Where to Stay in Reykjavik: Best Area & Hotels for First-Time Visitors (+Map)

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Planning a trip to Iceland and wondering where to stay in Reykjavik? In this guide, we share the best area to stay in Reykjavik for first-time visitors, along with our hand-picked hotel recommendations for all budgets.

Based on our multiple trips to Iceland, we explain where to stay in Reykjavik for sightseeing, restaurants, tours and day trips, or as part of a longer Iceland road trip. From central hotels in downtown Reykjavik to quieter places with easier parking, this guide will help you find the best place to stay close to everything.

To make planning easier, we included a map and our favorite Reykjavik hotels in the most convenient area of the city. Below, you can find a quick overview of our top picks, followed by a more detailed guide and hotel recommendations.

Best Hotels in Reykjavik for First-Time Visitors

Reykjavik is compact and very walkable, but choosing where to stay can still feel overwhelming, especially on a first trip to Iceland. The biggest difference usually comes down to location, parking, and budget.

If you don’t have time to read the entire guide, here are my personal favorite Reykjavik hotels in the best area to stay for first-time visitors.

Simply click on the hotel name for more details, availability, and rates:

Best value: Center Hotels Plaza. One of the best price/quality hotels in downtown Reykjavik, with an unbeatable location near restaurants, shopping streets, and the main attractions in the city center. Very popular.

Best luxury hotel: Tower Suites Reykjavik. Spacious modern suites with floor-to-ceiling windows and incredible city and ocean views. Worth the splurge!

Best for families: Reykjavik Residence Apartment Hotel. Spacious studios and big apartments for up to 4-6 people in an excellent central location.

Best hotel with parking: Hotel Eyja. One of the best options if you are renting a car and still want to stay within walking distance of central Reykjavik.

Best budget stay: Refurinn Reykjavik Guesthouse or Student Hostel.

     

Best Area to Stay in Reykjavik + Map

Miðborg (Midborg), aka Reykjavik 101, is the downtown neighborhood of Reykjavik where you’ll find most shops, cafes, restaurants, bars, and tourist sights. It’s the heart of the city and by far the best place to stay in Reykjavik. However, Midborg is a big area, and some places are further away from the main tourist areas.

The very best area to stay in Reykjavik is in the center of town, north of Hallgrimskirkja, the main church of Reykjavik. We indicated this area in red on our map of central Reykjavik (see above).

This part of the city is centrally located for sightseeing, and you can easily explore the main sights of Reykjavik on foot. All guided tours will pick you up from here, and it’s quite easy to reach with an airport transfer from Reykjavik International Airport. Reykjavik’s domestic airport is also located nearby.

Below, you can find our detailed guide with the best hotels in the Reykjavik city center.

Best Located Hotels in Reykjavik

If location is your top priority, staying in downtown Reykjavik is by far the best choice for first-time visitors. The hotels below are all within easy walking distance of the main attractions, restaurants, shopping streets, tour pickup points, and the Old Harbor area.

We included a few well-located Reykjavik hotels for different budgets and travel styles. All these hotels have a great location for sightseeing in the city as well as for day trips and excursions from Reykjavik.

• Reykjavik Residence Apartment Hotel. This 4* hotel offers studios, suites, and apartments for different group sizes. With hotel services and kitchen facilities, it’s a great choice for longer stays and families who want more space and flexibility. The location is quiet yet very central, within walking distance of the main attractions, restaurants, and shopping streets.

• Hotel Von. A stylish modern 4* hotel in the heart of downtown Reykjavik, within walking distance of the main attractions, restaurants, shopping streets, and tour pickup points. Rooms are relatively compact, but the location and price-quality ratio are excellent for a first stay in Reykjavik.

• Hotel Frón. One of the best-value hotels in downtown Reykjavik, located right on Laugavegur shopping street. In addition to standard hotel rooms, it also offers studios and apartments with kitchenettes, making it a good option if you want more space or are staying in Reykjavik for several days.

• 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 a lot depending on which room you choose.

READ ALSO: Reykjavik 1-Day Itinerary

TIP: Using the map below, you can easily compare hotels, apartments, and short-term rentals in Reykjavik city center. Simply insert your travel dates and group size, and you’ll see the best deals.

 

Most Popular Hotels in Reykjavik City Center

The hotels below are among the most booked and best-reviewed places to stay in central Reykjavik. All of them are within walking distance of the main attractions, restaurants, shopping streets, and tour pickup points.

We included a few of the most popular Reykjavik hotels for different budgets and travel styles.

• Center Hotels Plaza. One of the most popular in downtown Reykjavik, with an unbeatable location near Ingólfstorg Square, restaurants, shops, and airport bus stops.

• Grandi by Center Hotels. A very popular modern 4*hotel near the Old Harbor, about 10-15 minutes walk from the main shopping streets and restaurants in downtown Reykjavik. The hotel also has an excellent spa area with hot tubs and a sauna. Great value.

• Reykjavik Marina Hotel. Another popular 4* hotel near Reykjavik’s Old Harbor, with colorful Icelandic-inspired interiors and a lively atmosphere. The location is excellent for restaurants, whale-watching tours, and harbor excursions, while downtown Reykjavik is still just a short walk away.

• Reykjavik Residence Apartment Hotel. Already highlighted for its central location, this is also one of the most popular apartment-style hotels in Reykjavik, offering studios and larger apartments with kitchen facilities. It’s one of the best Reykjavik hotels for families, longer stays, or anyone who wants more space and flexibility.

READ ALSO: Best Things to Do in Reykjavik

Best Budget Hotels in Central Reykjavik

Accommodation in Reykjavik is not cheap, especially if you want to stay in the most central area. Still, choosing a well-located hotel can save you money and time on transportation, so it’s often worth paying a bit more.

Below, you can find our selection of the best budget hotels in Reykjavik. Remember that Iceland is generally quite expensive, so “budget” here is relative.

• Student Hostel. One of the best-rated budget accommodations in central Reykjavik. This modern hostel offers simple private rooms and shared facilities in a convenient location close to the city center.

• CityHub Reykjavik. A modern budget-friendly option with compact pod-style rooms and stylish shared spaces. Popular with younger travelers looking for a central location and lower prices without staying in a traditional hostel dorm.

• Refurinn Reykjavik Guesthouse. One of the most popular budget guesthouses in Reykjavik. It offers excellent value in a very good location near the Old Harbor and within walking distance of the main sights. Parking might be possible too.

• Igdlo Guesthouse. A popular budget guesthouse with rooms for families and small groups. Good value if you are traveling with 3-4 people and don’t mind shared bathrooms and a 10-20 minute walk to the main sights and restaurants.

TIP: When choosing a budget hotel in Reykjavik, keep in mind that some accommodations include breakfast and free cancellation, while others don’t. Also note that many lower-budget guesthouses only offer shared bathrooms. It’s also worth checking all offers for your exact travel dates, since some higher-end hotels occasionally offer very good deals, especially outside the peak summer season.

READ ALSO: Iceland Travel Tips

Best Reykjavik Hotels with Parking

If you are renting a car in Iceland and plan to stay in Reykjavik for a night or two, keep in mind that parking in the city center can be limited and expensive.

For that reason, it’s often easier to stay just outside the busiest downtown area, where some hotels offer more convenient parking while still being within walking distance of the main sights and restaurants.

That said, parking conditions and fees can change, so always double-check the latest information and reviews before booking. Some hotels offer free private parking, others charge extra, and in some cases, “parking available” simply means four spots that are always full or public street parking nearby. Also note that certain hotels have limited spaces and require advance reservations.

Below are some of the best Reykjavik hotels with private parking:

• Eyja Hotel. One of the best-rated hotels in Reykjavik with parking. Located just outside the busiest downtown area, it’s still within walking distance of the main attractions, restaurants, and shopping streets in about 10-15 minutes. The hotel offers convenient on-site parking.

• Hotel Holt – The Art Hotel. An upscale boutique hotel in a quieter part of central Reykjavik. The hotel offers private parking, and although it’s not guaranteed, most guests mention that parking is usually easy.

• Hotel Klettur. A good-value 3* hotel with private parking and a convenient location. Hallgrímskirkja and the main downtown area are about 10-15 minutes away on foot. A practical choice if you want guaranteed parking (has to be reserved).

• Reykjavik Natura Hotel. A good-value 4* hotel near Reykjavik Domestic Airport and close to the main roads leading in and out of the city. One of its biggest advantages is the large free parking lot right outside the hotel, making it especially convenient for Iceland road trips. While not in the city center, you can still walk downtown in about 20-25 minutes, or take a bus. This is also one of the few hotels in Reykjavik with EV charging stations.

READ ALSO: Iceland Ring Road Itinerary

Reykjavik Hotels with Best Views

Thanks to its waterfront location, some Reykjavik hotels offer beautiful views of the ocean, the harbor, or the city skyline. For the best experience, be sure to look for a room with a sea or city view, since not all room categories face the water.

• The Reykjavik EDITION. One of the most luxurious and best-located hotels in Reykjavik, right by the water. Many rooms and suites offer beautiful ocean and harbor views, and the rooftop bar is one of the best places in the city for a drink with a view.

• Tower Suites Reykjavik. A luxury all-suite hotel occupying the upper floors of one of Reykjavik’s tallest buildings. Floor-to-ceiling windows offer incredible panoramic views over the city, the ocean, and the surrounding mountains. One of the best hotels in Reykjavik for views, but also one of the most expensive.

• CenterHotel Arnarhvoll. A very popular 4* hotel near the waterfront, within easy walking distance of Harpa Concert Hall and the city center. Some rooms have beautiful sea views, and the top-floor restaurant and bar also overlook the bay.

• FossHotel Reykjavik. A modern 4* hotel with excellent views from the higher floors. Some rooms overlook the ocean, while others offer wide city views. Located just outside the busiest downtown area, but still within easy walking distance of the main attractions. We once stayed here and loved it.

• Reykjavik Marina Hotel. A stylish 4* hotel by the harbor, with some rooms overlooking the marina and the sea. The location is excellent for harbor tours, restaurants, and whale-watching excursions, while downtown Reykjavik is still just a short walk away.

Best Luxury Hotels in Reykjavik

Luxury hotels in Reykjavik are generally smaller and more understated than in many other European capitals, but there are some excellent high-end stays in the city center.

Below are our top picks for luxury accommodation in Reykjavik:

• The Reykjavik EDITION. One of the most luxurious and best-located hotels in Reykjavik, right by the Old Harbor. This stylish 5* hotel features elegant modern rooms, an excellent spa, several restaurants and bars, and beautiful harbor views. If budget isn’t a major concern, this is one of the very best places to stay in Reykjavik.

• Black Pearl Apartment Hotel. A 5* luxury apartment hotel in the heart of downtown Reykjavik, offering spacious suites and apartments with high-end finishes and full kitchen facilities. It’s one of the best luxury hotels in Reykjavik for families or anyone who wants more space without sacrificing comfort or location.

• Tower Suites Reykjavik. An exclusive all-suite hotel with floor-to-ceiling windows and incredible panoramic views over the city and the ocean. One of the most luxurious 4* hotels in Reykjavik.

Best Reykjavik Hotels for Northern Lights

If you are looking for the best Reykjavik hotels for the Northern Lights, keep in mind that Reykjavik is not the ideal place for aurora viewing because of city lights. In most cases, your best chance to see the Northern Lights is by taking a guided aurora tour outside the city.

That said, during periods of strong aurora activity and clear skies, it is sometimes possible to see the Northern Lights in Reykjavik too. 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.

That said, if you want to have a chance to see auroras from your room, hotels with sea-facing rooms are your best bet. Here are the best Reykjavik hotels for Northern Lights (book a room with a sea view!):

• The Reykjavik EDITION.
• Tower Suites Reykjavik.
• CenterHotel Arnarhvoll.
• FossHotel Reykjavik.
• Reykjavik Marina Hotel.

Good to know: One of the best places to see the Northern Lights in Reykjavik is near Grótta Lighthouse in Seltjarnarnes, west of the city center. Another good spot is the area around Perlan Museum, which is darker and slightly elevated compared to downtown Reykjavik.

READ ALSO: Northern Lights in Iceland – All Your Questions Answered

Reykjavik Accommodation for Families

Most hotels in Reykjavik only offer standard rooms for 2-3 people, sometimes 4. So if you are traveling with a bigger family or a group of friends, finding a centrally located place with enough space can be more challenging.

Luckily, there are several very good apartment-style hotels in Reykjavik that offer larger suites and family apartments for 5-8 people, often with kitchen facilities and more living space.

Here are some of the best family-friendly accommodations in central Reykjavik, sorted roughly by price from high to low:

• Black Pearl Apartment Hotel. Luxury apartments for up to 6 guests.

• Reykjavik Residence Apartment Hotel. Beautiful central hotel with suites and apartments for up to 6 people.

• Vintage Apartment Hotel. Highly-rated studios and apartments for up to 5 people. Great value in a super central location.

• Rey Apartments and Reykjavik4You Apartments. Modern centrally located apartments for families and groups of up to 6-8 people. The latter often requires at least a 3-night stay.

• Ódinsvé Hotel Apartments. Good-value hotel-apartment combination with options for up to 5 guests.

Best Reykjavik Hotels with Airport Shuttle

If you are looking for a hotel in Reykjavik with airport transfer, it’s good to know that most hotels do not have their own shuttle service to Keflavik Airport. Even if they say they do, they typically rely on the same airport buses and private transfers that you can easily book independently, usually for a much lower price than via the hotel.

The good news is that all centrally located Reykjavik hotels are relatively easy to reach from the airport, so you can simply choose the hotel that suits your budget and travel style best.

One thing to keep in mind is that large buses are not allowed to drive into some parts of the old town. Depending on your hotel location, you may need to walk a few minutes from the nearest bus stop with your luggage. If you prefer door-to-door service, consider booking a private transfer instead — they usually drop you off and pick you up as close to your hotel as possible.

For more information about getting between Keflavik Airport and Reykjavik, see our detailed guide below. It covers all the different transfer options, prices, travel times, and practical tips.

LEARN MORE: Reykjavik – Keflavik Airport Transfers

Where to stay near Reykjavik Domestic Airport

Reykjavik Airport (RKV), also known as the domestic airport, is located very close to the city center. It should not be confused with Keflavik International Airport (KEF), where most travelers arrive in Iceland.

If you have an early domestic flight and are looking for a hotel nearby, it’s good to know that there are no hotels directly connected to Reykjavik Domestic Airport. Even Reykjavik Natura Hotel, which is located right next to the airport area, is still about 2.5 km (1.5 miles) from the terminal entrance and does not offer a shuttle service.

On our trip to Greenland, we needed a hotel near Reykjavik Domestic Airport twice and chose to stay at Hotel Leifur Eiriksson, close to Hallgrímskirkja Church instead. This area is very central, within walking distance of restaurants and the main sights, and is also conveniently connected to the airport by city bus #15. If you travel light and the weather is nice, you could even walk to the airport from here. Otherwise, it’s just a very short taxi or bus ride.

READ ALSO: How Expensive is Iceland

So, this is our guide to the best hotels and areas to stay in Reykjavik. I hope it helps you find the right accommodation for your trip to Iceland!

TIP: For more information and travel inspiration, take a look at our other Reykjavik and Iceland articles below. You can also check our Iceland Travel Guide for practical tips, itinerary ideas, and destination guides all around the country.

Reykjavik Travel Guides:

• 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
• Best Places to See on the South Coast of Iceland

Reykjavik Hotels FAQ

READ ALSO: Best Places to Visit in Iceland

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