When planning a trip to Iceland, you may 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 the best places to stay in Iceland are, 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, sorted by which tantalising aspect of Icelandic life you're in the mood for.
The best places to stay in Iceland: an expert’s guide
Best for Reykjavík's cultural cool
Downtown Reykjavik © Edwin Verin / Shutterstock
Despite being isolated on an island in the Atlantic Ocean, Reykjavík is a city on par with some of the trendiest in the world. Step aside, Melbourne, New York and Vienna, Reykjavik is where it's at. It's daubed with street art and offers mouth-wateringly good restaurants plus cute cafes and colourful buildings. With and 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 the natural explorations so many come to the island for.
While Iceland is undeniably a more expensive destination, that doesn't mean you have to break the bank when looking for accommodation here. Kex Hostel belongs to the rise of the trendy hostel movement, where style and character is just as important as comfort and ease of social interactions, all on a budget (but a bit more pricey than you'll find at your average stripped-back-to-basics hostel). Regardless, 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, making it one of the best places to stay in Iceland.
Best for Iceland's second city
Akureyrarkirkja church © Francesco Dazzi / Shutterstock
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 Iceland 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, impressive church, Akureyrarkirkja, and stunning surroundings like Lake Mývatn and Dettifoss.
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 breakfast bedside 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.
Best for the northern lights
Aurora display at Thingvellir National Park © Daniel Schreiber / Shutterstock
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 chance to witness 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 puts them among the best places to stay in Iceland.
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, custom benches and a wake-up call when the lights appear.
Located in the Western region of Iceland at the end of Borgarfjordur Valley, you'll be discovering a different set of landscapes with which to provide a backdrop for 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, outdoor hot tubs and northern lights wake-up calls, it has a lot to recommend it.
Best for dramatic landscapes
Iceland's dramatic views draw thousands of visitors a year © Jan Miko / Shutterstock
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 to 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.
ION Hotel doesn't just have an incredible backdrop, given it's 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 that makes the hotel as dramatic as the scenery that surrounds it, and its sleek interior is nature-focused with driftwood sculptures and furnishings made from recycled materials. Close by, you have enough to keep you entertained to 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.
Best for Iceland's geothermal hot springs
The Blue Lagoon © Bhushan Raj Timla / Shutterstock
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 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.
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 for guests.
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 for the title of one of the best places to stay in Iceland. 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 overlooking pure nature and only big enough to fit 2 or 3 people. It takes a little effort to find, but it's worth it when you do, plus you get to return to Hotel Budir.
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