In this article I will tell you more about where to stay in Reykjavík. Having been to Iceland no less than 11 times over the past 15 years, I’ve been to Reykjavík many times. It’s a pleasant city that I always love returning to, whether it’s summer, winter or anywhere in between. I’ve written many articles about Iceland and figured that it would be a good idea to share my tips for places to stay in Reykjavík, for any budget.
I’ve been staying at campsites, hostels, mid-range hotels and somewhat luxury hotels. Here are my suggestions for accommodation in Reykjavík. Oh and if you are budget oriented, please also scroll down to also find my alternatives for staying just outside Reykjavík, sometimes offering better value for money!
This article first appeared in 2019 and was fully updated after my most recent visit to Reykjavík in 2025.
Low-budget places to stay in Reykjavík
Hostels can be found are all over town but I’ve found many hostels in Iceland somewhat skechy. I’m not very picky but when I pay quite a bit for a room, I’d like it to be fresh and clean. It doesn’t need to be large, but fresh and clean are a must.
My favorite places to stay in Reykjavík for when you’re on a budget is either the Reykjavík Dalur HI Eco Hostel or … the campsite! Both are located in Laugardalur just outside of town. They are right next to each other. The hostel has decent rooms and a nice atmosphere. The campsite has clean facilities and is fairly quiet, for a campsite that is. Reception rents out bikes too, so you can easily move yourself around the city. Next to the facilities is the Laugardalslaug swimming pool, where you can take a plunge into a hot pool for little money.
In September 2025 I stayed at the KEX Hostel. Let me be honest, this wasn’t for me. It’s a good option for budget travelers, but if you want a little more comfort, I wouldn’t recommend it. I thought the bathrooms were only cleaned to a very limited extent. The breakfast is great and the location is absolutely great but the value for money was quite low. Check prices and availability of KEX Hostel here.
Mid-range places to stay in Reykjavík
My place of choice to stay in Reykjavík when traveling with a friend who did not want to go low budget was the 100 Iceland Hotel, just a few minutes walking from the heart of the city. We stayed here for one night only but really thought it was good value for money. The rooms are modern and neat, but nothing fancy, and staff was friendly. Its location is perfect because it’s in fact right on the Laugavegur, which is Iceland’s most famous shopping street. A supermarket (Bonus) is not too far away so can also buy some stuff there if needed.
Affordable luxury places to stay in Reykjavík
As I cannot afford to stay in five star hotels, I can’t advise any by my own experience. As I only believe in suggesting accommodations I have tried myself, I’ll give you my town best options for affordable luxury places to stay in Reykjavík.
The first option is Hotel Natura. This four star hotel is located next to the domestic airport (Reykjavík Airport, not to be confused with Keflavík International Airport where you will arrive) and a bit of a walk out of downtown, making it rather affordable. The Reykjavík Excursions terminal is also nearby, so if you plan on exploring Iceland further onwards with them (they offer bus transportation all throughout the country and are my personal favorite choice for such) it’s a great place and just a short walk away. Downtown Reykjavík is about 30 minutes walking from Hotel Natura.
If you want to stay in Downtown Reykjavík, then Marina Hotel is a great option. Try to get a room facing the harbor and you will definitely not be disappointed. This hotel also offers a stylish bar and the rooms are amazing and modern. Definitely a great pick for Downtown Reykjavík and my favorite place to stay when I have a little bit more to spend. Check availability and prices here.
The best places to stay just outside of Reykjavík
If you are planning on traveling along Iceland’s South Coast, then it’s a great option to stay a bit further away from Reykjavík. Generally, you’ll find more affordable accommodations in towns such as Hveragerði, Selfoss or even Hella which are all within one hour driving from Reykjavík. My best suggestion for this location is definitely Hotel Hjardarból, where I stayed for five nights during my most recent trip in February 2019. This former farm is run locally by a very friendly family and has hot pools for free use! Check availability and prices here.
If you want to stay in Hella which is a bit further away then you can choose Arhus Cottage and Camping. They have very simple cabins but generally more affordable than staying in Reykjavík. I stayed there a couple of times during my summer trip and can recommend them!
Conclusion and further reading
To be honest, due to Iceland’s popularity in recent years, I always find finding affordable accommodation a challenge. Hopefully, I have still given you an idea of the options on where to stay in Reykjavík.
All accommodations have been visited by myself as I only write about my own experiences. If you are looking for other options, check all the options for staying in Reykjavík here.
If you want to read more about Iceland, you will probably find the following articles interesting as well:
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