So you’ve booked your ticket to Iceland—amazing choice! Now comes the big question: where should you stay? Whether you’re chasing the Northern Lights, road-tripping the Ring Road, or just soaking in all the rugged beauty this island has to offer, picking the right place to rest your head is key.
In this guide, I’ll walk you through the best places to stay in Iceland—from cozy guesthouses in tiny fishing villages to unique stays in Iceland like glass igloos and eco-lodges. Whether you’re sticking to accommodations in Reykjavik and beyond, or curious about Iceland towns for travelers, I’ve got you covered with local insight and honest Iceland travel tips to help you plan the perfect sleepover in the land of fire and ice.
The breathtaking and distinctive Iceland is renowned for its glaciers, volcanic activity, waterfalls, stunning landscapes, and overall natural splendor. It provides a variety of experiences, such as hiking on glaciers, exploring geysers and hot springs, and unwinding in the well-known Blue Lagoon. Here are some great areas and accommodations where to stay in Iceland.
Where To Stay In Iceland: Best Towns, Hotels & Unique Places to Sleep Under the Stars
When it comes to Iceland accommodations, there’s truly something for every type of traveler. From budget hotels in Iceland perfect for backpackers and adventurers, to jaw-dropping luxury resorts in Iceland with spa views of volcanoes and glaciers, choosing the right stay can totally level up your trip. Want to stay close to the action? There are plenty of places to stay in Reykjavik that keep you within walking distance of Icelandic culture, food, and nightlife.
Outside the city, you’ll find cozy Iceland guesthouses, remote cabins, and even Northern Lights hotels in Iceland that give you front-row seats to the Aurora Borealis. Whether you’re traveling solo, with a partner, or on a family adventure, this Iceland travel guide will help you discover the best hotels in Iceland, including lesser-known gems and local favorites.
Reykjavik (Capital City)
The center of Iceland is Reykjavik, which boasts a thriving arts scene as well as top-notch eateries, pubs, and retail establishments. It’s also the most practical location to stay, particularly if you intend to take day trips to neighboring places or see well-known attractions like the Golden Circle.
· Canopy by Hilton Reykjavik City Centre
A chic, modern hotel in the heart of the city, ideal for those who like to visit its cafes, stores, and cultural attractions. The Canopy by Hilton Reykjavik City facility in Reykjavík has a fitness facility and a bar, and it’s only a 2-minute walk from Laugavegur Shopping Street. The Harpa Concert & Conference Center is 1640 feet away from the hotel.
· Hotel Borg by Keahotels
A posh, old-world hotel in the center of Reykjavik. It combines contemporary conveniences with the traditional Art Deco design. Excellent for people who like to be close to the main attractions in Reykjavik.
North Iceland
Known as the “Capital of North Iceland,” Akureyri is a quaint town that makes an excellent starting point for seeing the Lake Mývatn region, the Dettifoss waterfall, and Húsavík, a popular whale-watching location. Accommodations in Akureyri range from premium hotels to inexpensive guesthouses.
· Hotel Kea
The second-largest city in Iceland, Akureyri, is home to this traditional, chic hotel. For those who like to explore the city, its stores, and the surrounding natural attractions, it’s excellent.
· Icelandair Hotel Akureyri
This hotel, which is close to Akureyri’s picturesque harbor, provides cozy accommodations and first-rate service. It makes an excellent starting point for visiting the neighboring Lake Myvatn and the Godafoss Waterfall.
South Iceland
The south coast of Iceland boasts breathtaking natural beauty, including the famous black sand beaches at Reynisfjara and waterfalls like Seljalandsfoss and Skogafoss.
· Fosshotel Glacier Lagoon
This stylish hotel is close to the Vatnajokull Glacier and provides a comfortable, luxurious stay with breathtaking views of the surrounding area and glaciers. An excellent starting point for visiting Diamond Beach and Jokulsarlon Glacier Lagoon.
· Hotel Ranga
In the center of Iceland’s South Coast, this opulent hotel offers breathtaking views of the surrounding rivers, glaciers, and volcanoes. It is well-known for its great service, outdoor hot springs, and close access to Skogafoss and Seljalandsfoss.
West Iceland
Because it combines Iceland’s many landscapes—glaciers, black sand beaches, volcanoes, and coastal cliffs—the Snaefellsnes Peninsula is frequently referred to as “Iceland in miniature.” In comparison to the rest of Iceland, West Iceland is also more peaceful. The Snaefellsnes Peninsula, volcanoes, and wilderness are its best features.
· Fosshotel Stykkisholmur
Situated in the little hamlet of Stykkisholmur, this modernist hotel is a great place to explore the Snaefellsnes Peninsula, which is renowned for its stunning coastlines and volcanic scenery.
· Hotel Búdir
Situated in the center of the Snaefellsnes Peninsula, this hotel is warm and romantic. It is a great place to explore this less visited but gorgeous area and gives lovely views of Snaefellsjökull Glacier.
Southeast Iceland
It’s best to stay close to the Jökulsárlón Glacier Lagoon or Skaftafell National Park if you want to see Iceland’s glaciers and the breathtaking lagoon. There are accommodations close to the lagoon, including the South Coast Hotel, and comfortable guesthouses, like the Hali Country Hotel. There are also ice cave tours available in this area if you’re feeling adventurous.
· Hali Country Hotel
The quaint, family-run Hali Country Hotel is situated near some of Iceland’s most breathtaking natural landmarks on the country’s south coast. The hotel is an excellent starting point for seeing Vatnajökull National Park, Diamond Beach, and the Jökulsárlón Glacier Lagoon. It’s especially well-liked by tourists who want a cozy, genuine Icelandic experience while visiting the South Coast.
· South Coast Hotel
The contemporary 4-star Hotel South Coast is located in Selfoss, Iceland, about 58 kilometers from Reykjavík and 96 kilometers from Keflavík International Airport. The hotel has received compliments for its contemporary style, cozy rooms, and handy location. Particularly valued are the wellness centers and easy access to nearby attractions.
Golden Circle Area
Staying in this area might make it easy for you to tour the well-known Golden Circle road, which passes through Thingvellir National Park, the Gullfoss waterfall, and the Geysir geothermal area. Charming guesthouses, hotels, and even eco-lodges, such as the Frost and Fire Hotel in Hveragerði, can be found in the countryside.
· Hotel Geysir
The well-known Geysir Hot Springs and Gullfoss Waterfall are also close to this sophisticated hotel. With modern conveniences and a welcoming ambiance, it’s a great spot to stay while seeing the Golden Circle.
· Ion Adventure Hotel
Situated close to Thingvellir National Park, this hotel boasts a stylish, minimalist style and breathtaking views. With quick access to hiking trails and the outdoors, it’s ideal for those looking for adventure.
Conclusion
Iceland has some of the most amazing natural scenery in the world, so wherever where to stay in Iceland, you’re guaranteed Iceland offers a diverse landscape and a variety of accommodations, with Reykjavik being the capital city and North Iceland offering budget guesthouses and boutique hotels. The south coast features natural beauty with luxury hotels like Hotel Ranga and Fosshotel Glacier Lagoon.
The southeast coast offers cozy guesthouses and accommodations near glaciers and the Jökulsárlón Glacier Lagoon, providing travelers with a comfortable, authentic Icelandic experience.
