Find the best places to stay in Iceland to capture the highlights of this thoroughly scenic country. From deluxe Iceland hotels to remote guesthouses in sublime locations, read on for our curated pick of the best accommodation in Iceland.
Since our first trip to the land of fire and ice, hotels in Iceland have responded to the increase in visitor numbers with style and consideration.
Several of the less-visited destinations are building new lodgings with impressive sustainability credentials and design elements that are sympathetic to Icelandic style, while minimising the visual impact on the environment.
Like many things in the country, hotels in Iceland are not cheap. But the standards are high, and you can expect comfortable beds, clean, inviting spaces and friendly, efficient service.
We’ve been to Iceland several times, finding both cool and traditional Icelandic accommodation that continues to make the more remote destinations accessible, and provide stylish stays in popular locations.
We’ve organised these great places to stay in Iceland by the main areas spread across the country so you can find the right hotel in the right location.
Booking your trip via the links on this page (or on our book page) will earn us a small commission, at no extra cost to you. Thanks for your support – Paul & Mark.
1 – REYKJAVÍK & SOUTHWEST ICELAND
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.
Stay in this part of the country for the impressive nearby attractions including the Golden Circle, the Blue Lagoon and the Fagradalsfjall volcano which erupted recently.
You’ll find high-end luxury hotels in Reykjavík as well as budget lodgings, mid-priced guesthouses and hotels with plenty of facilities that are ideal for families.
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.
NORTHERN LIGHT INN – Grindavik
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 BORG BY KEAHOTELS – Reykjavik
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 ambience.
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 REYKJAVÍK EDITION – Reykjavik
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.
2 – VÍK & SOUTHERN ICELAND
Best place to stay in Iceland for adventure activities and Iceland’s popular attractions
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 to stock up on any services you might need.
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.
VĪK HOTEL VÍK Í MÝRDAL – Vík
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.
GLACIER VIEW GUESTHOUSE – Hrífunes
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.
HOTEL KRATLA BY KEAHOTELS – near Vík
Located just outside Vík, Hotel Kratla 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.
3 – HÖFN & SOUTHEAST ICELAND
Best place to stay in Iceland for remote experiences and the Jökulsárlón Glacier Lagoon
Towards the southeast of Iceland, the massive glacier of Vatnajökull dominates the horizon. There is little civilisation 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 mesmerising Jökulsárlón Glacier Lagoon.
The southwest is also a great base to visit Vestrahorn – a rocky mountainous peak overlooking the ocean. It’s basic Iceland accommodation, but a fantastic experience.
HÖFN HOSTEL – Höfn
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.
GUESTHOUSE NYPUGARDAR – Nypugardar
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.
SELJAVELLIR GUESTHOUSE – Seljavellir
Close to Jokularson Ice Lagoon, Seljavellir Guesthouse has a Scandi design with clean modern lines and a cosy warm feel. Each room has a private bathroom and there are great views over the mountains and glaciers. Breakfast is worth sticking around for.
4 – SEYÐISFJÖRÐUR & THE EASTFJORDS
Best place to stay in Iceland for visiting the Eastfjords and their fascinating natural scenery
Seyðisfjörður is a charming colourful village in the east of Iceland and the most attractive base for visiting the Eastfjords. It’s beautifully set, surrounded by snow-capped mountains and waterfalls.
East Iceland is characterised 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 accommodation in Seyðisfjörður and several great restaurants, making it an ideal base to explore the area.
SEYÐISFJÖRÐUR GUESTHOUSE – Seyðisfjörður
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.
HENGIFOSS GUESTHOUSE – Valþjófsstaður
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, 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 their key selling point.
5 – HÚSAVIK, MÝVATN & THE NORTH
Best place to stay in Iceland for whale watching and unique volcanic geology
The central north region of Iceland contains a host of natural attractions including interesting lava formations, a unique geothermal wasteland, pseudo craters and access to several prominent waterfalls.
Mývatn is a great base for exploring the areas rich geological features. 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.
FOSSHOTEL MÝVATN – Mývatn
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.
HÓTEL LAXÁ – Mývatn
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.
FOSSHOTEL HÚSAVIK – Húsavik
Like their sister property in Mývatn, the Fosshotel Húsavik has 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 harbour where the whale-watching tours depart.
ÁRBÓL GUESTHOUSE – Húsavik
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 harbour it’s in a great location to make the most of the area.
6 – ÍSAFJÖRÐUR & THE WESTFJORDS
Best place to stay in Iceland for a remote side of the local lifestyle
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.
GUESTHOUSE STEKKABÓL – Stekkaból
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
Taking up a beachside position in the settlement of Holt near Flateyri, the Holt Inn is surrounded by rugged and remote landscapes making it feel like you’re really getting away from it all. 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.
MALARHORN GUESTHOUSE – Drangsnes
Tucked in the southeastern end of the fjords, 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.
HOTEL ÍSAFJÖRÐUR – Ísafjörður
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.
7 – SNAEFELLSNES & WEST ICELAND
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 accessibility of the region means there is a wide selection of accommodation options, covering everything from budget homestays to high-quality hotels.
THE BOOKSTORE FAMILY APARTMENT – Hellissandur
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.
KIRKJUFELL GUESTHOUSE & APARTMENTS – Grundarfjordur
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.
SODULSHOLT COTTAGES – Sodulsholt
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.
PLANNING YOUR ICELAND TRIP
Iceland is an excellent destination for semi-adventurous travellers 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.
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GENERAL TRAVEL TIPS
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
OTHER GREAT DESTINATIONS
How to visit the Fagradalsfjall Volcano
How to visit Vestrahorn, Iceland
Complete guide to Landmannalaugar
Visiting Thórsmörk in the highlands
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