to twenty-four people, it caters perfectly to those on a budget, whether they want their own space or are happy to share.

Though its location is not central, it is very close to the pleasant park Klambratún, the restaurant and sightseeing location Perlan, and the inner-city forest of Öskjuhlíð.

The Capital Inn

The Capital Inn on a sunny day.Photo from The Capital Inn Reykjavik

An hour’s walk from Reykjavík's downtown, The Capital Inn, is one of the most remote accommodations on this list. It is more notable because there are no particular points of interest surrounding it, other than Kringlan Mall.

It is also one of the cheapest places to stay. It has private rooms with private bathrooms, private apartments for small groups and families, and shared dormitories.

Reykjavík City Hostel

Reykjavik City Hostel is a great place to stay by Laugadalur.Photo from Reykjavik City Hostel

Located at Laugardalur Park, right beside the campsite mentioned below, is Reykjavík City Hostel. Although an hour’s walk from the downtown area, it is right beside the largest swimming pool in Iceland, Laugardalslaug, as well as the Family Park and Zoo and the botanical gardens. It is also the best place to stay for those who want indoor accommodation right next to Secret Solstice, although you will need to book well in advance if this is your plan.

Other Options

Experienced travelers will know that hotels and hostels are not the only accommodation choices on holiday. You could take many other routes, so continue reading to learn which are recommended and which are not.

Reykjavík Campsite

There is one campsite in Reykjavík, located at Laugardalur Park, approximately one hour’s walk from the downtown area. For those who love the great outdoors and are on a budget, there is no better option.

This park also hosts the Secret Solstice festival every June, so attendees who don’t want to miss a second of the action would also be wise to book here. The campsite is opened throughout the year but is a lot more comfortable in summer.

The site has a wealth of amenities, catering to every need, including internet and convenient access. You can elect to stay in tents, campervans or caravans, all of which you can rent in the city, as well as cabins if you plan on being there for more than three nights.

As mentioned above, Laugardalur Park is a great place to stay due to its proximity to the pool Laugardalslaug and its adjoining gym.


A guesthouse in Reykjavik is a great choice of accommodation.Photo from Freyja Guesthouse

If you seek a more personal experience than a hotel, hostel or campsite can offer, there are dozens of guesthouses all around Reykjavík from which to choose. For example, Aurora Guesthouse is the closest you can stay to Hallgrímskirkja church, while 101 Guesthouse will put you right on Laugavegur; and Central Guesthouse Reykjavík sits beside the downtown area, to name but a few.

Of course, guesthouses have fewer rooms than even the smallest of the venues listed above, so again, booking far in advance is essential.


If you wish to be away from the hustle and still have your own space while staying in the Reykjavík area, renting a bungalow may be your best bet.

Couchsurfing and Airbnb

Those who regularly travel on a budget know that couch-surfing and Airbnb are trending worldwide, and Iceland is no exception. While couch-surfing is uncontroversial enough, Airbnb is very unpopular amongst the locals due to its effect on rent and downtown services and is thus discouraged.

While it is a legitimate choice for you to make, you cannot be guaranteed the comfort and services you are assured of when booking a hotel or hostel, the standards of which are high even in budget establishments. 

There are a wealth of places in Reykjavík for those on a budget over AirBnB.

Reykjavík’s hotel infrastructure has responded and continues to respond to the increasing influx of tourists in Iceland. There are several places to stay, suiting all tastes and budgets, which is only growing.

The most important thing to remember while booking, however, remains the fact that you need to do so well in advance. For the past few summers, all accommodation in Reykjavík has been occupied, so do not let your holiday be compromised because your favored hotel is full.

The other thing to remember is that no matter where you stay, all official accommodations in the capital are at a high standard. Each will serve as more than a suitable base for you to start exploring this marvelous country.