Looking for the perfect place to stay in Iceland? Iceland offers various accommodation options that cater to all types of travelers. Read this guide to find out where to stay in Iceland.
Whether you're looking for hotels, cozy cottages, apartments, guesthouses, or budget-friendly hostels, you can find the ideal place to serve as a base for your adventures.
Deciding where to stay in Iceland may also depend on transportation means. Many travelers opt to rent a car or enjoy self-drive tours, allowing flexibility in where you stay and explore. Whether you prefer staying in Reykjavik or venturing into the countryside, lodging in Iceland is plentiful along the scenic routes, including the famous Ring Road.
Continue reading to discover the top Iceland accommodation options. You’ll also find tips on the best locations to stay based on your itinerary, along with recommendations for booking in advance to make the most of your Icelandic adventure.
-
Find the: Best Hotels in Downtown Reykjavik
-
See also: How Many Days to Spend in Iceland
Key takeaways:
-
Diverse accommodation options: When deciding where to stay in Iceland, you’ll find many options, from luxury hotels and boutique guesthouses to budget-friendly hostels and remote countryside lodges.
-
Reykjavik vs. countryside: Staying in Reykjavik provides easy access to cultural attractions, dining, and nightlife, while countryside accommodations offer stunning nature views and proximity to Iceland’s top attractions.
-
Best regions to stay: The best location depends on your itinerary. The South Coast is ideal for waterfalls and black sand beaches, the Golden Circle offers easy access to famous sites, and the North and East provide more secluded, off-the-beaten-path experiences.
-
Seasonal considerations: Winter travelers may prefer staying in cities for easier road access, while summer visitors can take advantage of remote stays with midnight sun views.
Where To Stay in Reykjavik
Iceland's capital city of Reykjavik has some of the best hotels in the country, whether you're traveling on a shoestring budget or looking for a lavish getaway.
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 Reykjavik hotel options. Hotel Borg, for example, is a beautiful building located right in the downtown area, with 99 Art Deco-style rooms.
The Berjaya Reykjavik Marina Hotel overlooks a stunning harbor and is perfect for those with a more refined taste.
-
Try the Best Restaurants in Reykjavik during your stay
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.
CenterHotel Laugavegur is particularly central, located on the shopping street of Laugavegur.
Slightly outside the center are other plush options, such as the Hilton Reykjavik Nordica or Exeter Hotel, the latter of which is located close to the old harbor of Reykjavik.
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. Two of them, KEX Hostel and Hostel B47, are within a five-minute walk of Laugavegur Main Street and are pretty affordable. HI Loft Hostel is located on the main street itself.
Hostels located slightly away from the center are usually even cheaper. Bus Hostel Reykjavik is better suited to those on a budget but still close enough to downtown to be convenient.
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. You can simply rent camping equipment such as tents and sleeping bags, so you won't have to pack them in your luggage.
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 and book accommodation in Kopavogur or rent a room in Hafnarfjordur hotels.
For example, the Hotel Vellir in Hafnarfjordur is in a serene location with beautiful views over the settlement's bay.
Where To Stay Near the Blue Lagoon
Staying in hotels in Keflavik will make it relatively easy to access the Blue Lagoon and pamper yourself with the many massages and treatment services available.
The Diamond Suites is a great example of a luxury accommodation. The Konvin Hotel is more tailored to travelers looking for something affordable.
Check out the wide selection of hotels near the Blue Lagoon, and make sure to book your admission to the Blue Lagoon ahead of time, as it is a very popular destination.
Where to Stay in the Golden Circle
The Golden Circle is an 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 Iceland 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.
To stay close to these great natural wonders, check out the range of accommodations in the Golden Circle. Many of these hotels are right beside the locations themselves. At the Geysir Hot Spring, for example, you can stay nearby at Hotel Geysir or Litli Geysir Hotel.
Where To Stay Near the Golden Circle
The little towns and settlements that dot the west of Iceland — like quaint Selfoss and Hveragerdi, a settlement known for its geothermal activity — also offer plenty of places to stay. Plan to stop on your Golden Circle tour at one of these Selfoss hotels and accommodations. The four-star Hotel Selfoss has a luxurious spa and quality restaurant for those with a larger budget.
Hveragerdi accommodations also offer an array of options for visitors interested in visiting Iceland’s geothermal areas. For those with high expectations, The GreenHouse Hotel is a top pick. It includes the excellent Greenhouse food hall and shopping area located within the same building.
Fludir, a town known for hosting the beautiful Secret Lagoon, has the Hill, a reasonably priced hotel in a stunning location featuring an excellent restaurant.
-
Join the Vip Club and enjoy savings at restaurants, bars, and stores
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.
If you are wondering where to stay in southern Iceland, have no fear. There are many great hotels in South Iceland along this stretch, as the area is becoming increasingly popular with visitors.
The reason for this popularity is the many beautiful locations you can find just off the road. These include the waterfalls Skogafoss and Seljalandsfoss, the glacier Solheimajokull Glacier, and the Reynisfjara Black Sand Beach.
Hotel Skogafoss and Hotel Skoga are great places to stay in beautiful areas near the waterfall, both at a reasonable price.
Where To Stay in Vik
Many traveling the South Coast choose Vik accommodations. The town of Vik is 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, preplanning is essential, as the number of places to stay is somewhat limited due to the village's size and popularity.
Hotel Katla offers a comfortable stay by a mountainside just a couple of miles outside of Vik.
Those on a budget can stay at the Volcano Hotel. If you want a more intimate stay, you can choose from several guesthouses, such as the Solheimahjaleiga Guesthouse.
Where To Stay in Kirkjubaejarklaustur
Another settlement recommended along the South Coast is the historic village of Kirkjubaejarklaustur, nicknamed Klaustur. There are plenty of Klaustur accommodations to choose from. You can stay at the excellent Hotel Klaustur overlooking the Skafta River, while the Dalshofdi Guesthouse offers a more personal experience. Klaustur is a lovely place to stay, with many easy hikes to stunning locations and the wonderful Kjarr restaurant.
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.
Where To Stay in Skaftafell
The Skaftafell Nature Reserve is a true hiker's paradise on the way to the Jokulsarlon Glacier Lagoon. There are many trails to suit all abilities, which take visitors to incredible places such as the Skaftafellsjokull Glacier and the Svartifoss Waterfall.
It would be easy to spend all day here soaking up nature, and if that fits into your plans, it also 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 Glacier Lagoon
If you aren't lucky enough to get a place or wish to settle a little further on, there are many other great accommodations at Jokulsarlon 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 Seljavellir 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.
Those on a budget also have a great place to stay in the beautifully located HI Vagnsstadir Hostel.
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.
You can find good accommodations in Hofn which are suitable for every budget. While the Hofn Guesthouse is cheap, simple, and convenient, Hotel Hofn offers more luxury without being too pricey.
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 Eastfjords.
Where To Stay in East Iceland
The Eastfjords are among the most remote regions 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. Check out the available hotels in East Iceland to find your place to stay in the beautiful part of Iceland.
The largest settlement of the Eastfjords is Egilsstadir, and there are plenty of hotels and other accommodations in Egilsstadir. This lovely town is by Iceland's largest forest, Hallormsstadaskogur, and the beautiful Lagarfljot Lake.
The Gistihusid Lake Hotel is the most beautifully positioned accommodation in the town and has deluxe rooms that overlook the Lagarfljot for an incredible view. The wonderful Fosshotel Eastfjords offers a quiet getaway in the Faskrudsfjordur Fjord, a short drive from Egilsstadir.
However, those on a budget do not need to miss out on the incredible scenery in the area. Berunes HI Hostel is a green hostel with a campsite close to Djupivogur before reaching Egilsstadir.
On the other hand, Husey HI 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.
There are also accommodations in Seydisfjordur, a nearby village in the East. That includes the affordable 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, which has some of the best sushi you'll find in Iceland!
The towns of Egilsstadir and Seydisfjordur are positioned so that those traveling the Ring Road can easily make their way to their next destination, in the country's magnificent north.
-
See also: Best Restaurants in East Iceland
Where To Stay in Akureyri and North Iceland
When traveling through North Iceland, there's one centrally located place with a wealth of options for accommodation: Akureyri. Sometimes called “the Capital of the North,” this town is by far the largest settlement outside of the nation's southwest.
With a population of about 20,000, it is a metropolis by Iceland's standards. As such, you can choose from a range of Akureyri accommodations to stay at when visiting the must-see places in North Iceland.
Those seeking a luxurious stay will not be disappointed. One of the best places to stay in Akureyri is the Hotel Kea, located right in the city's heart.
Just a couple of hundred yards away is the Acco Ice Apartments, a downtown building with cozy apartments that make for the perfect home away from home.
Hotel Natur is also an upmarket accommodation located just outside of town with the ability to bathe in hot tubs under the open sky.
On the other end of the scale are some very affordable and charming hostels. Akureyri Backpackers and the Hafnarstraeti 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. Many other guesthouses, hotels, and even cottages are available in Akureyri and several nearby campsites.
-
Learn more: Best Restaurants in Akureyri
Where To Stay Near Lake Myvatn
However, Akureyri is not the only place to stay in this region. There are also great accommodations near Lake Myvatn, with its serene waters, surrounded by sites like the Namafjall Geothermal Area and dramatic Dimmuborgir lava formations.
Fosshotel Myvatn and Hotel Laxa are great hotels in the area, all in breathtaking locations with modern amenities. Many cabins are available to rent, such as the Loulundur Cabin, 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 is 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 in the nearby whale-watching capital of Europe at an accommodation in Husavik.
With just around 2,000 people, this serene town has many options, such as the affordable Husavik Green Hostel and the upscale 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. This museum details how vital the fishing industry was to the survival of this nation for an entire millennium before industrialization.
Check out the selection of accommodations in Siglufjordur and find the one that suits you best. Siglo Hotel is one of Iceland's most beautiful and luxurious hotels, being level with the water and accessible by boat. The rooms are stylishly decorated, and many have an incredible view of the fjord.
A tourist 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 Laugarvegur 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, Hotel Siglo offered him a free stay when the locals found out about his mistake, a credit to the helpful nature of Siglufjordur's inhabitants.
-
Check out the news interview with Iceland’s famous lost tourist
Other settlements in the north that you can stay at are, among others, Dalvik and Blonduos. Consider Dalvik accommodations to explore the unique fishing village and surrounding areas. Alternatively look into hotels in Blonduos, which is known for soothing rivers and its majestic countryside.
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 of Iceland. However, those who do 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.
There is a wide range of accommodations in the Westfjords, including cozy cabins and country hotels. Consider renting a 4x4 vehicle when traveling to this remote region, as many of the roads there are not paved.
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. Therefore, booking a hotel in Isafjordur ahead of time is vital to ensure you have a place to stay.
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, the HI Korpudalur Hostel is approximately 12 miles (just under 20 kilometers) away from Isafjordur.
Other travelers may also enjoy staying at Guesthouse Aslaug, which has everything from shared accommodation to private rooms.
Visitors seeking a deluxe room can find one at Isafjordur Torg Hotel, which also has standard rooms for those seeking comfort but not luxury.
You can find similar hotels at Patreksfjordur, such as the Fosshotel Westfjords, which has a mix of standard and superior rooms.
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.
You can find information on which roads are open on the Icelandic Road Administration website.
-
Learn more: Iceland in Winter - The Ultimate Travel Guide
Where To Stay In the Snaefellsnes Peninsula
Like the Westfjords, travelers sometimes overlook the Snaefellsnes peninsula. It's often referred to as Iceland in miniature 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. Check out the selection of accommodations on the Snaefellsnes Peninsula and find the best option for your visit.
-
Discover the Top 16 Things to Do on the Snaefellsnes Peninsula
There are several hostels in the area. These include HI Hostel Grundarfjordur and the Freezer Hostel in the Rif settlement, all providing comfort in beautiful locations at reasonable prices.
The Freezer Hostel is a little more expensive but definitely worth the extra cost, as it hosts a performance space that regularly holds concerts, theater performances, and comedy shows.
There are also many pleasant hotels, such as Fosshotel Hellnar. However, those seeking more elegance will find no better than Hotel Budir. With its remote location, exquisite restaurant, and incredible views of the Snaefellsjokull National Park, 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 Budakirkja Church nearby is a popular attraction and wedding venue.
The largest town in the region is Stykkisholmur, which is a solid option for your stay in the region. You have plenty of Stykkisholmur accommodations to choose from, such as the cozy Hotel Egilsen.
Where to Stay Near Keflavik Airport
Keflavik International Airport is the main airport in Iceland. Some travelers may find it more convenient to stay in accommodations near Keflavik airport.
One option, Courtyard by Marriott, is a four-star accommodation with a modern vibe and many on-site amenities. Meanwhile, Raven's Bed and Breakfast is much simpler and more affordable, with its own unique charms.
-
Learn more: Best Hotels Near Keflavik Airport
Road Trips, Camping, and Cabins in Iceland
Booking a vacation package in Iceland ensures accommodation and ease of travel, especially for road trips where you can simply reach your pre-booked hotels or hostels. A self-drive tour offers flexibility, letting you explore at your own pace.
Camping in Iceland is a great summer option, though campsites close in winter. While camping is affordable and doesn't always require reservations, it's wise to check availability during local events.
Renting a campervan with heating is a convenient choice that combines accommodation and transport while sparing you from setting up a tent.
Icelanders often own "summer cabins," which are available year-round for rent, offering an authentic Icelandic experience. These cabins vary in size and amenities, with some featuring outdoor hot tubs for a relaxing view of the northern lights.
Best Places to Stay in Iceland in the More Remote Destinations
The previously mentioned places are the most visited in Iceland, but accommodation is also available in its most remote reaches. 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 Center and the Volcano Huts in Thorsmork are options close to the Highlands. They invite their guests to explore this incredible region during the day and sleep in comfort at night. The Wilderness Center has a range of lodgings, from shared dorms to private rooms, while the latter also has private cottages.
Photo from the Volcano Huts
As mentioned above, 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 easier if you take a self-drive camping tour of the Ring Road or rent a motorhome or campervan.
-
See also: The Perfect Camping Tour Around Iceland
Iceland Travel Tips
Book Early, Especially in Peak Season
Iceland has become a top-rated travel destination, offering many high-quality accommodations. Even budget options like youth hostels are comfortable and well-maintained. However, planning is crucial to ensure a smooth stay.
Hotels and other lodgings fill up quickly, especially during summer and the Christmas season. Booking several months in advance is highly recommended. This is particularly important if you're traveling outside the Reykjavik capital region and Akureyri, where accommodations in smaller settlements are limited.
Without proper planning, you may drive long distances only to discover that there are no vacancies.
Where To Stay in Iceland for Northern Lights
For the best chances of seeing the aurora, stay in remote areas with minimal light pollution, such as the South Coast, Snaefellsnes Peninsula, or North Iceland.
Many countryside hotels and cabins offer northern lights wake-up calls and outdoor hot tubs for a magical viewing experience. You can also book northern lights tours or stay in northern lights hotels to increase your chances of seeing them.
The best time to see the northern lights is fall through early spring. That’s because the aurora is only visible in Iceland during the winter, from late September to early April. Make sure to plan your trip and accommodations during this period to maximize your chances of seeing this wonder.
Frequently Asked Questions
Where Should I Stay in Iceland?
Deciding where to stay in Iceland depends on your itinerary — Reykjavik is ideal for city life and day trips, while the South Coast, Golden Circle, or North Iceland offer incredible nature and adventure opportunities.
Where Should I Go in Iceland for the First Time?
First-time visitors should explore Reykjavik, the Golden Circle, and the South Coast, which offer a mix of Iceland’s iconic waterfalls, geysers, glaciers, and cultural attractions.
Which City Should I Stay in Iceland?
Reykjavik is the best area to stay in, as it has some of the best hotels in Iceland, dining, and entertainment, plus easy access to tours and excursions across the country.
Which Part of Iceland Is Best?
Each region of Iceland has something unique to offer — South Iceland is great for waterfalls and glaciers, the North is perfect for wildlife and fewer crowds, and the Westfjords are ideal for remote adventures.
Book Smart, Stay Comfortable: Iceland Awaits
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.
All in all, Iceland has a wealth of high-standard accommodations to suit all travelers based on their tastes, budgets, and needs. It's only getting better as the industry catches up with demand. Start exploring our Iceland vacation packages and enjoy all this beautiful country has to offer.
Book well in advance and plan your trip around your lodgings, and you will surely have a fantastic time in Iceland. Will you stay in any of these locations? Have you visited Iceland before? Share your thoughts and experience in the comment section below!
