From family-friendly guest houses to deluxe hotels there are some great places to stay in Iceland. Most are found in the southwest around Rekjavík, but there are some real gems along the Ring Road. Here’s our guide to the best accommodation in Iceland.

By: Paul | Last Updated: 2 Jan 2024 | Jump to Comments & Questions

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Since our first trip to Iceland over 25 years ago, the land of fire and ice has become a popular tourist destination. Fortunately, accommodation options have significantly improved since those early days, and many of the best places to stay in Iceland now boast a magical natural location combined with modern Icelandic style.

The hotels in Iceland are impressive in their sustainability efforts, being sympathetic to the environment and powered mostly by green energy.

While many things in Iceland are not cheap, the high standards of the hotels guarantee comfortable beds, clean and inviting spaces, and friendly and efficient service.

We have visited Iceland several times on different itineraries [see all our Iceland itineraries] and have experienced a mix of cool and traditional accommodation styles. Most are located in Reykjavík and the southwest, but there are also wonderful hotels and guesthouses along the Ring Road as it loops around the country.

We have organized the best places to stay in Iceland by region, making it easier for you to find the right hotel in the perfect location. We also recommend reading our guide to planning an Iceland trip.


Iceland is an expensive destination and accommodation takes up a big chunk of your vacation costs, so it’s a good idea to plan ahead.

  • Prices rise dramatically over the summer months with many places booking out well in advance. Look for accommodation at least 6 months before your Iceland trip.
  • Christmas is also a busy time, particularly in and around Reykjavík.
  • There are fewer hotels in the more remote regions of Iceland, (such as Studlagil Canyon & Skaftafell) so options are limited and it pays to book even earlier.
  • Lodging with kitchen facilities can help keep costs down by allowing you to cook meals or take lunch out on day trips.

There are a few different types of accommodation to suit different price brackets and tastes.


Hostels in Iceland are generally good quality and offer a mix of dormitories and private rooms. Prices start at around 35 EUR per person per night but can rise quickly in summer.


There are a wide range of choices of hotels in Iceland with many modern and cool places to stay. Prices can be expensive and some rooms are small, but bargains can be found and most come with a continental breakfast.


Guesthouses are a great way to meet other travellers and friendly locals. Run by families, many include meals prepared in-house and served at communal tables. Expect to pay roughly US$150 upwards for a room for two people, with dinner charged on top of the advertised room rate. (Unless otherwise stated).

laugavallalaug highlands iceland 1


To help with planning your Iceland vacation, all the guesthouses, hostels and hotels in Iceland we have recommended are on the map below. Each of the main regions are in a different colour.

How to use this map / Click on the top left of the map to display the list of locations, then click on the locations to display further information. Click on the top right corner of the map to open a larger version in a new tab or the star to save to your Google Maps.  


Best place to stay in Iceland for access to tours and city facilities

Reykjavík is the largest settlement in Iceland with the widest selection of hotels. It is an attractive city with charming old streets, museums and a decidedly cool Icelandic attitude. A 3-day Reykjavik itinerary allows you to enjoy the compact city and visit the Golden Circle on a day trip.

In the city, you’ll find budget hostels, mid-priced guesthouses, and a range of hotels catering from high-end luxury to family-friendly.

Most of the action in Reykjavík takes place in the downtown area near the Laugavegur shopping street, however, it’s not a large place and finding something a little further out will provide better value for money.


Located right near the Laugavegur shopping street, Hotel Borg is an elegant Art Deco-styled hotel, perfectly located to explore the centre of Reykjavik. They have free Wi-Fi, a spa and a buffet breakfast for an additional charge. The stylish design and wooden floors create a clean, fresh ambiance. |

LOFT – HI HOSTEL – Reykjavik

Loft HI Hostel is a friendly hostel in the centre of Reykjavík with a bar, roof terrace and great eco-friendly credentials. With a choice of private bathrooms or dorm-style quarters and weekly social events, it’s budget-friendly Iceland lodging with a young, communal vibe. |


The 5-star Reykjavík EDITION has all the luxury you’d expect from an international hotel of this pedigree. There is a cool cocktail bar, a substantial buffet breakfast and a modern spa with rejuvenating treatments. The location is perfect for exploring Reykjavík on foot. |


The Black Pearl is a family-friendly hotel in the centre of Reykjavík with large rooms containing heated marble floors, contemporary furnishings, and city views. An in-suite breakfast package can be ordered (with a discounted price for children) or you can prepare your own in your private kitchen. |


Best place to stay in Iceland for geothermal pools & Iceland’s newest volcanic eruption

Just a stone’s throw from Keflavík airport and the capital of Reykjavík, southwest Iceland is one of the best places to stay to see many of the unique sights the country has to offer.

The main highlight is the Golden Circle – a circular drive that visits Þingvellir National Park (the historic site of Iceland’s first parliament); the geothermal geyser at Geysir; and the wonderful waterfall at Gullfoss.

But there’s more tucked into this lovely region. Nearby is Fagradalsfjall volcano, which spewed lava into the air in both 2021 and 2022, the geothermal pool of the Blue Lagoon, and one of our favourite thermal hot pots in Iceland, Reykjadalur Hot Springs.

It also makes a good base for taking day trips to Landmannalaugar and Thórsmörk in Iceland’s Highlands.


The Northern Light Inn is located just 5 minutes from the Blue Lagoon and includes a wellness spa, comfortable lounges and an excellent restaurant. There is an hourly free shuttle bus to the Blue Lagoon and it’s also very convenient to get to Fagradalsfjall volcano. |

HOTEL RANGÁ – Hvolsvöllur

With a spectacular on-site observatory and occupying a remote location, Hotel Rangá is one of the best hotels in Iceland for viewing the Northern Lights. The rooms are modern and spacious with comfortable beds and stylish details. The highlight, however, is the 3 hot tubs under the starry skies. Hotel Rangá is also well-positioned for visiting Thorsmork and Landmannalaugar. |


With top-notch facilities in a superb location, Hotel Gulfoss is a great choice to take advantage of some of the features of the area. Gulfoss waterfall is just 1.9 miles away, Geysir is a 10-minute drive and Thingvellir National Park is 35 minutes. The in-house breakfast is excellent. |


Álftröð is a great value guesthouse with all the facilities you need for a comfortable stay, including an outdoor hot tub. The rooms are basic but well-sized and the complimentary breakfast is a good start to the day. It’s very well located for seeing many of the Golden Circle attractions and it has great access to Landmannalaugar. |

gullfoss iceland waterfalls 2


Best place to stay in Iceland for adventure activities, puffins and black sand beaches

Vík is a seafront village in the south of Iceland. Occupying a remote location near the Mýrdalsjökull Glacier, Vík has become a popular stop on the Ring Road and a great base for visiting the Reynisfjara Black Sand Beach and the Dyrhólaey Peninsula – home to puffins and sublime rugged scenery.

The region around Vík is a great place to stay in Iceland for hiking tours and caving activities on Mýrdalsjökull Glacier, and to see some of the best waterfalls in Iceland.

As one of the only settlements in this part of the country, it’s also a great base on our 5-day Iceland itinerary to allow you to see more in southwest Iceland.

The lodging options around Vík include several properties with great sustainability credentials and some cool stays with great facilities.

THE GARAGE – Varmahlíð

Just 10 miles from Seljalandsfoss, The Garage is a cool Icelandic stay with fully equipped kitchens, private bathrooms, laundry facilities and scenic terraces with lake views. If that’s not enough, there’s a hot tub to relax the muscles after a long day exploring the sights. |


A clean comfortable hotel with friendly service and an on-site restaurant and bar, Hotel Vík Í Mýrdal is one of the best accommodation options in the centre of Vík. The rooms are spacious and well-appointed. Breakfast is simple but does the job. |


The Glacier View Guesthouse is a 40-minute drive from Vík overlooking the Mýrdalsjökull Glacier. The rooms are spacious and well-decorated; each one with a patio and superb glacier views. They do an excellent home-cooked buffet dinner on communal tables in their lovely home. This is also the best place to stay in Iceland to explore Maelifell in the highlands. |


Located just outside Vík, Hotel Katla is a modern hotel with clean, comfortable rooms and friendly Icelandic service. The buffet breakfast is substantial, and guests have free access to the superb hot tub and sauna. The black sands beach is just a 5-minute drive away. |


Best place to stay in Iceland for exploring a massive glacier and the Jökulsárlón Glacier Lagoon

Towards the southeast of Iceland, the massive glacier of Vatnajökull dominates the horizon. There is little civilization here and accommodation books up fast. But it’s one of the best places to stay in Iceland to experience the unique icy geology of the country.  

The area includes Vatnajokull, the largest ice cap in Europe, Skaftafell National Park (which has excellent hiking and views overlooking the glacier), as well as the mesmerizing Jökulsárlón Glacier Lagoon.

The southwest is also a great base to visit Vestrahorn – a rocky mountain peak overlooking the ocean. It’s basic Iceland accommodation, but a fantastic experience.

Visit Höfn and the southeast on our 7-day Iceland itinerary.

vestrahorn iceland 1


Höfn Hostel is basic accommodation with simple rooms, shared bathrooms and access to the guest kitchen and laundry facilities. It’s spotlessly clean with excellent showers. The hostel is perfectly located to take advantage of the dramatic location with very affordable rates. |

VIKINGCAFE – Hornsvegur

For epic scenery, it’s hard to go past Vikingcafe. The hotel owns the Vestrahorn area and staying here is the only way to see it at sunrise or sunset when it’s simply spectacular. The hotel offers basic, but clean accommodation with private bathrooms. There’s a café for dinner and breakfast. |


Set in a remote location, Guesthouse Nypugardar is a great place to stay to witness the Northern Lights. Located 25 minutes from Höfn on a working farm, the accommodation is clean, bright and simple with a home-cooked dinner and a breakfast to get you going in the morning. |


Close to Jökulsárlón Ice Lagoon, Fosshotel Glacier Lagoon is a smart hotel with an on-site restaurant and bar, free Wi-Fi and several rooms with a luxurious private hot tub. It’s not the cheapest hotel in Iceland, but it lives up to expectations and you can save a little bit by not missing the nightly cocktail happy hour. |


Best place to stay in Iceland for visiting the Eastfjords and their fascinating natural scenery

Seyðisfjörður is a charming colorful village in the east of Iceland and the most attractive base for visiting the Eastfjords on our 10-day Iceland itinerary. It’s beautifully set, perched on the end of a narrow fjord and surrounded by snow-capped mountains.

The entire region is characterized by dramatic coastlines, narrow fjords, and a slower more local pace. Although it gets fewer visitors than the southwest, there are plenty of standout attractions including Hengifoss – one of the best waterfalls in Iceland – and the basalt columns of Stuðlagil Canyon.

There’s a good range of lodging in Seyðisfjörður and several great restaurants, making it an ideal base to explore the area.


In the heart of the lovely town, Seyðisfjörður Guesthouse has comfortable, good-sized rooms, some with a private bathroom. They have a well-equipped shared kitchen and laundry facilities and there is plenty of information to get the most out of the area. Breakfast is not provided. |


The lovely family-run lodging, Hengifoss Guesthouse is 3.7 miles from Hengifoss waterfall. The rooms are spacious with either shared or private bathrooms and a buffet breakfast is included. The hotel is surrounded by mountains in a beautiful part of Iceland.

If you have a 4×4, you can drive from the hotel to Stuðlagil via the Hafrahvammagljufur – a spectacular 8-kilometre canyon. Read our guide to the Iceland highlands for more details. |

BERJAYA HÉRAÐ – Egilsstadir

Berjaya Hérað has comfortable modern rooms with tea and coffee-making facilities, private bathrooms, and complimentary Wi-Fi. It’s sometimes better to select a room rate without breakfast, and then pay the additional charge, so check the price before you book. The dinner menu, specialising in local fish, is surprisingly good. |

HOTEL 1001 NOTT – Egilsstadir

The modern and cool Hotel 1001 Nott feels remote and tranquil, yet it’s only a few miles from the Ring Road, perfectly located to access the facilities of Egilsstaðir, a 10-minute drive away. The rooms overlook a lake and a forest, but any hotel in Iceland with a hot tub commanding these sunset views understands its key selling point. |


Best place to stay in Iceland for whale watching and unique volcanic geology

The central north region of Iceland is packed with natural attractions. Surrounding the area of Mývatn are interesting lava formations, a unique geothermal wasteland, pseudo craters and access to several prominent waterfalls. Read more on our guide to visiting Mývatn.

An hour north of the main Mývatn area, the charming seaside port of Húsavík is where whale-watching tours depart. Known as the whale capital of Iceland, up to 23 species of whale can be spotted here, and sightings are almost guaranteed in the month of July.

To visit the Mývatn area we’d recommend at least 2 days, which we have included on our Ring Road itinerary.


Fosshotel is a modern comfortable chain hotel with a good selection of facilities including free Wi-Fi, private bathrooms and 24-hour reception. The onsite restaurant with expansive views overlooking the lake is open for breakfast and dinner. |


With views over the lake but away from the town, Hótel Laxá is an excellent hotel in Iceland to view the Northern Lights. It’s quality, modern accommodation with all the amenities you need for a comfortable stay. The restaurant/bar area is and nice place to hang out and breakfast will sort you out for the day. |  


Like their sister property in Mývatn, the Fosshotel Húsavik has a 24-hour reception, free Wi-Fi, tea and coffee-making facilities, plus plenty of other handy amenities. In keeping with their location, the Húsavik version has a marine-themed décor. It’s just a few minutes away from the harbor where the whale-watching tours depart. |


Located in a historic house packed with character, Árból Guesthouse is a charming place to stay in Iceland thanks to the friendly host, attention to detail, and home-cooked breakfast. Just 5 minutes’ walk from the harbor it’s in a great location to make the most of the area. |


Best place to stay in Iceland for local life in a remote destination

Stretching out into the Atlantic Ocean, the Westfjords are a series of rugged peninsulas and massive mountains including spectacular but remote scenery. It’s home to one of the best bird-watching areas in Europe and there are natural hot springs that feel isolated and supremely local.

Ísafjörður is the main town in the Westfjords. It has a cute high street, a respectable maritime museum, and a small but thriving café scene. Further afield, there are a few other small settlements that also make a great base.

Accommodation in the Westfjords is delightfully untouched by big hotel chains, so expect to stay in very local guesthouses where the service is friendly and thoughtful.


Stekkaból is a lovely guesthouse on the backstreets of Patreksfjörðurm, a small village in the southern section of the Westfjords. The rooms are a decent size and the shared lounge is bright with wonderful views over the fjord. Biscuits, coffee, and hot chocolate are available and there’s a garden for lounging in. |

HOLT INN – Flateyri

In the centre of a rugged and remote landscape, where multiple valleys drop into the sea, lies the Holt Inn. Few places feel like you’re really getting away from it all as much as this one. All the rooms have private bathrooms, and the breakfast is excellent. The Vagninn Bar & Restaurant in Flateyri is only a short drive away and another great reason to stay here. |


Tucked in the southeastern end of the Westfjords, getting to Malarhorn Guesthouse takes a bit of effort. But the reward is a fine evening meal followed by a soak in the Drangsnes hot tubs overlooking the ocean. If you like the idea of catching a glimpse of the northern lights from your seaside hot tub, this is the place for you. There’s a shared kitchen and a good breakfast. |


It may not look packed with charm from the outside, but Hotel Ísafjörður has all the comfort you need in a clean, central property. Breakfast is included and all rooms have a private bathroom. It’s just a 5-minute walk to the centre of town making it a great option to explore Ísafjörður. |


Best place to stay in Iceland for a mini-break close to Reykjavik

The Snaefellsnes Peninsula is often described as a mini-Iceland. Here you’ll find a large glacier, red craters, basalt columns, dramatic coastal roads, beautifully shaped mountains and the Kirkjufellsfoss waterfall.

At just 2 hours’ drive from Reykjavik, Snaefellsnes is an easy destination to get a taste of some of the remarkable scenery Iceland has to offer. The area can easily be covered on an extension to our 3-day Iceland itinerary.

The accessibility of the region means there is a wide selection of accommodation options, covering everything from budget homestays to high-quality hotels.

Snaefellsness Iceland trip planning


This quirky house, which was once a bookstore, is warm and inviting and a great accommodation option for families in Iceland. The Bookstore Family Apartment has one bedroom, one bathroom, a kitchen and a living space with lovely sea views. It’s well-located for whale-watching trips from Olafsvik.

SÝSLÓ GUESTHOUSE – Stykkishólmur

The bright and sunny Sýsló Guesthouse has a very well-appointed shared kitchen and living space with smart decor and nice views. Features include a sun terrace, free Wi-Fi and freshly ground coffee for guests to make their own brew. The rooms are large and the beds comfy. |


Located 2.2 miles out of Grundarfjordur, the Kirkjufell Guesthouse & Apartments have excellent views of the Kirjufell mountain, ideally located to get early morning snaps of the waterfall. Each room has a private bathroom and there’s a well-equipped shared kitchen to make your own meals. |


The self-catering accommodation at Sodulsholt Cottages is located on a horse training farm with over 70 horses over 1300 hectares. Each cottage includes a fully equipped kitchenette, a dining space and private bathrooms. It’s clean and comfortable with a relaxed farm vibe. |

Where to stay in Iceland, Snaefellsnes Peninsula


Iceland is an excellent destination for semi-adventurous travelers who like to get off the beaten track and immerse themselves in stunning scenery. Here’s some more reading from us to help plan your journey to the land of fire and ice.

If you found this guide useful, we’d love it if you could follow us on Instagram.



15 useful travel tips for visiting Iceland

How to drive the F-Roads in Iceland

Helpful tips for planning your Iceland trip

All you need to know about driving in Iceland


Reykjadalur Thermal River

How to visit the Fagradalsfjall Volcano

Hiking to Stuðlagil Canyon

The best geothermal baths in Iceland

How to visit Vestrahorn, Iceland

Complete guide to Landmannalaugar

Visiting Thórsmörk in the highlands


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