Where to Stay in Iceland

Things To Know About Staying in Iceland

The land of fire and ice has fast become a top-rated destination for travelers worldwide. The options for lodging in Iceland are extensive, and the standards are universally high. At the very least, visitors can be guaranteed a comfortable and clean bed; even most youth hostels here are more inviting than in much of the rest of the world.

Iceland Lodging: Be Aware of Peak Season

While there are many options available when staying in Iceland—and more establishments opening their doors all the time—reservations tend to fill up very quickly. Hotels are usually full during the summer and the Christmas season, which was once an “off-peak” season. Would-be visitors need to make sure they plan their holidays at least several months in advance.

Those intending to travel around the country should plan their stay particularly well. Outside of the greater Reykjavik area and Akureyri, the largest town in the north, settlements tend to be tiny, with a limited number of places to stay. If, for example, you are traveling the Westfjords region, it can take hours to get from settlement to settlement. You don't want to spend a whole day driving to the town of Isafjordur, for example, only to find all of the accommodations are fully booked.

Having a well-thought-out travel plan that is easy to execute is essential to making the most of your time in Iceland.

Road Trips, Camping, and Cabins in Iceland

The most straightforward way to ensure that you have accommodation wherever you are going is to book a vacation package in Iceland. This way, all of your preferences will be considered, and all your places to stay will be booked. If you're planning a road trip, all you need to do is get to them on time.

The beauty of a self-drive tour is that getting to your next hotel or hostel is your only obligation; you are free to do whatever else you wish during your days, accountable to no one.

You may also choose to camp in Iceland, although campsites are closed in the wintertime. In any case, we wouldn't recommend camping anywhere in Iceland during the winter! In the summer, however, camping is a good option, as it's cheaper and requires less booking in advance. Be aware that it's still worth checking the availability of different campsites if an event is happening in the area, as they do fill up occasionally.

The most convenient way to go on a camping trip in Iceland is to rent a campervan, especially one with heating! It's both accommodation and a rental car in one, and you don't have to bother setting up a tent every night.

Many Icelanders also have a second home, a so-called "summer cabin." Despite the name, these homes can also be stayed in during the winter. Many of these cabins can be rented out as a whole, giving you a truly authentic Icelandic experience.

Iceland's cabins and cottages vary significantly in size and amenities. Many of them have an outdoor hot tub, perfect for relaxing and watching the northern lights in winter!

• For more, check out Camping in Iceland - All You Need to Know
• See also: Northern Lights in Iceland - When & Where To See the Aurora

Reykjavik Hotels

Iceland's capital city of Reykjavik has the broadest range of hotels in the country, suiting all budgets and needs. Whether traveling on a shoestring budget or looking for a lavish getaway, you’re sure to find the place for you.

Best Places To Stay in Reykjavik

Unquestionably, the best place to stay in Reykjavik is downtown, near the Laugavegur shopping street. There you'll find most of the best attractions, restaurants, and souvenir shops in Reykjavik.

Those with a larger budget have an array of luxury hotels to choose from. Hotel Borg, for example, is a beautiful building located right in the downtown area, with 99 rooms in the Art Deco style. 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, 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 harbour of Reykjavik.

• Read about Iceland with Kids | A Family Guide to Iceland

Where To Stay in Reykjavik on a Budget

Of course, a stay at the Hilton is not possible for everybody, but those traveling with expenses in mind still have many great options. There are hostels and budget guesthouses throughout the city, some located very centrally. Of these, KEX 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 still close enough to downtown to be convenient while being better suited to those on a budget.

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. The Viking Hotel in Hafnarfjordur, for example, is in a serene location and has beautiful views over the settlement's bay.

Where to Stay Near Keflavik Airport

It may be more convenient for some travelers to stay in accommodations at Keflavik Airport. 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

Where To Stay Near the Blue Lagoon

Staying in hotels in Keflavik will make it relatively easy to access the Blue Lagoon and give you the opportunity to 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 and can be fully booked.

• Find the Best Hotels Near The Blue Lagoon in Iceland
• See also: Iceland's Blue Lagoon: The Ultimate Travel Guide

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 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.

The little towns and settlements that dot the west of Iceland also offer plenty of places to stay. The quaint town of Selfoss, for example, has plenty of accommodation options. The four-star Hotel Selfoss has a luxurious spa and quality restaurant for those with a larger budget.

At Hveragerdi, a settlement known for its geothermal activity, there's a similar variety of accommodations. The GreenHouse Hotel will meet the standards of those with high expectations, with 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.

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 that can be found just off the road. These include the waterfalls Skogafoss and Seljalandsfoss, the glacier Solheimajokull, and the notorious black-sand beach of Reynisfjara. Thanks to the variety of accommodations and the attractions and activities available nearby, this is one of the best areas to stay in Iceland.

The closest and most convenient location to Reykjavik and the Golden Circle is the tiny settlement of Skogar. Hótel Skógafoss and Hotel Skógá are great places to stay in beautiful areas near the waterfall, all at a reasonable price.

Where To Stay in Vik

Many traveling the South Coast choose Vik accommodations. 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, pre-planning is essential if this is your plan, as the number of places to stay is somewhat limited due to the village's size and popularity.

The reliable Icelandair hotel chain has, sadly, closed its establishment here, but Hotel Katla offers a comfortable stay by a mountainside just a couple of miles outside of Vik. Those on more of a budget have the choice of staying at the Volcano Hotel. If you’re looking for a more intimate stay, there are several guesthouses to choose from, such as Solheimahjaleiga Guesthouse.

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 a 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.

• See also: Jokulsarlon Glacier Lagoon: The Crown Jewel of Iceland

Where To Stay in Skaftafell

The Skaftafell Nature Reserve is a true hiker's paradise; there are many trails to suit all abilities, which take visitors to incredible places such as the Skaftafellsjokull glacier and the waterfall Svartifoss. It would be easy to spend all day here soaking up nature, and if that fits into your plans, it very conveniently has its own hotel.

Hotel Skaftafell is simple, with basic amenities such as a bar, restaurant, and Wi-Fi, but alluring due to its breathtaking location and reasonable price. Be sure to book well in advance, however, as this is one of the most popular hotels in the area.

Where To Stay Near Jokulsarlon 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. The Hofn Guesthouse is cheap, simple, and convenient. Hotel Hofn, meanwhile, 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 East Fjords.

Where To Stay in East Iceland

The East Fjords 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 East Fjords is Egilsstadir, and there are plenty of hotels and other accommodation options in Egilsstadir. This lovely town is by Iceland's largest forest, Hallormsstadaskogur, and the beautiful lake Lagarfljot.

The Berjaya Hotel Herad promises to provide you with everything you need. 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 the area has to offer. 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!

Both 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

If 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 people. By Iceland's standards, that makes it a metropolis.

As such, you can choose from a range of Akureyri accommodations for your North Iceland trip.

Those seeking a luxurious stay will not be disappointed. Located right in the city's heart is one of the best places to stay in Akureyri, the Hotel Kea. Just a couple of hundred yards away is the 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. There are many other guesthouses, hotels, and even cottages available in Akureyri and several nearby campsites.

• Learn about the Best Restaurants in Akureyri
• See also: 11 Must-See Destinations in North Iceland

Where To Stay Near Lake Myvatn

Akureyri, however, is not the only place to stay in this region. There are also great accommodation options by 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.

Other settlements in the north that you can stay at are, among others, you can stay in the fishing village of Dalvik or a hotel in the town of Blonduos. There's an advantage to staying in Blonduos if you are traveling further in Iceland, as it brings you closer to your next destinations: the Westfjords and Snaefellsnes Peninsula.

• See also: 13 Best Things to Do in Akureyri (and Nearby)

Where to Stay in the Westfjords

Not many travelers have the time to visit the spectacular Westfjords; those who do, however, discover a remote world of incredible beauty. If possible, it's worth spending several days here to see the many awe-inspiring wonders and navigate the breathtaking fjords. There is a wide range of accommodations in the Westfjords, including cozy cabins and country hotels. It is recommended to rent a 4x4 vehicle when traveling to this remote region, as many of the roads there are not paved.

However, there are very few settlements in the area, and none of them are large. The “Capital of the Westfjords,” Isafjordur, has less than a thousand residents. 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, approximately 12 miles (just under 20 kilometers) away from Isafjordur is the HI Korpudalur Hostel. 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. 

Hotels similar to this can be found 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.

Information on which roads are open can be found on the website of the Icelandic Road Administration.

• Check out the Ultimate Guide to the Westfjords of Iceland
• Learn more: Iceland in Winter - The Ultimate Travel Guide

Where To Stay In the Snaefellsnes Peninsula

Like the Westfjords, the Snaefellsnes Peninsula is sometimes overlooked by travelers. It's often referred to as a microcosm of the rest of Iceland due to the diverse amount of dramatic scenery concentrated in just one strip of land 56 miles (90 kilometers) long.

There are many tiny settlements here, with lodgings to suit various budgets and tastes. 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 Rif, 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 where concerts, theatre performances, and comedy shows are regularly held.

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, and it's also known for having a very romantic ambiance, making it ideal for a couple's getaway or even a wedding.

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.

Best Places to Stay in Iceland in the More Remote Destinations

The above places are the most visited in Iceland, but accommodation is found in its most remote reaches, too. The Highlands, for example, are rarely seen outside of group hikes, yet there are several places on its edge where you can stay.

The Wilderness 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 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 camping tour of the Ring Road or renting a motorhome or campervan.

• See more: Top 5 Places to Visit in the Highlands of Iceland
• See also: The Perfect Camping Tour Around Iceland

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. 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 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!