Planning a visit to Iceland’s capital city and wondering what are the best areas to stay & the best hotels in Reykjavik? In this guide, we feature the VERY BEST accommodation options at the BEST location in town, for all budgets. Find out!
No matter when or for how long you visit Iceland, you’ll probably spend some time in its capital city Reykjavik. And rightly so – there’s now so much to see and do in Reykjavik!
If you are visiting Iceland for just a few days (and definitely if traveling in Iceland in winter), Reykjavik is a good base for sightseeing. But even if you are planning a road trip in Iceland, you’re likely to start and end your trip in Reykjavik.
One of the most commonly asked questions we get from our readers is where to stay in Reykjavik. Where to stay for sightseeing in the city, for tours and day trips nearby, for northern lights, for the domestic airport, when traveling by car, or when using the airport transfer, etc. etc.
Reykjavik is not a big city and the center is very walkable. However, figuring out where to stay in Reykjavik requires a bit of research. The biggest challenge lies in finding the best-located accommodation within your budget.
In this guide, we focus on the best neighborhood to stay in Reykjavik and feature the best centrally-located Reykjavik hotels and accommodations for all budgets.
Instead of listing all the neighborhoods and all the lodging in and around Reykjavik, this article is meant to give you the very best options only. This should save you time on research and all the guesswork and help you find the best Reykjavik accommodation for your trip. Find out!
Best Area to Stay in Reykjavik
Miðborg (Midborg) is the downtown neighborhood of Reykjavik where you’ll find most shops, cafes, restaurants, bars, and tourist sights. It’s also known as Reykjavik 101 area. It’s the heart of the city and by far the best place to stay in Reykjavik.
Whether you are staying in Reykjavik for one night or for a week, this neighborhood is the best place to base yourself. However, Midborg is big and some places are quite far away from the main tourist areas.
The best area to stay in Reykjavik is in the center of town, north of Hallgrimskirjka, the main church of Reykjavik. We indicated this part of Midborg on our map of central Reykjavik below.
This part of the city is centrally located for sightseeing and you can easily explore the main sights of Reykjavik on foot. It’s also an area where all the tours will pick you up and it’s quite easy to reach with an airport transfer from Keflavik (Reykjavik’s international airport). Reykjavik’s domestic airport is also nearby.
So all our recommendations for the best hotels and accommodation in Reykjavik are only focused on this area. See a short summary here below or read on for a complete selection of the best places to stay in Reykjavik city center!
BEST REYKJAVIK HOTELS IN A NUTSHELL:
* LUXURY: Tower Suites Reykjavik.
* MORE AFFORDABLE LUXURY: Canopy by Hilton.
* MID-RANGE: Midgardur by Center Hotels or CenterHotel Plaza.
* BUDGET: Guesthouse Galtafell.
* LOWEST BUDGET: Guesthouse Pavi.
* WITH PARKING: $$$ Eyja Guldsmeden Hotel $$ Fosshótel Rauðará.
* BEST VIEWS: $$$$$Tower Suites Reykjavik $$$CenterHotel Arnarhvoll $$$ Icelandair Hotel Reykjavik Marina.
Below, you can find our hand-picked recommendations for the best hotels in Reykjavik city center. Please note that there are many more options than we mention here, but in order not to overwhelm you, we feature only the best Reykjavik hotels per category (best location, best views, etc.) and for all budgets.
Our criteria include things like location, price-quality ratio, customer reviews, and facilities. Instead of listing several very similar hotels, we opted for just a few options, but for all budgets. That way, you can always find the best suitable lodging for your needs and your budget. Take a look!
Complete guide to Reykjavik Hotels – OVERVIEW
- Hotels with the best location
- Most popular hotels
- Budget hotels in the city center
- Hotels with FREE & EASY parking
- Hotels with best views
- Best luxury hotels in Reykjavik
- Where to stay for Northern Lights
- Accommodation for families
- Hotels with airport transfer
- Where to stay near Reykjavik Domestic Airport
Reykjavik Hotels with the Best Location for Sightseeing
If you are looking for the best-located hotels in Reykjavik, take a look at our selection below. We feature several hotels for all budgets, from high price to low.
- Reykjavik Residence Apartment Hotel. This 4* hotel features studios, suites, and apartments for all group sizes. It combines hotel services with self-catering facilities giving you complete freedom and also a possibility to save money for dining. It has a quiet yet very central location, within walking distance to everything in the city center. No wonder that it’s one of the best sellers in Reykjavik on Booking.com.
- Canopy by Hilton. This modern 4* hotel has rooms and suites for 1-3 people. It’s our readers’ favorite, the hotel we see mentioned in our Iceland and Scandinavia travel group on Facebook time and again.
- Sand Hotel by Keahotels. This is a boutique hotel with an excellent location in the heart of Reykjavik. With competitive rates that usually include breakfast, this hotel offers great value in its price range. Also one of the best sellers in Reykjavik!
- Hotel Frón. This 3* hotel is one of the best price-quality-location hotels in Reykjavik. A very popular choice and if you get breakfast included in the rate, this hotel offers some of the best value for your money in the most central location.
- Hotel Ódinsvé. This 4* hotel offers an excellent location and facilities at a somewhat lower price. It’s located in a very busy area with restaurants and shops, so it can get a bit loud if you decide to open a window. Nevertheless, a very popular and highly-rated choice.
- Reykjavik Downtown Hotel. Simple 3* hotel just a short walk from Hallgrimskirkja church. Excellent location at a somewhat lower price.
TIP: If you rather make a quick a quick choice yourself, you can use the map below to easily compare hotels, apartments, and short-term rentals in Reykjavik city center. Simply insert your travel dates and group size and you’ll quickly see all the best options in the very best area. Check it out!
Most Popular Hotels in Reykjavik City Center
Below is a selection of the most popular hotels in Reykjavik city center. Some of them are located just a bit further away, but all of them are still within an easy walking distance from the main areas, shops, and restaurants.
All these hotels are good for sightseeing in the city and also for taking tours and excursions from Reykjavik.
Also here, we feature a few of the most popular Reykjavik hotels for all budgets, sorted approx. from the most expensive to the cheapest.
- Black Pearl Apartment Hotel. This is one of the most luxurious hotels in the city center. If you are looking for a luxury stay at a beautiful apartment-hotel in the center of Reykjavik, this is an excellent choice. Great for bigger families or groups of friends who value privacy and luxury.
- Sand Hotel by Keahotels. This is one of the best-selling 4* Reykjavik hotels. If you are looking for some more-affordable luxury in the best location, you can’t go wrong with this choice.
- Reykjavik Residence Apartment Hotel. Already mentioned for its great location, this 4* hotel is also one of the most popular choices in central Reykjavik. It’s also great for bigger families and offers self-catering option in addition to hotel facilities.
- Icelandair Hotel Reykjavik Marina. A very popular 4* hotel close to the harbor. Some of the best customer reviews in its price range. Excellent choice with rooms in different budget categories.
- Midgardur by Center Hotels. This is a beautiful 4* hotel just a bit further away from the main sights. Nevertheless, it’s within walking distance from everything and it offers great value for the price.
- CenterHotel Plaza. This 3* modern hotel is one of the top picks in central Reykjavik. It’s located on the western end of the city center, close to the lake, to the harbor, several museums, and many restaurants. This is one of the best price-quality-location hotels in Reykjavik.
- CenterHotel Arnarhvoll. This 4* hotel located close to the waterfront is another popular pick in the city center. Its location next to the big road also makes it easy to get to by bus, so it’s easy for tours or airport transfers. Sea view rooms available.
- Hotel Frón. This highly-rated 3* hotel was already mentioned in our selection of the best-located hotels in Reykjavik. Excellent value within mid-range budget.
- Guesthouse Galtafell. Just on the outskirts of the most central district in Reykjavik, this guesthouse is a very popular choice for those looking for a good location and excellent quality at a somewhat lower budget. Just 5 min walk from the BSI bus terminal, it also allows you to save some money by booking a cheaper airport transfer.
Best Budget Hotels in Central Reykjavik
As already mentioned, accommodation in Reykjavik isn’t cheap. Especially if you stay in the best area. And while there are cheaper options too, central location can save you money on transportation, so it’s usually worth it.
In our selection below, we feature the best budget hotels in Reykjavik. ‘Budget’ is relative in such an expensive destination as Iceland. As the main criteria, we focused on the price and only feature those Reykjavik accommodations that have rooms for less than 100 EUR per night for 2 people in high season.
For this selection, we start with the best-rated cheap hotels, those that offer the best quality at a lower price. Further below, you find even lower budget hotels, but often customer reviews aren’t that great.
- Loft – HI Hostel. A very popular hotel/ hostel combo. Offers accommodation ranging from a bunk bed in a shared room to big private rooms with private bathrooms. Prices vary tremendously depending on what room you book.
- Guesthouse Galtafell. Already mentioned in the selection of the most popular hotels in Reykjavik, this hotel also offers some of the best quality for those looking to stay in Reykjavik on a budget. However, only the rooms with shared bathrooms are under 100 EUR in high season. Other rooms and apartments are more expensive.
- Igdlo Guesthouse. This popular guesthouse also has budget rooms for families or groups of friends. Great value if you are traveling in a group of 3-4 people and don’t mind shared bathrooms and a 10-20 min walk to the main sights and restaurants.
- Refurinn Reykjavik Guesthouse. This is one of the best-sellers among budget hotels in the center of Reykjavik. If you don’t mind a shared bathroom, it offers excellent value at a very good location within walking distance to the main sights.
- 4th Floor Hotel. This is a very popular budget hotel in the center of Reykjavik. However, customer reviews aren’t as good as of the above-mentioned places. It also has a selection of cheap rooms with private bathrooms.
- Guesthouse Pavi. If you are looking for a budget stay in Reykjavik and also want to have a private bathroom, then this is by far the cheapest option. It’s somewhat further from the main sights, but still very walkable. Customer reviews aren’t great and most bookings are non-refundable, but if you just need a cheap place to stay in Reykjavik, it’s a very good choice.
TIP: When looking for a budget hotel in Reykjavik, keep in mind that some hotels offer free breakfast and free cancelation. Also, some of the cheaper accommodations only have shared bathrooms. In addition, it’s also worth checking what’s available within your budget for your travel dates as some more expensive hotels sometimes also offer discounts. For example, at the moment of writing, Reykjavik Downtown Hotel offers better rates in the summer than most of the budget accommodations.
Best Reykjavik Hotels with Parking
If you are renting a car for your trip in Iceland and are also planning to stay in Reykjavik for a night or two, keep in mind that it’s not easy to find a parking space in the city center. Not even to mention the parking cost.
So if you have a car, it’s better to stay outside the city or just outside the city center. Here are some of the best hotels in central Reykjavik with EASY and FREE parking*:
- Eyja Guldsmeden Hotel. This beautiful 4* hotel has some of the best ratings in Reykjavik. Located just at the outskirts of the city center, it’s still within easy walking distance to everything. AND it has convenient free parking.
- Hotel Klettur. This is an excellent value 3* hotel with complimentary parking. The location similar to the previously mentioned hotel, closet several supermarkets, and about 10-15 min walking distance from Hallgrimskirkja and other central attractions.
- Fosshótel Rauðará. Another great quality-price 3* hotel with easy free parking. Also about 10-15 minutes walk from the main central areas.
- Icelandair Hotel Reykjavik Natura. This is a great value 4* hotel just outside Reykjavik city center. It’s located near the Domestic Airport and close to the big roads. Easy to get to and there’s a big free car parking right at the front door. While not exactly next door, you can walk to the city center in about 20-25 minutes.
*Please keep in mind that parking is free of charge at the time of writing, so make sure to double-check it when you book.
Reykjavik Hotels with Best Views
Reykjavik is located by the sea and some hotels have amazing views! Here are some of the best Reykjavik hotels with the nicest views, just keep in mind that you also have to choose a room with a view!
- Tower Suites Reykjavik. This all-suites hotel is one of the most luxurious hotels in Reykjavik. The views are amazing, but so is the price!
- CenterHotel Arnarhvoll. Already mentioned as one of the most popular hotels in the city, it’s not only centrally located, offers a good price-quality ratio for a 4* hotel, but also has rooms with beautiful sea views.
- FossHotel Reykjavik. A fabulous 4* hotel with amazing sea views from some rooms and city view from most other rooms. We once stayed here and loved everything about it. The location is somewhat further away from the center, but just a few minutes on foot and totally walkable even in winter.
- Icelandair Hotel Reykjavik Marina. A beautiful 4* hotel next to the harbor. Some rooms have sea views, but it’s more harbor views actually. Nevertheless, the hotel has a nice location, is not too far from everything, and offers very good value for your money.
- Alda Hotel Reykjavík. This is a very popular and very centrally located 4* hotel that has a couple of rooms with a balcony and (far) sea view. It’s not as high as the other hotels in our selection and so sea views are just partial, behind the rooftops of other buildings.
Best Luxury Hotels in Reykjavik
There aren’t many 5* hotels in Reykjavik. In fact, there is just one. But there are some really nice luxury hotels in the city center. Take a look!
- Tower Suites Reykjavik. One of the most luxurious and most expensive hotels in Reykjavik. The views are superb too!
- Black Pearl Apartment Hotel. This 5* Reykjavik hotel offers somewhat more affordable luxury. It has beautiful self-catering apartments for various group sizes, excellent location in the city center, and is one of the highest-rated hotels in Reykjavik.
Also the following 4* hotels offer more great value for those looking for a luxury stay in Reykjavik:
Best Reykjavik Hotels for Northern Lights
If you are looking for the best Reykjavik hotels for the Northern Lights, you should know that it’s really not easy to see auroras in the city (let alone from your room) and it’s best to take a Northern Lights tour.
That being said, if aurora activity is exceptionally high and the sky is clear, you might be able to see auroras in the city despite the light pollution. In that case, it’s best to simply walk to the harbor. Your chances of seeing the Northern Lights from your hotel room window are really slim.
But if you want to have a chance to see the Northern Lights from your hotel room, then you should book a room with sea view in one of the hotels we already mentioned above.
Here are the best Reykjavik hotels for Northern Lights:
Good to know: One of the best places for watching the Northern Lights in Reykjavik is near the Grótta Island Lighthouse in the city neighborhood called Seltjarnarnes). It’s as far from the lights of the city as possible. However, you can’t easily walk there as it’s about 5 km outside of the city center and there are no hotels in that area.
Another good place to see auroras in Reykjavik is the hill where Perlan Museum is located, about 30-40 minutes walk from the city center.
READ ALSO: Northern Lights in Iceland – All Your Questions Answered
Reykjavik Accommodation for Families
Reykjavik has many hotels for all budgets, but the majority of them only offer rooms for 2 or 3 people, sometimes – 4. Luckily, there are also a few good choices in the city center for bigger families of 5-6 people or even more.
Here are some of the best centrally located hotels that offer family rooms or apartments for big families, sorted by price:
- Black Pearl Apartment Hotel. Luxury apartments for up to 6 guests.
- Reykjavik Residence Apartment Hotel. Beautiful hotel with suites and apartments for up to 6 people.
- Kvosin Downtown Hotel. Rooms and apartments for up to 5 people.
- Rey Apartments. Beautiful centrally-located apartments for up to 7 people.
- Reykjavik4You Apartments. Apartments for up to 6 people. 2 nights stay minimum.
- Hotel Ódinsvé & Ódinsvé Hotel Apartments. Mid-range budget hotel with rooms and apartments for up to 5 people.
- Hotel Orkin. Lower budget hotel with rooms for up to 5 people. A bit further away from the rest, but still walkable.
Best Reykjavik Hotels with Airport Transfer
International Keflavik airport is located about 45 minutes drive from Reykjavik. So many people are looking for a hotel with an airport transfer. However, most Reykjavik hotels don’t have their own shuttle services. They use buses and private transfers that you could easily also arrange yourself (and it will be cheaper).
All the hotels featured in our article are quite easy to reach with an airport transfer. So you can simply book any Reykjavik hotel in the city center and it’s quite simple to get there from the airport.
For more information about getting to Reykjavik from Keflavik airport (and vice versa), please check our complete guide to Reykjavik – Keflavik airport transfers. It has all the best options listed and all the information you need to know.
Where to stay near Reykjavik Domestic Airport
Reykjavik Airport is also known as a domestic airport (code RKV). This airport is located very close to the city center and is not to be confused with the international Keflavik Airport (KEF) where most visitors arrive in Iceland.
For example, flights to Akureyri in northern Iceland or to Ísafjörður in the Westfjords depart from here. Also some flights to Greenland operate from the domestic airport.
Anyhow, if you are taking a flight from the domestic airport and are looking for a hotel to stay nearby, you should know that there are no hotels that offer you easy access to the domestic airport in Reykjavik. That being said, there are a couple of options. See suggestions based on our personal experience below.
On our recent trip to Greenland, our flights departed and arrived at such hours that we needed a hotel near Reykjavik Airport twice.
Our first idea was that we should stay at the Icelandair Hotel Reykjavik Natura. We had stayed at this hotel in the past and it’s literally bordering the domestic airport. However, this hotel is about 2.5km, 30 minutes walk from the entrance of the airport. And they do not have a shuttle… With suitcases and ever-changing Icelandic weather, it’s not really an option to walk from this hotel to the airport.
When we started looking further, we realized that hotels located close to Hallgrimskirkja church in the center of Reykjavik have a better location. Not only they are just as far from the domestic airport, but they are also close to shops and restaurants. Furthermore, there are some cheaper hotels here than the Icelandair Natura hotel by the airport. In addition, there’s a city bus nr. 15 that goes to the domestic airport from this area.
So we ended up staying in the city center. Reykjavik Downtown Hotel is a good budget-friendly option in this area. In the end, we also decided to take a taxi for a 2-km ride to the airport. It cost us about 15 EUR for a 4-minute ride but saved us lots of stress.
So if you need a hotel for the domestic airport, I recommend booking something close to Hallgrimskirkja and either taking a bus or a taxi. If you don’t have much luggage and the weather is really nice, you could also walk to the airport from here.
So, this is our guide to Reykjavik hotels. I hope that it will help you find the best accommodation option for your stay!
If you are touring around Iceland and are looking for itinerary ideas and accommodation tips, please see our other guides as well:
- Where to Stay in Iceland (accommodation suggestions for all the popular areas)
- Iceland Itinerary Suggestions (for any trip, from 1 to 14 days)
- 10 Days Ring Road Itinerary (complete circle)
- 4 Days in Iceland (detailed South Coast itinerary)
- 7 Days in Iceland (detailed South & West Iceland itinerary)
- 10 Days in North & West Iceland
- Best Places to See on the South Coast of Iceland
TIP: If you are looking for additional information for your trip to Iceland, please check some of our suggested articles below. Alternatively, see our Iceland Travel Guide for even more practical information and travel inspiration for a big variety of destinations in Iceland.
Essential travel tips for Iceland:
- Iceland Travel Tips
- How Expensive is Iceland
- What to Wear in Iceland in Summer
- What to Wear in Iceland in Winter
- When to visit Iceland – Summer vs Winter
Reykjavik & surroundings:
- One Day in Reykjavik
- Is Reykjavik Worth Visiting?
- What to See in Reykjavik
- Perlan Museum in Reykjavik
- Best Half-Day Tours from Reykjavik
- Best Day Trips from Reykjavik (all seasons)
- Best Winter Tours from Reykjavik
- Reykjanes Peninsula
Reykjavik Hotels FAQ
The best place to stay in Reykjavik is the downtown area called Midborg or Reykjavik 101. It’s located between the Harpa Concert Hall and Hallgrímskirkja church. Staying here, you can easily explore Reykjavik on foot. Furthermore, there are many restaurants and shops nearby. All tours will pick you up from the town center as well.
There are many accommodations for all budgets in Reykjavik and prices also vary a lot per season. Count 150-200 USD per night for a 2-person room with breakfast in a 3-4* hotel in high season. Budget hotels are available at around 100 USD per night. Anything under that price (in high season) usually has shared bathroom facilities.
Overall, Reykjavik city center is very walkable. Most main sights and tourist attractions are located within 10-20 minutes walk from each other. Reykjavik is also safe to walk around at night on your own. If traveling in winter, however, keep in mind that it’s cold, dark, and streets and pavements are often slippery.
Reykjavik can be a good base for a short trip to Iceland and there are many nice places that you can visit nearby or as a day trip from the city. However, you cannot see everything just by taking day trips from Reykjavik. So if you want to explore more of Iceland, you’ll need to plan a road trip or book a multi-day tour.
There are just a few hotels that have nice views. CenterHotel Arnarhvoll, Tower Suites Reykjavik, FossHotel Reykjavik, and Icelandair Hotel Reykjavik Marina have rooms with nice sea views.
READ ALSO: Best Places to Visit in Iceland
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