Where to stay in Reykjavik and on a self-drive road trip in Iceland

Where to Stay in Reykjavik and on a Self-Drive Iceland Road Trip

In Europe, Hotel reviews, Iceland by Jurga18 CommentsTHIS POST CONTAINS AFFILIATE LINKS

So you bought a cheap ticket to Iceland for next month, worked out the best trip itinerary and start planning your road trip… It won’t take you too long to realise that you are not the only one – most hotels in Iceland are fully booked months in advance, and the ones that are available are either too expensive, not well located, or really basic…

Cheap flights and free stop-overs between Europe and the US have turned Iceland into an extremely popular travel destination. The number of tourists has increased dramatically in the last few years, at a rate of more than 20% per year for several years in a row. It seems, however, that the infrastructure isn’t able to follow at the same rate and it’s therefore not easy to find good price – quality accommodation in Iceland, especially during the most popular months.

When traveling to remote destinations, I always advise people to book accommodation well in advance. Iceland is no exception. While Reykjavík is growing fast and there are lots of new hotels and other accommodation options available, the rest of the country is still very thinly populated and good price/quality accommodation is scarce.

The best way to visit Iceland is on a self-drive road trip. While it is possible to drive to some of the best-known landmarks from Reykjavik or from one of the towns of Southern Iceland, you will probably be driving at least 150-250km one-way every day and spending more time in the car than sightseeing. If you have more than 2 days in Iceland, don’t limit your stay to Reykjavik only.

You can read more advice in my post about Reykjavik and the things travel guides don’t tell you about it.

If you are looking for itinerary ideas, this is our suggested trip itinerary for Iceland in winter. It could be easily adapted for a summer trip and, since the days are longer in summer, you could do the same trip in less time and/or add more hiking and sightseeing.

Best places to stay in Iceland – OVERVIEW

Where to stay in Reykjavik: best price – quality accommodation from budget to luxury

Here is the criteria I used to select the best price – quality mid-range and luxury Reykjavik accommodation:

  • Central location
  • Review score of 8,5+
  • Best price – quality ratio
  • Free Wi-Fi
  • Breakfast included
  • Parking available
  • Airport Shuttle

Best price – quality LUXURY hotels in Reykjavik:

Click on the link for more information!

Best price – quality MID-RANGE hotels in Reykjavik:

Best BUDGET hotels and apartments in Reykjavik:

I used the following criteria to select quality cheap accommodation in Reykjavik:

  • Central location
  • Review score of 8+
  • Best price – quality ratio
  • Free Wi-Fi
  • Private bathroom
  • Parking available

Best cheap HOSTELS in Reykjavik:

I used the following criteria to select the best hostels in Reykjavik:

  • Central location
  • Review score of 8,5+
  • Free Wi-Fi

These Reykjavik hostels have excellent reviews:

Best Reykjavik hotels and apartments for big families

When traveling with three children, we know what a challenge it can be to find good affordable accommodation for 5 or more people. Often, we are offered two rooms and that increases family travel cost immensely. That’s why we always use Booking.com to search for best accommodation options for our family. Usually we stay at nice spacious apartments (at the hotels or privately owned) at a fraction of the cost of two separate hotel rooms. While it’s not always possible to find such accommodation in rural Iceland, it’s definitely possible in Reykjavik – see below.

I used the following criteria to select the best Reykjavik accommodation for big families :

  • Family rooms for 5 – 6 people available
  • Central location
  • Best price – quality ratio
  • Review score of 8+ for budget, 8,5+ for mid-range and 9+ for luxury apartments
  • Free Wi-Fi
  • Parking available* (unless specified otherwise)
  • Airport Shuttle* (unless specified otherwise)

Best price – quality LUXURY accommodation in Reykjavik for FAMILIES:

MID-RANGE accommodation in Reykjavik for FAMILIES:

BUDGET accommodation in Reykjavik for FAMILIES:

Iceland ring road self-drive road trip: where to stay

To help you plan your trip to Iceland, I made a selection of some of the best Iceland accommodation options for a road trip around the whole island, following the Ring Road.

Keep in mind, that it might be difficult to find one type of accommodation for the whole trip. I mean, if you are looking for luxury hotels only, it might be difficult or even impossible to find one in the area that is best for sightseeing. And it’s also true for budget-conscious travellers – sometimes you might have to pay more as there is really no alternative in the area.

Where to stay when visiting Iceland’s Golden Circle

First of all, let me tell you that you can easily explore the Golden Circle as a day trip from Reykjavik. If, however, the Golden Triangle is just a part of your road trip, it might be better to continue your journey further Southwards rather than to drive back to Reykjavik.

Probably the best affordable places to stay for exploring Thingvellir, Gullfoss and Geysir are the little towns of Hveragerði and Selfoss.

Both towns have several accommodation options in different price categories, usually much cheaper than Reykjavik. What is also important, is that there are several dining options in the neighbourhood. This can save you a lot of money as dining in the hotels in the rural areas in Iceland can be very expensive.

If you are looking for more luxury and/or consider staying at one more central location and explore the Southern coast from there, Hotel Ranga can be a good option for 2-3 nights stay.

Hotels near Vik or Kirkjubæjarklaustur

During our last trip to Iceland in winter, we spent two nights at Hotel Laki. It’s an excellent choice in the area, but a bit on the expensive side.

Some other great suggestions in the area of Vik and Kirkjubæjarklaustur:

Where to stay for Jokulsarlon Glacier Lagoon and Skaftafell National Park

Accommodation options in these areas are really limited, so you should book well in advance or be prepared to drive a bit further. It’s not really a problem to drive 40-50 miles to a nearest hotel in Iceland, but it might be nice to stay closer to Skaftafell and Jokulsarlon, especially if you want to spend more time and explore the area more. There are lots of hiking trails in Skaftafell, you can go glacier hiking, visit several glacier lagoons and the surrounding coast, etc.

Best-located hotels in the Jokulsarlon and Skaftatell area are:

If these hotels are full, the best option is probably to stay close to Höfn area, especially if you continue your trip further around the island.

If your trip stops at Jokulsarlon, however, a better option for you would be to stay longer in the area around Kirkjubæjarklaustur (see above) and commute from there. That way at least you don’t have to pack your bags every day.

Best place to stay on the East coast of Iceland – Egilsstadir

Egilsstadir is a small town on the Eastern part of Iceland and is probably the best place to stay when visiting Eastern Iceland.

Hotels in Akureyri and Myvatn area

Akureyri is the biggest town in the Northern part of Iceland, but the area around Myvatn is the one that is worth exploring the most. The distances are not very big, so it’s up to you where you decide to stay. In town you have more facilities and more accommodation options, but it’s a small town and I think you’ll enjoy your stay more if you opt for the Myvatn area or a combination of both.

Best Myvatn accomodation

Best Akureyri hotels and apartments

Best places to stay in Northern Iceland

Northern Iceland is very thinly populated and there aren’t many accommodation option available. One of the best areas to stay at when exploring Northern part of the island are the ones close to Skagafjördur.

Why book your Iceland accommodation with Booking.com?

Booking.com is one of the world leaders in booking accommodation online and it’s definitely the most used accommodation search- and booking website in Europe, including Iceland.

You can find all kinds of accommodation at Booking.com – not just hotels, but also private properties. In addition, Booking.com has the best price guarantee and free cancelation on most accommodations.

And yes, these are affiliate links, but I wouldn’t recommend anything we don’t use ourselves. In fact, we use Booking.com for practically all our hotel bookings. Not just because it has so many properties worldwide and excellent prices, but also because it’s so easy to use for everyone – from solo business travellers to big families like ours.

If you book your accommodation using the links in this post, I earn a small commission at no extra cost to you. While small, it helps to cover some expenses for running this blog and makes it possible for me to keep bringing you interesting, relevant and informative content. Thank you!


If you enjoyed reading this post, please share it. Are you on Pinterest? Pin this image. We also have lots of other tips for traveling in Iceland – check it out!

Best places to stay on a road trip in Iceland and best price - quality hotels in Reykjavik

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Where to Stay in Reykjavik and on a Self-Drive Iceland Road Trip was last modified: March 12th, 2018 by Jurga

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  1. Hello! This is a great breakdown of planning a trip to Iceland. This helped me a lot in trying to find a starting point for planning a trip for me and my fiancé. We are planning to go at the end of March 2018 and I am trying to figure out if the days will be long or short since we are going at the end the winter. Also do you have any recommendations on car rentals and the type of car to rent. We don’t plan on doing any off road driving but we want to visit the different sites you mentioned in your intinerary. Any recommendations would be greatly appreciated.

    1. Author

      Hi Niki, the days are quite long in March. From what I see, you have 11-13 hrs of daylight in that period (you can check here for more details).
      As for the cars, I usually use this website to check for the best deals – they compare different companies so you can pick the one that is right for you. In general, the more in advance you book, the better the price you get. I would suggest to rent an SUV or even a 4WD in winter. I just checked and the price difference isn’t even that big between an SUV or SUV 4WD. In principle you can do the South Coast in Iceland with any regular car, but once again – because it’s winter, you’ll be safer in a bigger and most importantly higher car. It all depends on the weather of course.
      Hope this helps.

      1. Thank You this was great information for my future trip to Iceland will let you know how it goes.

  2. Your blog has definitely been the most useful for planning our trip to Iceland. My husband and I will be there for 10 days in late July. We’ve rented a car and will be going around the ring road starting in Reykjavik and ending in Reykjavik. We have already chosen all the hotels/guesthouses and have fully paid for some of the rooms but the other rooms are just “booked” (guaranteed, supposedly) and we’ll be paying for them when we get there. My question is…would you recommend paying for all the rooms before getting to Iceland or does “booking” a hotel/guesthouse room in Iceland work well for the most part? In other words, can we trust that our “booked” room will still be available we get there? Thank you again for all the great information!!

    1. Author

      Thank you, Gail. Appreciate your kind words. As for hotel rooms. In general, you can always trust that a booked room will be held for you, even if it’s not paid. Some hotels ask you to warn them in advance in case of late arrival though. Don’t know how you booked your hotels, we almost always use Booking.com and there they usually tell you if hotel needs any special confirmation. Sometimes we also prepay our stays, sometimes not, but we never ever had a problem that a booked/unpaid room wouldn’t be available. So I wouldn’t worry about that. Enjoy your trip!

  3. Hi. Love your site. Super helpful. Looking to travel to Iceland in October as I’m hoping to see the Northern Lights. Since that is not predictable we are going to use your itinerary to see the rest of the sites. The question, would you recommend your itinerary if we are travelling with a 3 1/2 year old? We’ve traveled with our son all over, but we haven’t really done hiking or other very nature based trips. I’m just wondering whether it’s feasible following your itinerary with a toddler in terms of seeing the sites. I’m not worried about the long car rides, but more so the hiking and such. Thoughts?

    1. Author

      Thank you, Tiffany. Appreciate your feedback.
      As for trip itinerary, do you mean the 7 day Iceland itinerary for winter? Yes, it’s perfectly doable with kids. There is not that much hiking involved at all. Please also read this comment that I have answered to somebody who is traveling to Iceland with older people, I think it will answer your questions.
      You will not be able to do glacier hiking with such a young child. Also, at Skaftafell NP try to look for a shorter walk. The most popular hike there goes to Svartifoss waterfall. It’s not a very long hike, but it’s a bit steep (but the path is very wide for the biggest part). If the weather is good and you are traveling with just one child, I think you could try this walk. In the worse case you’ll have to carry your son a bit.. That’s pretty much the only hiking there is in that itinerary…
      Hope this helps

  4. Hi, I am planning to go in July for 5-6 days. Is it possible to stay in between golden circle and vik and commute from there to golden circle, vik area, jokulsarlon lagoon, west fjords, reykjavik. I am planning to see little bit of west and more of south including reykjavik

    1. Author

      Hi Ruchika, it’s definitely possible, especially in summer as the days are long so you can easily drive to all those places from one location. But you will be spending a lot of time driving. Definitely if you also plan to go West. On the other hand it saves time packing etc.
      Not sure if you also saw this post – Iceland 7 day itinerary -, it has more info about the hotels we stayed at and our detailed winter itinerary (can easily be done in summer too). Please also check the comment section of that post as some readers already asked similar questions and you’ll find my answers there.
      My preference would still go to at least two hotels on the South Coast, one half way between Selfoss and Vik (e.g. hotel Ranga), and one in Kirkjubæjarklaustur area (e.g. hotel Laki). I know a family with three kids who stayed the whole week at Hotel Ranga and did the whole South Coast from there, they said it was doable. If you also plan to do West Fjords and Reykjavik, I would consider spending a night closer to that area, I think it will be more relaxing and you’ll have more time to explore rather than drive.
      Hope this helps.

  5. Your blog is such a great resource! we are going to Iceland May 7-12 this year on our way to Europe–we arrive at 6:30am on monday 5/08 and fly out 7:30am on friday 5/12. I’m trying to figure out an itinerary to see the Golden Circle and the Jokulsarlon glacial lagoon, as well as 3/4 of a day in Reykjavik. While I think I see the need to stay in Reykjavik our last night before flying out–although maybe not??–and we’d like to see the city, I realize we don’t need an entire day for it and we’d be better off not basing ourselves there. But I can’t figure out the right order of seeing things or where we might want to stay–especially given that we arrive early in the morning and fly out early in the morning! Help! Do you have any suggestions? Should we pick a central location on the south coast and base ourselves there for three nights? Or move around? Any/all suggestions helpful for how to organize our trip!

    1. Author

      Hi Laurie, I’ll try to help, but you can also take a look at my Iceland winter itinerary post for ideas. All the places I mention here can be found in that post. In May the days will be long, so you can do a lot in one day. Here is my suggestion for you, but you should adapt it based on your interests and energy levels :).
      1. The day of arrival try to see the Golden Circle and then sleep somewhere further down the Southern Coast. Try either Hveragerdi area or even further down the road in the direction of Vik. Golden Circle is a day trip, but as I said, the days will be long, so you could definitely drive a bit further that day. On the other hand, you might be tired after the trip, so maybe it’s better not to do too much on the first day. If you stay close to Hveragerdi, go for a swim in their geothermal pool (much cheaper and less busy than the Blue Lagoon).
      2. Skogafoss and Seljalandsfoss waterfalls, maybe glacier hiking if that’s your thing. Also Skogar museum with turf houses and Vik beach. Maybe stay somewhere close to Kirkjubaejarklauster area (we stayed at Hotel Laki), so that you can visit the Fjardrargljufur Canyon either in the evening or in the morning the next day.
      3. Skaftafell (hiking) and Jokulsarlon glacier lagoon. If you have time left, can make a short stop at Svinafellsjokull and/or Fjallsarlon glacier lagoon. If you do a lot of hiking and plan on making this a long day, you could stay close to Jokulsarlon (there’s a beautiful new hotel there – Fosshotel Glacier Lagoon) or return to the place you spent the previous night at (which is nice if you don’t like to change hotels every night). Or go to Jokulsarlon first thing in the morning and then work your way back to Skaftafell – depending on where you stay.
      4. Head back towards Reykjavik and explore the city. Try to visit one of the places you might have skipped before, because it will be a long drive, so you’ll need to stop and stretch your legs anyway. In the evening you can stay in the city centre (if you like restaurants and night life) or close to the Blue Lagoon (which is also closer to the airport) – e.g. Northern Light Inn is a good option if you still want to try to visit the Blue Lagoon in the evening (check their opening times).
      This might be a bit ambitious, but gives you an idea of what you can probably do. Hope this helps.

  6. This is such a great resource. Saved me so much time when looking for hotels for our road trip in October. Thank you

    1. Author

      Thank you so much for taking the time to comment, Elvira. It’s always nice to hear from readers and glad to help!

  7. Oh wow! this just so super comprehensive! (which is more than welcome). Personally i hate it when i click on a pin promising useful information and then there’s a paltry list of 3 items and a nice image.

    I am currently planning a trip with a few friends to Iceland and we really can’t decide which hotel(s)/appartments to pick. I am already decided but my friends are budgeting a bit to much for my taste lol.

    anyways. thx for the guide!

  8. Ok. This is kind of crazy. I am planning on Iceland soon (just the planning phases) and this is 100% a guide that I needed! It isn’t often that I can say that – so thank you :).

    Also, I did not realize things booked so quickly. I will need to make sure I am really paying attention to the market.

    1. Author

      If you are traveling on your own or as a couple and are flexible, you’ll always find accommodation. It might not always be at the best location or the cheapest deal though – so yes, I would still advise not to wait too long!
      Thanks for stopping by, Kati! You can find a lot more information about Iceland for your trip on our blog, like when to go to Iceland – summer vs. winter, what to wear in Iceland in summer or what to pack for Iceland in winter – check it out!

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