The best places to stay in Iceland: an expert's guide

written by Kirsten Powley
updated 8/10/2020
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When planning a trip to Iceland , you may suddenly realise that you've hit the destination jackpot. No matter where you are in the country, there is something spectacular nearby, whether that's great food, dramatic and rugged mountainous landscapes, powerful waterfalls or charming fishing villages. What can be much harder to figure out is where to stay in Iceland, depending on your priorities. Northern lights? City life? Dramatic landscapes? Fear not – when the planning gets a bit overwhelming, that's where we come in. We've put together a list of the best places to stay in Iceland, depending on which tantalising aspect of Icelandic life you're in the mood for.

Best for Reykjavík's cultural cool

Despite being isolated in the Atlantic Ocean, Reykjavík is a city on par with some of the trendiest in the world. It's daubed with street art and offers mouth-wateringly good restaurants plus cute cafes and colourful buildings. With all the Icelandic culture we've come to love internationally, you'll be missing out if you don't spend at least some time here. What's more, it truly does make a great base for getting out into nature.

Downtown Reykjavik © Edwin Verin/Shutterstock

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Kex Hostel

While Iceland is undeniably an expensive destination, that doesn't mean you have to break the bank when looking for accommodation here. Kex Hostel is part of the rise of a trendy hostel movement, where style and character are just as important as comfort. This all comes in on budget (but a bit more pricey than you'll find at your average back-to-basics hostel). Kex Hostel has dorms or private rooms and plenty of amenities, such as a cafe-bar, lounge that hosts local gigs and a gym. It's also in a brilliant location for city exploration.

Radisson Blu Saga Hotel

Located 10 minutes from the historic city centre in the west-town area of Reykjavik, Radisson Blu Saga perfectly gives you close proximity to the city as well as some serenity if crowds become too much. Add to this their simple but modern rooms and renowned restaurant, Grillið, which sits atop the hotel, providing panoramic views of the city, and you've got one of the best places to stay in Iceland.

Best for Iceland's second city, Akureyi

Sure, Reykjavik has the main international airport nearby and is effortlessly cool, but it isn't the only city to stay in that will give you an insight into Icelandic life. Take Akureyri , the second most populous city in Iceland (yet still only with a population of less than 20,000). Located at the base of a fjord in northern Iceland, this pulsing city of the north offers excellent winter skiing, eclectic cafes and restaurants, an impressive church, Akureyrarkirkja, and stunning surroundings like Lake Mývatn and Dettifoss.

Akureyrarkirkja church © Francesco Dazzi / Shutterstock

Hotel Kea

Hotel Kea is right in the middle of Akureyri, positioned at the base of Akureyrarkirkja (Akureyri Church), with some rooms with spectacular views of the Eyjafjördur Fjord. It's worth checking out the Múlaberg Bistro & Bar, where you can get your fix of Icelandic dishes with a French influence. Hotel Kea is also only a short walk from Akureyri Botanical Garden.

Icelandair Hotel Akureyri

The Icelandair Hotel takes on Scandinavian chic in Akureyri with its shaggy rugs and blankets – perfect to cosy up with after a swim at the pool right across the street, or after a day's skiing. The comfort continues with the over-bed breakfast tables that come with every room, meaning that if it's chilly in Iceland's capital of the North, you don't even have to get out of bed to enjoy the views over a cup of coffee.

Best for the northern lights

The northern what? Just kidding – Iceland is pretty much synonymous with the northern lights, and for good reason. Between November and March, you're in with a pretty good chance of witnessing the colourful, wispy curtain dangling in the sky that makes up the sought-after Aurora. And as long as you stay away from too much light pollution (and are blessed with some luck from the weather gods), you can choose from hotels all around the country where a focus on viewing the northern lights makes them some of the best places to stay in Iceland.

Aurora display at Thingvellir National Park © Daniel Schreiber / Shutterstock

Hotel Rangá

Only a two hour drive from the Keflavík international airport in Hella, Hotel Rangá is renowned as an excellent place from which to view the northern lights. Anyone who's attempted to see the Aurora display, only to be left frozen and shivering in the cold, will be glad to hear that Hotel Rangá makes the viewing experience as comfortable as possible. This includes a balcony that wraps around the bar, thick blankets and a wake-up call when the lights appear.

Hotel Húsafell

Located in the Western region of Iceland at the end of Borgarfjordur Valley, you'll be discovering a different set of landscapes to enjoy with your northern lights experience at lodge-style Hotel Húsafell. The display can appear several times a week here (in the winter, when conditions are right), making this one of your safest bets if an Aurora display is your aim. With an elegant Nordic design, sustainable energy-saving ethos, outdoor hot tubs and northern lights wake-up calls, it has a lot to recommend it.

Best for dramatic landscapes

From craggy mountains to thundering waterfalls, Iceland's landscapes are one of the main reasons people visit the country, so it only makes sense to stay within close vicinity of them. We recommend you pick your must-do attractions and go from there. By sticking close to them, you can make sure you're the first on the scene and have the spectacular scenery all to yourself – at least until the tour buses arrive.

Iceland's dramatic views draw thousands of visitors a year © Jan Miko / Shutterstock

ION Hotel

ION Hotel doesn't just have an incredible backdrop in Thingvellir National Park, set against mountainous lava fields. The architecture of the hotel itself is something to write home about. The building juts out of the rocks, balanced on pillars for a dramatic appearance, and its sleek interior is nature-focused with driftwood sculptures and furnishings made from recycled materials. The natural attractions on your doorstep make this easily one of the best places to stay in Iceland. The Geysir, diving at the Silfra drift, the Kerið volcanic crater and the Golden Circle are all within reach.

Fosshotel Glacier Lagoon

Located right between two very popular attractions in Iceland, Skaftafell National Park and Jökulsárlón Glacier Lagoon, Fosshotel Glacier Lagoon is certainly up there when it comes to looking for your base to dramatic landscapes in the country. The modern hotel with a slick design means and a decent restaurant means you'll have a comfortable and stylish end to a day in the wilderness, whether that's among the huge ice blocks at Jökulsárlón Glacier Lagoon or viewing Svartifoss Waterfall in Vatnajökull National Park.

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Best for Iceland's geothermal hot springs

In winter, they provide a cozy respite from the cold, and in the summer, they're just pure luxury. Iceland's hot springs, powered by the geothermal activity that's so abundant on the island, are worth visiting any time of year. The types of springs can range from huge, famous attractions like the Blue Lagoon, to secret hideaway pools dotted in the countryside.

The Blue Lagoon © Bhushan Raj Timla / Shutterstock

Silica Hotel

Part of Iceland's Blue Lagoon resort, this is the ultimate relaxation escape for anyone looking to take advantage of the geothermal activity for which the country is so well known. A stone's throw away from mineral-rich waters and mud-mask heaven, the rooms themselves at Silica Hotel are minimalist, modern and comfortable. If you're worried about whether the Blue Lagoon is truly worth the trip or that it's too busy, this hotel has its own, much less crowded lagoon, just for guests.

Hotel Budir

Situated on the Snaefellsnes peninsula, on a beach near a lava field, the romantic and elegant Hotel Budir has an amazing restaurant, top service and feels entirely remote. For us, it's a winning combination. The proximity to a hot spring here is a stark contrast to Silica Hotel: Hotel Budir serves as a good base for Landbrotalaug pool, a small and intimate natural spring only big enough to fit 2 or 3 people. It takes a little effort to find, but it's worth it when you do.

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Travel advice for Iceland

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written by Kirsten Powley
updated 8/10/2020
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