Where to Stay in Reykjavik

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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 tourist 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 constantly under construction and there is now such a wide range 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. If you are planning, however, 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 simply 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 travellers and individuals seeking comfort on their stay but not 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, before Hallgrímskirkja church.Photo Credit: Hotel Klettur

Located near to Hlemmur Square bus station is Hotel Klettur, an affordable yet comfortable and convenient 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. To help recreate the mysticism of Iceland’s nature, a large boulder remains on the ground floor which many believe is an elf home.

Hotel Klettur has many comfortable single and double rooms, three family rooms which 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, 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 right in the middle of the downtown area.Photo Credit: 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, which is 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 Centre 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; it 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 is one of four Fosshotels in Reykjavík.Photo from Fosshotel

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

Three of the Reykjavík Fosshotels are three star, and meet the needs of all their guests; 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

As can be seen in this picture, the effects of light on the Reykjavík Lights Hotel add to its charm.Photo from Reykjavík Lights Hotel

Keahotels runs five Reykjavík hotels, all with their own, distinct character. The two most luxurious of them will be detailed below, but the three-star options are still excellent places to stay, being comfortable and boasting 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 so spectacular; the rooms, however, speak of Iceland’s past, with each one themed after a day in the country’s old calendar.

Storm hotel has a clean, stylish vibe.Photo from Storm Hotel

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 you will be able to see the inspiration of lava rock and volcanic ash in the smooth, clean design.

Storm Hotel is also inspired by the landscapes of this country, although more by the softer, smoother colours and textures of nature, reflecting the 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 the largest of the six in Reykjavík.Photo from Centerhotels

Centerhotel has six hotels in Reykjavík, four of which are three stars. Two of these—Centerhotels Plaza and Klöpp—are right in the city centre, 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 travelling 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, and 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 is a little out of the downtown, but still within easy walking distance.Photo from 22 Hill Hotel

Located about half an hour’s walk from downtown Reykjavík is 22 Hill Hotel. This friendly, cosy establishment offers comfortable rooms that suit most budgets, which are 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 (two are, however, under construction), there are many four-star establishments in the capital that should meet your needs.

Fosshotel Reykjavík

Foss Hotel Reykjavík in the evening.Photo from Fosshotel

Fosshotel Reykjavík boasts a fourth star over its three other counterparts in the city. An imposing, modern building, it is quite as impressive inside as it is out. With sixteen floors, many of the 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 special features. Its bar has a beautiful beer garden that it 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

The exterior of the Hotel MarinaPhoto from Icelandair hotels

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 Harbour right beside the downtown area, with incredible views over the ocean and wharf.

The 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 previous uses of the building were all regarding the fishing industry that used to dominate this part of the city, and the history is clearly visible.

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

Icelandair Natura Hotel is in an old airport building, surrounded by green spaces.Photo from Icelandair Hotels

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 dotted around the clean, modern room, the theme of which is consistent throughout the building.

This hotel, unlike many others across the city, is in a green space, and close to many hiking and biking paths, some of which 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

The Canopy by Hilton is in a beautiful building and convenient setting.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’, which promise to meet your every need; they have double beds with an extra sofa bed, which are draped in luxuriously soft sheets, 48” televisions, mini-fridges and high-speed wifi. They also have suites, which have all of the above, with some extra space and a kitchen area. There are also rooms that are wheelchair accessible.

The Canopy by Hilton is an excellent place to stay for people travelling for both business and pleasure; the former will be grateful for the audio and visual equipment for rent and the meeting rooms, while the latter will be grateful for the babysitting service, bicycle rental, and fully-equipped fitness centre. Both groups, however, will no doubt find equal pleasure in the complimentary breakfast every morning and free drink tasting each evening.

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

The Hilton Nordica is Reykjavík's original Hilton.Photo from Hilton Reykjavík 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 boast 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 centre. 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 list of cocktails.

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

Keahotels Borg and Apotek

Hotel Borg is one of the most grandiose to look upon.Photo from Hotel Borg

Keahotels provide some of the highest level of accommodation that Iceland has to offer. Two of its five hotels, Hotel Borg and Hotel Apótek are ranked with four-stars.

Hotel Borg, opened in 1930, has a grandiose, historic charm that is unmatched by any other accommodation in the city; 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.

Hotel Apotek is quite as impressive as Borg.Photo Credit: Hotel Apotek

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.

It’s interior maintains this historic feel, although all amenities are what you would expect in a modern, higher-end hotel. Like Borg, it has variety of 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 1919 Hotel, lit in the colours of the auroraPhoto from Radisson Blu 1919 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.

From the entrance of Radisson Blu Saga Hotel.Photo from Radisson Blu Saga Hotel

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

The Saga Hotel, however, also has a vast amount to appeal to those travelling for pleasure. It has everything from standard rooms to a presidential suite, an onsite gym, and three places to eat: Grillið Restaurant, which boasts 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, with its popular Sky Bar.Photo from Centerhotel Arnarhvoll

The two four-star Centerhotels in Reykjavík are beautifully decorated, with a wide range of excellent rooms. Arnarhvoll boasts rooms with incredible views over the sea, while Þingholt boasts 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 alike, 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 which can be found at Þingholt. 


For those on a budget, hostels are the best bet. A wealth of travellers coming to Iceland are seeking to minimise 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

The alley to the courtyard of the Reykjavík Downtown HostelPhoto from Reykjavík Downtown Hostel

Nestled between the downtown area and the Old Harbour 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 it continues to be highly regarded. Guests have computer access, a coffee bar, free wifi, luggage storage and a book exchange, and can opt into an organic breakfast.


Loft Hostel has a beautiful balcony, with great views of the city.Photo from Loft Hostel

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


Kex has a sheltered beer garden, usable throughout the year.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. The main appeal of this hostel 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.

Hlemmur Square

Hlemmur Square is located right at the main bus station.Photo from Hlemmur Square

Although about fifteen minutes’ walk from the downtown area, Hlemmur Square Hotel and Hostel is still in a great location, right at Reykjavík’s main bus station. With eighteen private rooms and two floors of dormitories, it caters to guests of all budgets. The ground floor hosts a popular bar that serves as an excellent meeting point, and an artisan sausage restaurant called Pylsa.

Hostel B47

Hostel B47 in winter.Photo from Hostel B47

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 in the sense that checking in and out is all done electronically (meaning no waiting around), and getting into the building and rooms is done with pins.

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

Reykjavík Hostel Village

Reykjavík Hostel Village is spread across several buildings.Photo from Reykjavík Hostel Village

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

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

Bazaar Oddsson

The view from Oddsson.View from the front of the hostel. Photo from Bazaar Oddsson

Bazaar Oddsson Hostel is located about twenty minutes east of the downtown area, in a quiet corner of Reykjavík. Its coastal location is beautiful, as just outside the front door is a great view of Faxaflói bay and the capital’s shore. It is also reasonably close to the scenic Grótta Lighthouse.

Oddsson’s charm comes from its quirky, arty decor, and its Italian-style bistro with a wide choice of beers. There are hotel rooms with private bathrooms alongside the shared dormitories, and the establishment prides itself on providing hotel-level service for all guests regardless of their lodgings.

Galaxy Pod Hostel

Inside of a Galaxy Pod.Photo from Galaxy Pod Hostels

For a 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

The front of Bus Hostel on a pleasant day.Photo from Reykjavík 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

Capital Inn, on the outskirts of Reykjavík, is still within walking distance of downtown.Photo from Capital Inn

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

It is also, however, 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

Reykjavík City Hostel immerses you in the nature more than most other places.Photo from Reykjavík City Hostel

Located at Laugardalur Park, right beside the aforementioned campsite, is Reykjavík City Hostel. Although an hour or so’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 will need to be booked well in advance if this is your plan.

Other Options

Experienced travellers will know that hotels and hostels are not the only choices of accommodation when you are on holiday. There are many other routes you could take, so continue reading for which are recommended, and which are not.

Reykjavík Campsite

Reykjavík Campsite is near a great pool and gym facilities.Photo from 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 obviously a lot more comfortable in summer.

The site has a wealth of amenities, catering to every need, including internet and accessible 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. 


Centric Guesthouse Reykjavík is one of dozens and dozens of guesthouses.Photo from Centric Guesthouse Reykjavík

If you are seeking a more personal experience than a hotel, hostel or campsite can offer, there are dozens of guesthouses all around Reykjavík to choose from. Aurora Guesthouse, for example, is the closest you can stay to Hallgrímskirkja church; 101 Guesthouse will put you right on Laugavegur; and Central Guesthouse Reykjavík is 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.


One such bungalow, available for rent.Photo from bungalo.com

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. For a full list of the bungalows around the capital, see bungalo.com.

Couchsurfing and AirBnB

Those who regularly travel on a budget know that couchsurfing and AirBnB are both trending worldwide, and Iceland is no exception. While couchsurfing is uncontroversial enough, AirBnB is very unpopular amongst the locals, due to the effect it is having 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 a wealth of places to stay, suiting all tastes and budgets, and this 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 favoured hotel is full.

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