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The Best Places to Stay in Reykjavik

A Guide to Hotels, Hostels, Guesthouses, and Airbnbs in Iceland’s Capital

|August 9, 2019
Emma is a writer & editor from the United States. She's currently living in Europe to learn and write about her favorite places full time.

Booking a hotel in any city that you don’t know well can be a daunting prospect. From luxury hotels to budget hostels — you name it, Reykjavik has it. Lucky for you, our handy guide on where to stay in Reykjavik is here to help.

Best Places to Stay in Reykjavik

rainbow painted street in iceland in reykjavik

Reykjavik is a vibrant and modern city that offers many different places to stay. The best location largely depends on what you want to do during your time in Reykjavik

If you want to be in the heart of the city, then look for places in Miðborg. This downtown neighborhood is home to most of Reykjavik’s bars and clubs and a great selection of tourist attractions. If you’re looking for something quieter but still near the center, then you should check out Vesturbær, Hlíðar or Laugardalur.

Neighborhoods in Reykjavik

First off, let’s figure out which neighborhood you want to stay in. Reykjavik is divided into 10 districts. Each one has its own charms and quirks appealing to different types of travelers. Below is our guide to each neighborhood (complete with postal codes!): 

Miðborg – Downtown/City Center – 101

Miðborg is the beating heart of Reykjavik and the most popular district with visitors to Iceland. It’s home to many of Reykjavik’s most famous attractions, bars, restaurants, and nightlife. Walk downtown and admire the colorful houses that line the streets. If you want to be in the epicenter of Reykjavik, look no farther than Miðborg. 


Vesturbær – West Town – 107

Vesturbær is a popular residential neighborhood. Surroundings include Reykjavik Harbor and the University of Iceland. Vesturbær also borders Miðborg, allowing easy access to the city center. This district is ideal for people who want to be close yet slightly removed from the action. 

Hlíðar – 105

Hlíðar is another central residential district that borders Miðborg. It has more open green space than anywhere else in the city. Hlíðar provides easy access to the city center without being directly in it, making this neighborhood the place for visitors looking for a quieter stay.

Laugardalur – 104

A quiet residential neighborhood suited to families, Laugardalur has plenty of comfortable cafés and peaceful parks. It also offers plenty of family-friendly activities, including the Reykjavik Zoo and the city’s largest swimming pool. 

Háaleiti – 108

Háaleiti is a quiet suburban district with excellent transportation into the city. It offers easy access to the sea and nature areas around the city, making it perfect if you want the best of both worlds. 

Breiðholt - 109

One of the most populous districts in Reykjavik, Breiðholt is removed from the city center and a good choice for people seeking a cheaper stay in the capital. 

Grafarvogur – 112

A large suburb on the outskirts, Grafarvogur is a good choice if you're seeking peace and quiet during your stay. 

Árbær - 110

A historical district at the very edge of the city. It’s a good place to stay if you’re interested in exploring places outside of Reykjavik. 

Grafarholt – 113

The most modern part of Reykjavik, Grafarholt is quite far away from the center but provides good transportation.


A remote part of the city that is most famous for Mt. Esja, Kjalarnes is best accessed by bus from downtown. The neighborhood is 19 miles from the city center and most suitable for people who want to be far away from the bustle of Reykjavik. 

When is the best time to book a hotel in Reykjavik?

colourful rooftops in winter in reykjavik

The demand for hotels in Reykjavik is high. We recommend booking your hotel as early as possible. You’ll get the best value if you book around six months in advance. 

We don’t suggest booking any later than four months in advance, as hotels tend to be fairly full by then. This is especially important when Reykjavik is at its busiest during the summer (June–August) and around Christmas.

How much do hotels cost in Reykjavik?

red house in a street in reykjavik in iceland

Hotel prices tend to vary a lot depending on the quality and the time of year that you visit. Below is a rough guide to the costs of a hotel in Reykjavik:

  • Hostel (bed in a dorm)  Prices range according to the season. A bed in a mixed dorm will cost $20-60 a night depending on demand and how early you book.
  • Simple hotel room for two adults  Prices range according to the season, but a basic room for two adults will cost $60-140 a night.
  • Room for two adults in a good hotel - Prices range according to the season, but a good room will usually cost from around $170-260 a night. 
  • Luxury offerings  Prices range according to the hotel and the season. However, you should expect to pay in excess of $260 a night.  

Best Luxury Hotels in Reykjavik

alda hotel in reykajvik room view

Reykjavik has a great selection of luxury hotels for travelers who really want to treat themselves during their stay. 

Hotel Borg. Reykjavik’s original luxury hotel. With Art Deco style and excellent amenities, Hotel Borg is the perfect choice for anyone looking to pamper themselves on vacation.

Tower Suites Reykjavík. Eight luxury suites on the 20th floor of one of Reykjavik’s most iconic buildings, for those who are looking for the best view in the entire city.

Canopy by Hilton Reykjavik. A luxury hotel that displays the best of Icelandic culture. This Hilton’s walls are decorated with local artworks.

Alda Hotel. An authentic Scandinavian hotel in downtown Reykjavik, many of Alda’s rooms have striking views over Faxaflói Bay. 

Best Budget Hotels in Reykjavik

fosshotel building view in reykjavik

Reykjavik has some great value options for travelers seeking value. Here are some of our favorite hotels for those on a budget:

Fosshotel Reykjavík. A large hotel not far from the city center, Fosshotel is great for business travelers and people on a budget. 

Icelandair Hotel Reykjavik Natura. A pleasant, family-friendly hotel, slightly removed from the city center. Icelandair Hotel offers excellent value, along with a spa, pool, and fitness center. 

CenterHotel Arnarhvoll. A value hotel located close to Reykjavik Harbor. Many of CenterHotel Arnarhvoll’s rooms have stunning views over Faxaflói Bay.

CenterHotel Plaza. Situated in the heart of Reykjavik’s Old Town, this hotel provides great value in a central location. 

22 Hill Hotel. A small hotel in a fairly central location. 22 Hill offers a no-frills experience, guaranteeing a comfortable night’s sleep and a happier wallet. 

Best Boutique Hotels in Reykjavik

scandinavian architecture houses in iceland in reykjavik

Reykjavik offers a wide selection of boutique hotels that blend history and style for the more discerning traveler. Here are some of our favorite boutique hotels in Reykjavik: 

101 Hotel. An eccentric boutique hotel in the middle of downtown Reykjavik. The walls are adorned with local artwork and the hotel has an excellent selection of amenities, including a pool and gym.

Reykjavik Residence. An elegant boutique hotel providing well-designed apartments in the center of downtown Reykjavik. 

Kvosin Downtown Hotel. Set in a historic building that dates back to the 19th century, Kvosin features a cool Scandinavian vibe. 

Apotek Hotel. Fixed in a historic building that was once Reykjavik’s main pharmacy, Apotek has a classy Art Nouveau interior that’s easy to appreciate.

Eyja Guldsmeden Hotel. A stylish boutique hotel in one of Reykjavik’s residential districts. This is the perfect place for families and travelers who want a quieter night in Iceland’s capital. 

Best Guesthouses in Reykjavik

Reykjavik has a great variety of guesthouses offering basic rooms and shared kitchen facilities for travelers seeking a bit of independence during their stay. 

Central Guesthouse Reykjavik. A simple budget guesthouse close to the center of Reykjavik, only a 7-minute walk to Tjörnin Lake. 

Sunna Guesthouse. A centrally located guesthouse with three-star amenities, a shared kitchen, and thoughtfully designed rooms.

Freyja Guesthouse and Suites. A modern guesthouse in a mostly residential part of downtown Reykjavik, about a 3-minute walk to the Harpa Concert Hall. 

Guesthouse Galtafell. A three-star guesthouse located close to the center of town, set in the former home of a famous Icelandic artist. 

Centric Guesthouse. A central guesthouse close to Tjörnin Lake that offers simple rooms and a shared kitchen.

Best Hostels in Reykjavik

sunny summer day in reykjavik near a lake

Reykjavik has a great selection of hostels for travelers on a budget. Most offer dorms, though some have options for private rooms or futuristic pods. 

KEX Hostel. A charming and eclectic hostel located in a former biscuit factory, KEX is famous for its vintage Art Deco and live music performances. 

Hlemmur Square Hostel. Set in an old Art Deco building, this hotel and hostel combination offers dorms and private hotel rooms to suit a wide range of needs.

Galaxy Pod Hostel. A futuristic hostel offering private pods. Galaxy Pod is great for visitors who want their own space but don’t mind small parameters. 

Reykjavik City HI Hostel. A popular budget hostel in a more residential part of town, Reykjavik City HI is ideal for those who want to be somewhat removed from the city center. 

Loft Hostel. A community hostel that organizes regular events every month. Loft Hostel includes a popular 4th-story balcony bar and enough books to last you a lifetime.

Reykjavik Hostel Village. This excellent budget hostel in downtown Reykjavik is located close to the BSI bus station, making getting around a breeze. 

Bus Hostel. A boutique hostel with tons of art on the walls, Bus Hostel is suited for travelers who desire an eccentric stay with like-minded people. 

Airbnbs in Reykjavik

Airbnb operates throughout Reykjavik with a great selection of rentable homes that can accommodate every type of traveler. Prices tend to vary according to the season, but it costs around $120 a night for a shared private room and around $220 a night for an entire apartment during peak season. We recommend booking well in advance to avoid increased prices. It’s also a good idea to stick to hosts who have positive reviews in order to avoid scams or late cancellations.

Now that you found the best place to stay in Reykjavik to suit you, it's the right time to look for Reykjavik tours

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