Where to Stay in Iceland

Best places to stay in Iceland

Most visitors to Iceland travel around the country–either on a road trip, by bus, or by organised tour–to see the island's widespread attractions, so it's essential to know where is best to spend the night between stops.

While Iceland has become a popular destination in recent years, which has meant an increase in hotel options, this is not the case in every region. What's more, the high cost of living in the country extends to tourist accommodation, so it's best to do your research before travelling so that you can spend your money on other aspects of your trip, like getting a better rental car or indulging in local cuisine.

Accommodation in Reykjavik

As you might imagine, the Icelandic capital has the biggest hotel offering. Finding accommodation is easy all year round, although demand increases in the high season (usually June, July, and August), so it's advisable to book as far in advance as possible. 

You'll find hotels, tourist apartments, bed and breakfasts, hostels, and even campsites in Reykjavik, meaning there are options for every budget. Bear in mind that Iceland is usually more expensive than other destinations in Europe.

Deciding to stay in Reykjavik depends entirely on your budget. In terms of proximity to services and attractions, the best area to stay is the so-called 101 District, but it's also the most expensive. These 20 blocks are home to many of Reykjavik's restaurants and some of its most famous landmarks, like the lively Laugavegur and the iconic Hallgrímskirkja.

If you're looking to save money, you'll find cheaper accommodation and a more authentic feel in a less touristy area such as the Laugardalur district, which remains well connected to the city centre by the Reykjavik bus network.

Accommodation in Snaefellsnes

Despite its proximity to Reykjavik, many tourists decide to spend a night on the Snaefellsnes Peninsula in order to visit one of the most beautiful areas of the country in a more relaxed way. One of the best places to stay in Snaefellsnes is Stykkishólmur. This town, besides being one of the largest in the area, is also one of the most beautiful villages in Iceland.

Stykkyshólmur has a good tourist infrastructure with several hotels, restaurants, museums, and even a ferry to the Westfjords, specifically to the tiny town of Brjanslaekur.   

Accommodation in Westfjords 

Isafjordur is the most important town in the Westfjords and, therefore, has the best hotel offerings. However, as it's one of the country's more remote and least-visited regions, accommodation is still not extensive, and prices remain average. There are also limited hotels available in other towns in the Westfjords, including Hólmavík and the area around Látrabjarg.

Accommodation in Akureyri 

As the "capital of northern Iceland," Akureyri is home to a large number of hotels, apartments, and hostels. Prices and quality of the rooms are similar to those in Reykjavik and other parts of the country. Despite its relative importance, Akureyri is not a big city. The best area to stay in is the historic centre, but it can be easily reached from the further neighbourhoods, so location doesn't pose a big challenge when choosing where to stay.

Accommodation in Lake Myvatn 

When visiting Lake Myvtan, it's important to remember that this is one of the most visited places in Iceland. You should therefore remember to book your accommodation well in advance to avoid high prices. The best place to stay in the area is Reykjahlid, both in terms of hotel offerings and location, since from there, you can reach places like Hverir, the Myvatn Nature Baths, and Dimmuborgir quickly and easily.

It's worth noting that the name "Myvtan" means "lake of midges," having this name due to the high number of pesky flies around the lake in summer. Make sure to bring insect repellent. If all else fails, you should be able to buy mosquito nets in Reykjahlid.

Accommodation in southeast Iceland 

To explore the Vatnajökull Glacier and the Skaftafell National Park, your best option is to find a hotel in Vík or Höfn, 2 of the closest towns to these must-see places in Iceland. Despite being very small, both have a number of hotels, hostels, apartments, and even campsites where visitors can stay before continuing their route to the north of Iceland.

Accommodation in the Icelandic Highlands

Given the remoteness of the Highlands, finding a hotel here is challenging and expensive, so the best way to visit the region is to book a day trip from bigger cities like Reykjavik or Akureyri.

Hotels in Iceland

The best way to find economical accommodation in Iceland is to book in advance. Depending on where you're planning to stay, you should be able to find double rooms from € 140 (US$ 148.30) per night. To check out the best possible offers in advance, have a look at our search engine for hotels in Iceland.

Apartments in Iceland

There are more and more tourist apartments available in Iceland, which are ideal if you're a large group or if you want to save money on your trip by cooking rather than eating out in restaurants for every meal. See how they fit in with your budget using our search engine for apartments in Iceland.

Hostels in Iceland

Staying in hostels is a good way to save money on your trip to Iceland, if you don't mind sharing facilities. There's a growing range thanks to the increase in tourism in the country.

Camping in Iceland

Given that one of the main reasons to visit Iceland is its spectacular nature, camping is an increasingly popular way to stay on the island. The price is much lower than any other type of accommodation, ranging from 1,200 kr (US$ 8.80) to 1,800 kr (US$ 13.20). However, it's not always a viable option due to Iceland's climate, especially during the low season (September to May). Having said that, there are campsites that are open all year round which offer accommodation in cabins rather than tents. If you're planning on camping in Iceland, bear in mind that it's strictly forbidden to do so in places that are not designated for camping in order to protect Icelandic nature.