Where To Stay in Reykjavik: Your City and Accommodation Guide

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We’re Here To Help You Figure Out Where to Stay in Reykjavik!

Oh, Reykjavik. The charming Icelandic capital city is a great place to discover and/or to use as a base for a trip around Iceland. Eric visited Iceland for the first time back in 2015 as the first stop on his Europe trip. This was just as the Iceland tourism boom was picking up – the stopover flight to Europe made Iceland a great place to see first. The city quickly became one of his favourite Nordic capitals to visit and he’s been back a few times since.

As for your trip, there are loads of places to stay in Reykjavik. If you’re just staying in Reykjavik for one day and/or night, then you might consider a place in the city centre. This will allow you to see the best sights and to get the most out of the Reykjavik nightlife. Others might search for where to stay in Reykjavik on a budget or with family – and we will outline some options for that below!

If you are wondering where to stay in Reykjavik to see the northern lights, you should know that they are most active from November to February and that you will need a clear sky and limited light pollution in order to see them. This means that it’s theoretically possible to see them in Reykjavik, but it is an unlikely occurrence. In any case, here are a few of the popular areas to stay in Reykjavik and a few accommodation options for all styles and budgets!

Oh, and if you are heading to Iceland (or Europe) for the first time, here are a few posts that you might find useful for trip planning:

Where To Stay in Reykjavik – Accommodation Types

Like most cities, Reykjavik has a pretty good mix of accommodation types. You will find most of the brand name hotels as well as cozy guesthouses, apartments, and even hostels for travellers to stay at. Many properties are located along Laugavegur (the popular shopping street). So, if you are unsure where to book and want a location downtown, just aim for this popular street and you will not go wrong.

As for accommodation style and price ranges, if you want luxury you will find it. But if you want a budget “no frills” place to stay, you can find that, too. Even families and large groups will find accommodations that suit their needs. That said, you should know that Iceland is expensive. That means that when we say “budget” it’s more expensive than in most other places in Europe.

The Nordic countries, in general, have a higher cost of living compared to other parts of Europe. As a city, Reykjavik is no exception. That’s why it’s a popular idea to get an accommodation with access to a kitchen so you can grocery shop and cook a few of your meals. Let’s dive into the accommodations by type around Reykjavik.

Hotels in Reykjavik

Hotels are a very popular option in Reykjavik. With the recent tourism boom, hotels began popping up like crazy to meet the demand. While the boom might be cooling off, the result is that Iceland has solidified itself as a top destination with hotels that cater to lots of different travel styles.

As you might imagine, hotels in Reykjavik (especially in the city centre) can be quite expensive – but you pay for the central location and the amenities. Since the downtown area couldn’t be expanded any more, there are a few hotels (the bigger names) that have popped up just a short walk or drive from the centre. For example, hotels like the Grand and the Hilton are in Laugardalur – which we will dive into further down. In the meantime, check here if you are looking for a hotel in Reykjavik.

Hostels in Reykjavik

If you are on a tighter budget or backpacking through, Reykjavik has a few good hostels that you can stay at. The thing about hostels is that you won’t really save a ton of money if you choose this option. This is because – as we said – accommodation in Reykjavik is just very expensive overall.

Having said that, Eric stayed in a hostel when he was in Reykjavik. In fact, he stayed at arguably the most popular one – KEX Hostel – for three nights and absolutely loved it. We actually mentioned it in our post on 27 European hostels we loved staying at.

The location down by the water (in/close to downtown) is awesome, the staff were super friendly, the shared room was great, and the other travellers were like a small community. Also, the ground floor reception area is a popular hang out spot/bar that gets lively during nights and weekends with live music and more. Honestly, check here for KEX Hostel because it was great – but there are also a few more hostels in Reykjavik you can look into!

Apartments, Guesthouses, and Airbnbs in Reykjavik

Another accommodation option that might work for you in Reykjavik are guesthouses or apartments. Typically, these spaces can be cheaper than hotels and offer you your own space. As we said above, apartments often come with kitchenettes or access to a guest kitchen so that guests (families, larger groups, budget travellers) can prepare their own meals since eating out can be pricey in Reykjavik!

Guesthouses are also usually run by passionate hosts with lots of local knowledge to pass along to their guests. In any case, if you are staying in Reykjavik for a few days and want your own space to cook and relax, you can check here for apartments and guesthouses in Reykjavik.

Bed and Breakfasts in Reykjavik

If you are looking for the traditional bed and breakfast experience in Reykjavik, you will find a handful of them. Some of the guesthouses in Reykjavik are cozy and offer a breakfast so you might find what you are looking for in some of them even though it’s not marketed as a “B&B”.

Generally, most of the bed and breakfasts are in quieter, more residential neighbourhoods which can be a nice escape at the end of a long day of adventure. You can check here for bed and breakfasts in Reykjavik!

Where To Stay in Reykjavik – Featured Areas & Accommodations

In the section below, we’ll cover the main areas of the city that you would consider when trying to find a place to stay in Reykjavik. Basically, there are three main areas to stay in Reykjavik: the city centre (Miðborg), east of the city centre (Laugardalur), and west of the city centre (Vesturbær). Below, we will give you a brief description of the area, what you can see and do there, and then provide top accommodation choices. Let’s go!

Miðborg (City Centre)

tall church in city centre iceland where to stay reykjavik
You know you’re heading downtown with Hallgrimskirkja at your back!

Ah yes, downtown Reykjavik. The city centre is also lovingly referred to as “the 101” because of the postal code. This area has developed in recent years to become the heart of the action. It’s hip and trendy – often times loud – but full of action. The most popular streets are Laugavegur (shopping and cafes), which turns into Bankastræti (Bank Street) and then turns into Austurstræti (the mecca of Reykjavik nightlife).

At the end of Austurstræti you will be in the heart of the city centre at Ingólfur Square. There’s a small public park area with hotels, restaurants, and more to check out. The whole city centre is packed with many of the top attractions in Reykjavik like Hallgrimskirkja (the massive famous stone church), The Icelandic Phallological Museum (penis museum – yeah, seriously), City Hall, The Harpa (concert hall), Bæjarins Beztu Pylsur (famous Icelandic hot dog stand), and much more!

town square with grass and statue in daylight where to stay Reykjavik
If you looked to the right – you’d see beautiful Hotel Borg dominating this little park called Austurvöllur!

Basically, if you stay anywhere in the city centre you will be within walking distance of everything important – but it’s not for everyone! There are better areas to stay in the city if you’d like it to be quiet or if you want to stay in a guesthouses. That said, the city centre is popular for a reason – and you can check here for great accommodations in the city centre Reykjavik.

If you know you want to stay here, below are three great accommodations around the city centre of Reykjavik. These hotels and guesthouses provide you a mix of location and styles. We’ve arranged the hotels by budget, so have a look and see if one works for you!

Guesthouse Pavi – Check Now

  • Style:  A Simple & No-Frills Guesthouse
  • Price Range: Budget
  • Location: In a quieter area, very close to Laugavegur and/or the bus stop to the centre.
  • Featured Amenities: Private or dorm rooms, some with private bathrooms, wifi

CenterHotel Plaza – Check Now

  • Style: Stylish Design Hotel
  • Price Range: Mid-range
  • Location: Right in city centre, overlooking Ingólfur Square
  • Featured Amenities: Buffet breakfast, bar, airport shuttle

Hotel Borg by Keahotels – Check Now

  • Style: Elegant and Charming Luxury Hotel
  • Price Range: Luxury
  • Location: Right in city centre, overlooking Austurvöllur
  • Featured Amenities: Art-Deco style, great breakfast, spa and gym on-site


colourful town roofs with blue sky in distance reykjavik hotels accommodations
The cranes (right) are where the hotels below are – in comparison to where Hallgrimskirkja is!

Also sometimes referred to as East Reykjavik, the Laugardalur area is more spaced out but developing. Given the fact that there are less buildings/lights around, this is an area where it’s more likely (still not a guarantee) to see the northern lights if the conditions are right. This area is known to be good for families and there are some great attractions in the east end like the National Football Stadium, Public Pool, Botanical Gardens, and more.

The area is a bit quieter and more residential – but it’s still very possible to walk into the centre or take the bus (easy to access). If you decide to walk you can walk down Suðurlandsbraut, which turns turns into the famous shopping street Laugavegur, and you can head right to the centre. You can check here for accommodations in Laugardalur!

Below are three of the top accommodations in the area. One is a great budget guesthouse, one is a great hotel, and one is a gorgeous eco-friendly place to stay!

Mýrin Guesthouse – Check Now

  • Style: Renovated and Simple Guesthouse
  • Price Range: Budget
  • Location: Quiet area close to Laugavegur, walk or quick bus into the centre
  • Featured Amenities: private bathrooms, fridge and kettle in all, free parking, easy check-in

City Park Hotel Reykjavik – Check Now

  • Style:  Light and Modern Hotel
  • Price Range: Mid-Range
  • Location: Right in the bank of hotels close to where Laugavegur begins to head downtown
  • Featured Amenities: Free buffet breakfast, bar on-site, free parking, friendly staff

Eyja Guldsmeden Hotel – Check Now

  • Style:  Beautiful and Eco-friendly Hotel
  • Price Range: Luxury
  • Location: Actually closer to downtown than the other hotels here – just off of Laugavegur
  • Featured Amenities: sustainable toiletries, great views of the city, tea and coffee always available, great breakfast


colourful houses on bank of lake with birds where to stay reykjavik
This is Tjörnin – and this shore is basically on the edge of where Vesturbær starts from the City Centre.

Located to the west of the city centre, Vesturbær is a sprawling area that includes residential houses, seaside/marina properties, some of the University of Iceland, and more. Compared to the centre (and where you stay in Laugardalur), it might be a tad quieter. The area has a few things to check out (besides the city centre right next door) such as the Saga Museum, The Maritime Museum, Cathedral of Christ the King, and a really, really good ice cream place called Ísbúð Vesturbæjar!

While the area is actually made up of smaller neighbourhoods, most visitors would gravitate towards the “Old West Side” given its proximity to downtown and other top attractions, restaurants, nightlife, etc. If you want to stay in this area, you can check here for accommodations in Vesturbær or check out two of the top places in the area:

Butterfly Guesthouse – Check Now

  • Style:  Cozy and Comfortable Guesthouse
  • Price Range: Lower Mid-Range
  • Location: Technically in Vesturbær BUT basically in the city centre!
  • Featured Amenities: Full guest kitchen, some have kitchenettes, friendly hosts, terrace,

Icelandair Hotel Reykjavik Marina – Check Now

  • Style: Trendy and Minimalist Hotel
  • Price Range: Mid-Range/Luxury
  • Location: Right on the water close to the centre
  • Featured Amenities: Bar, good breakfast, fireplace, movie theatre

Keflavík International Airport (KEF)

airplane taking off with airplane wing in front keflavik airport iceland where to stay
Oh look, the two main airlines who bring you to Iceland!

As always, we wanted to be thorough when talking about places to stay in Reykjavik. So, we included a brief rundown of places to stay near the airport. Now, to be clear – the main airport to fly internationally is Keflavík International Airport (KEF). It is NOT in the city centre – that’s Reykjavik Airport. KEF is about 45 minutes by bus from the city centre – it stops at the BSI Bus Terminal. Here’s a detailed guide on travel from Keflavik to Reykjavik.

In any case, there are a cluster of hotels and accommodations out near KEF airport in smaller towns like Keflavík/Reykjanesbær. They are right on the water which is nice and staying out here will make it less stressful if you have to catch an early flight.

From here, you are also closer to the famous Blue Lagoon – which you can even visit if you only have a few hours to spare from the airport! Here are two top accommodations to check out in this area:

Hotel Keilir by Keflavik Airport – Check Now

  • Style: Clean and Modern Hotel
  • Price Range: Mid-Range
  • Location: Right on the waterfront in Keflavík, close to shopping
  • Featured Amenities: Airport shuttle, breakfast included, bar

Hotel Keflavik – Check Now

  • Style:  Charming and Elegant Hotel
  • Price Range: Mid-Range
  • Location: Right on the water in Keflavík, ocean views
  • Featured Amenities: Breakfast includes, tea/coffee, gym, sauna, one free shuttle transfer to airport.

And there you have it – a rundown of where to stay in Reykjavik. In the end, there are so many great places to stay that we are confident you’ll find something that works for you. Just think about what’s important to you (quiet vs. lively area etc.) and you will be just fine. There are properties to suit all desires across the city. Have a great time in Iceland – and let us know where you end up!

As always, Happy Reykjavik Waddlin’,

Booking Your Trip Soon? This Is How We Do It:
  • Compare flights on Skyscanner
  • Check for Hotel Deals or Book A Hostel
  • Get A Rental Car (depending on the destination)
  • Look Into Travel Insurance
  • Research plug types and possibly get a travel adapter
  • Go over our packing list
  • Pin it for later!

    Where to stay in Reykjavik Iceland