Are you looking for accommodation in Iceland? Searching for hotels, hostels, guesthouses, apartments, holiday homes, or summer cabins? Then look no further! Read more to find out exactly where to stay in Iceland and how COVID-19 may impact your stay.
Every year, more and more people visit Iceland, to marvel over its incredible natural wonders and to partake in the many exciting excursions on offer. As the tourism industry has boomed, hotels, guesthouses, hostels, and apartments have all opened their doors to meet the ever-increasing demand.
The wealth of choice, however, can make it a bit of a hassle to organize a holiday here, so read ahead for everything you need to know about finding the best places to stay in Iceland.
Iceland has fast become an incredibly popular destination for travelers all around the world. The options for accommodation are extensive, and the standards universally high. At very least, visitors can be guaranteed a bed that is comfortable and clean; even most youth hostels here are more inviting than in much of the rest of the world.
On the other end of the scale, visitors hoping for a grand, no-expense-spared vacation might have to tone down their expectations. Whereas there are upmarket hotels across the country specializing in luxury, you will not yet find a 5-star hotel anywhere in Iceland that compares with international luxury standards. You may not have to wait long, however, as discussed in the last chapter of this article.
While there are many options available and more establishments opening their doors all the time, accommodation in Iceland tends to book up very quickly. Throughout the summer and the Christmas period, the hotels are usually full, and this is becoming the case increasingly during what was once ‘off-peak’ season. Would-be visitors need to make sure they plan their holidays well, at least several months in advance.
This is particularly the case for those traveling around the country. Outside of the greater Reykjavík area and the capital of the north Akureyri, settlements tend to be tiny, and the number of places to stay is limited. If, for example, you are traveling the Westfjords, it can take several hours to get from settlement to settlement; you don’t want to spend a full day driving to, say, Ísafjörður, only to find all of the hotels there fully booked.
Having a well-thought-out travel plan that is easy to execute is essential to make the most of your time in Iceland.
The absolute easiest way to ensure that you have accommodation wherever you are going is to book a self-drive package. This way, all of your preferences and needs will be taken into account, 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, beholden to no one.
You may also choose to camp throughout the summer. Campsites are closed in wintertime and we wouldn't recommend camping anywhere in Iceland during winter! During summer though, it is cheaper and requires less booking in advance. It is still a good idea to check the availability of different campsites in case an event is going on in the area, as they do fill up occasionally.
Many Icelanders also have a second home, a so-called summer cabin. Although it's called a summer cabin, it's also perfectly acceptable as a winter cabin and many of these cabins can be rented out as a whole, giving you a truly authentic Icelandic experience.
Iceland's cabins or cottages vary greatly in size and amenities (many of them have an outdoor hot tub, perfect to relax in and watch the Northern Lights in winter), and the best way to check out what's available is by heading to bungalo.com where rental cabins all over Iceland are listed.
Iceland has a wealth of hotels and guesthouses open to tourists, particularly now that all the national restrictions, such as maximum capacities and mask mandates, have been lifted. The country is fast on its way to normalcy, with around 400,000 vaccines administered for a population of 350,000 as of the end of June 2021, and many accommodations are hoping to fill their rooms and suites once more with eager travelers.
To get to Iceland without having to worry about quarantine or proving negative test results is becoming ever easier. If you are vaccinated, immune due to antibodies from a past infection, or from one of several approved countries, you simply need to fill in a pre-registration form before arrival.
In spite of Icelandic hotels and guesthouses no longer being bound to strict restrictions, all will be cleaned thoroughly between uses to ensure that the country can continue its journey towards completely overcoming the virus.
You can read about the current COVID-19 status in Iceland, the detailed border policy, and our friendly cancellation policy on our comprehensive COVID-19 information page.
Iceland’s capital city of Reykjavík has by far the broadest range of accommodation in the country, to suit all budgets and needs. Whether traveling on a shoestring or looking for a lavish getaway, you are sure to find the place for you.
Those without a tight budget have a huge 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 our stunning harbour and is also perfect for those with a more refined taste.
Centerhotels are a chain of a few centrally located 3-4 star hotels within the heart of Reykjavík, with modern design, popular restaurants and/or views to die for. Establishments in the Fosshótel chains, which like many of the nation's hotel chains, are spread all across the country, have beautiful deluxe rooms and suites alongside their more standard lodgings.
Of course, a stay at the Hilton is not possible for everybody, but those travelling with expense in mind still have many great options. There are hostels and budget guesthouses throughout the city, some of them located very centrally. Kex, B47 and 101 Hostels are all within a five-minute walk of the Laugavegur Main Street and are all very affordable.
The hostels slightly away from the centre, however, are usually even cheaper. Bus Hostel Reykjavík and HI Reykjavík City Hostel are still close enough to downtown to be convenient, while better suited those on a budget. The Capital Inn also fits into this category but has more upmarket rooms for those who have a little more to spend.
Reykjavík also hosts many apartments that can be rented by visitors, which may suit those staying in the city for longer. While the cost usually falls somewhere in between a hostel and higher-end hotel, the overall result can often be that a stay in one is the cheapest option, as you can buy in and prepare food rather than eating out. With the cost of food in Reykjavík, staying somewhere such as Apartment K or the Downtown Reykjavík Apartments can actually end up saving you money.
As with many cities across the world undergoing a wave of tourism, ‘AirBnBs’ have cropped up in many places. While often affordable and convenient, you cannot be guaranteed the comfortable, clean stay that you would otherwise be assured of.
There are no rules against going down 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 what you’re doing.
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. 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 Hafnarfjörður, for example, is in a serene location and has beautiful views over the settlement’s bay.
Photo Credit: Regína Hrönn Ragnarsdóttir
It may be more convenient to stay closer to Keflavík airport for some travellers. Hotel Keflavík and Icelandair Flughotel are four-star institutions with a modern vibe and a wealth of on-site amenities; Start Hostel and Alex Guesthouse, meanwhile, are much simpler and more affordable, both with their own unique charms.
Those seeking the most luxurious of locations, however, will find no better place than the Silica Hotel, in the remote lunar landscape of the Reykjanes peninsula between Reykjavík and Keflavík. Staying here gives you exclusive access to a private Blue Lagoon and free access to the main one, as well as 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 exactly what you want in or around Reykjavík. Though the rest of the country doesn’t have quite the range of the capital, there is still a lot of choice if you plan to do some travelling.
The Golden Circle is an almost essential excursion for all travellers to Iceland. Its three incredible locations - the Geysir Geothermal Area, Gullfoss Waterfall, and Þingvellir National Park - are the nation’s most popular sites alongside the Blue Lagoon.
Many visitors plan a full day exploring these areas, before setting off on the rest of their travels. Many hotels and hostels, therefore, have cropped up so those exploring the country can use the Golden Circle as a springboard from which to leave the west, without needing to return to Reykjavík for the night.
Many of these hotels are right beside the locations themselves. At Geysir, for example, you can stay at Hotel Litli Geysir; the Geysir Cottages can also be booked from May to October. In 2018, there will be a four-star hotel here as well.
A little down the road, closer to the waterfall, is the cosy, competitively priced Hotel Gullfoss. Hotel Borealis, meanwhile, located right beside Þingvellir National Park, has several different types of accommodation to choose from, with standard rooms, two-bedroom bungalows, and spacious, three-bedroom villas.
The little towns and settlements that dot the West of Iceland also have plenty of options when it comes to places to stay. The quaint town of Selfoss, for example, has the four-star Hotel Selfoss, with a luxurious spa and quality restaurant, for those with a higher budget. The HI Hostel Selfoss, meanwhile, is comfortable and pleasant while being simpler and cheaper.
At Hveragerði, a settlement known for its geothermal activity, there is a similar range; the Guesthouse Frost and Fire will meet the standards of those with high expectations, whereas Ás Guesthouse meets the needs of those more focused on price than luxury. Flúðir, a town known for hosting the beautiful Secret Lagoon, has the Icelandair Hotel Flúðir, which is in a stunning location, has an excellent restaurant, and is reasonably priced.
For those planning on travelling east, or around the whole country, it may be more convenient to finish the day somewhere along the South Coast, further along the ring-road. There are also a wealth of places to stay along this stretch, as the area is increasingly popular amongst visitors. The reason for this are the many beautiful locations just off the road, including but not limited to the waterfalls Skógafoss and Seljalandsfoss, the glacier Sólheimajökull, and the notorious black sand beach of Reynisfjara.
The closest and most convenient location to Reykjavík and the Golden Circle is the tiny settlement of Skógar. Hotel Skógafoss, Hotel Skógar and Hotel Edda Skógar are great places to stay, in beautiful locations near the waterfall, all at a reasonable price. Those on more of a budget, however, have the option of staying at the HI Hostel Skógafoss, which is in a similarly excellent location, just with a little less luxury.
Many travelling the south coast intend to stay at Vík, a lovely little settlement of just around 300 people. The area is highly recommended for its convenience to those heading to the Jökulsárlón glacier lagoon, but pre-planning is essential if this is your intention, as the number of places to stay is somewhat limited due to the village’s size and popularity.
The reliable Icelandair and Edda hotel chains, however, both have establishments here, and Hotel Katla offers a comfortable stay by a mountainside just a few km out of Vík. Those on more of a budget have the options of staying at Puffin Hotel or the even more affordable Puffin Hostel. If seeking a more intimate stay, there are several guesthouses to choose from, such as Guesthouse Carina, Galleri Vík, Ársalir and Hátún 8.
Another settlement recommended along the South Coast is the historical village of Kirkjubæjarklaustur, nicknamed Klaustur. There is another Icelandair Hotel here, and a hotel in the Fosshotel chain a little out of town called Foss Hotel Núpar. 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 some stunning locations.
Towards the eastern side of the South Coast are two incredibly beautiful areas: the Skaftafell Nature Reserve, and the Jökulsárlón glacier lagoon. Because of how special these places are, it is 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 Skaftafellsjökull glacier, and the waterfall Svartifoss. It would be easy to spend all day here, absorbing the 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 wifi, but alluring due to its breathtaking location and quite reasonable price. Be sure to book well in advance, however, as this is one of the most popular hotels in the area.
If you aren’t lucky enough to get a place or wish to settle a little further on, there are many other options available closer to Jökulsárlón, the glacier lagoon. Considering that most visitors spend far longer here than they intend to, marvelling 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 Jökulsárlón are the Hali Country Hotel and the Gerði Guesthouse. Both of these are located within beautiful natural settings, and have decent private rooms; all come with private bathrooms, and some private kitchens.
Fosshotel Glacier Lagoon is a more luxury option for those travelling in style, and perfectly located between Skaftafell and Jökulsárlón. Not far away are the cosy Nónhamar cabins, which are immersed in nature and perfect for those with a small group seeking seclusion.
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 Höfn, about an hour's drive further east. It has places to suit all tastes and budgets. The HI Höfn Hostel is cheap, simple, and convenient; Hotel Höfn and Hotel Edda Höfn, meanwhile, offer more luxury without being too pricey.
For a more special, natural experience, the Lambhús cottages are located in the nearby countryside with incredible views of Vatnajökull glacier, whereas 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 Reykjavík, 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 beautiful, especially because the sparsity of humans has led to a surge in other life, such as reindeer, puffins and seals. It can make finding accommodation in the area, however, a bit challenging.
The easiest place to find somewhere to stay is the largest settlement of the East Fjords, Egilsstaðir. This lovely town is located right by Iceland's largest forest, Hallormsstaðaskógur, and the beautiful lake Lagarfljót.
The Icelandair Hotel Hérað and Hotel Edda Egilsstaðir 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 Lagarfljót for an incredible view.
Those on a budget do not need to miss out of the great scenery the area has to offer, however. HI Hostel Berunes, is a green hostel with a campsite that can be found close to Djúpivogur, before reaching Egilsstaðir. On the other hand, HI Husey Hostel is just half an hour north of Egilsstaðir, and though basic in its amenities, is in a stunning, isolated coastal position, and is very affordable.
In the nearby Seyðisfjörður, there are two more affordable hostels, in Post Hostel and the HI Hafaldan Hostel. This little 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 Norð Austur Sushi, with some of the best sushi to be found worldwide!
Lónsleira Apartments are great for those who would prefer a self-catered, but still more luxurious, option. There are also accommodations that fall between these in terms of budget; the Old Apothecary and Studio Guesthouses are both charming, simple and reasonable.
The East Fjords are a huge part of the country; thus there are more options for places to stay than those listed. Egilsstaðir and Seyðisfjörður, however, are both positioned so that those travelling the ring-road can easily make their way to their next destination, in the country’s magnificent north.
If travelling through the north of Iceland, there is one place which is centrally located 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 south-west, with a population of nearly 20,000 people. By Iceland’s standards, it is a metropolis.
Those seeking a luxurious stay will not be disappointed. The Lava Apartments Hotel is located in a beautiful building downtown and has newly refurbished its rooms to make them more welcoming, modern, and chic. Sæluhús is also an upmarket accommodation, providing houses with hot tubs and beautiful studio apartments to suit families, couples, and solo travellers.
On the other end of the scale are some very affordable, and very pleasant, hostels. Akureyri Backpackers and HI Akureyri Youth Hostel are both centrally located, reasonably priced, and very welcoming.
As with Reykjavík, the rest of this article could be used to detail all the options in between the higher and lower ends of the market. There are many other guesthouses, hotels, and even cottages available, as well as several nearby campsites. With a little planning, it should be no trouble to find a place to stay in the capital of the north.
Akureyri, however, is not the only place to stay in this region. For guests who want to lodge at a location immersed in nature, there is no better place than the Lake Mývatn area, with its serene waters, steaming geothermal areas, and dramatic lava formations.
Hótel Gígur, Sel Hótel Mývatn, and Hotel Laxá are but a few examples of the hotels here, all in incredibly beautiful locations with a wealth of services. There are also many cabins 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 are still likely to be over the budget of many travellers. The Hlíð 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 is fully booked, visitors seeking to be closer to Mývatn can opt to stay at the HI Hostel Árbót in the nearby whale-watching capital of Europe, Húsavík, or else the Húsavík Hostel. This serene town, with just around 2000 people, also has more upmarket options, such as Húsavík Cape Hotel and Fosshotel Húsavík.
Another excellent place to stay in North Iceland is Siglufjörður. 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 millennium it existed before industrialisation.
Sigló Hotel is one of the most beautiful and luxurious hotels in all of Iceland, being on level with the water and accessible by boat. The rooms are stylishly decorated, and many have an incredible view of the fjord. The town also has the HI Hostel Siglufjörður for those on a smaller budget.
Iceland's most famous tourist, Noel, gained international fame when he accidentally spent his first night in Siglufjörður. He drove for over five hours from Keflavík airport to a hotel on the town's Laugarvegur street, when he was meant to be staying just fifty minutes away on Reykjavík's Laugavegur Main Street; both he and his GPS were bested by that extra 'r'.
Fortunately for him, he was offered a free stay at Hotel Sigló when the locals found out about his mistake, a credit to the helpful nature of Siglufjörður'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 it is possible to stay at are, amongst others, the quaint fishing village of Dalvík and the beautiful town of Blönduós. There is an advantage to staying in the latter if you are travelling further in Iceland, as it brings you closer to your next destinations: the Westfjords and Snæfellsnes Peninsula.
Not many travellers have the time to visit the spectacular Westfjords; those who do, however, discover a remote world of incredible beauty. If possible, it is worth spending several days here, to see the many awe-inspiring wonders and navigate the breathtaking fjords.
There are very few settlements in the area, however, and none of them large; the ‘Capital of the Westfjords’, Ísafjörður, 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 Ísafjörður, in the northern part of the Westfjords, and Patreksfjörður, in the southern part. Less than 20km from the former is the HI Korpudalur Youth Hostel for those on a lower budget; such travellers may also enjoy staying at Guesthouse Áslaug, which has everything from shared accommodation to private rooms.
Hotels similar to this can be found at Patreksfjörður; both Hotel West and Fosshotel Westfjords have a mix of standard and superior rooms. Hotel Breiðavík 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. Keep in mind, however, 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.
Like the Westfjords, the Snæfellsnes Peninsula is often overlooked by travellers; it is, 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, 90 km long. There are many little settlements here, with lodgings to suit a range of budgets and tastes.
There are several hostels in the area. These include HI Hostel Grundarfjörður, the Harbour Hostel in Stykkishólmur, 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 Ólafsvík. Those seeking more elegance will find no better than Hotel Búðir, however. With its remote location, exquisite restaurant, and incredible views of Snæfellsjökull glacier, it is a perfect place to unwind; it is also known for having a very romantic ambience, 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 visited outside of group hikes, yet there are several places on its edge where you can stay.
The Wilderness Centre, Highland Centre and Þórsmörk 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 selection 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 else by travelling in a campervan.
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 opening regularly, both in Reykjavík and across the rest of the country.
It was mentioned earlier that luxury, 5-star hotels do not yet exist in Iceland. This, however, will not be the case in the years to come. Right by Reykjavík's beautiful concert hall Harpa, a Marriott Hotel is under construction. This will be part of their 'EDITION' range, which specialises in sophistication and luxury, and will hopefully be complete in 2019. It is planned to have 250 rooms, a spa, restaurants and conference rooms.
The Blue Lagoon is also extending its accommodation options to include a luxury hotel with 74 new rooms. Considering the incredible location, and the fact that the Blue Lagoon itself is already the epitome of luxury, this promises to meet the needs of those expecting the highest quality lodgings possible. It is planned to be opened this year, in 2017.
All in all, Iceland has a wealth of high standard accommodation, to suit all travellers based on their tastes, budgets and needs. It is 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 an amazing holiday in this beautiful country.