Where to Stay in Reykjavík: Hotels and Hostels Guide

Reykjavík’s accommodation ranges from basic dorms to genuine luxury — all compressed into a small city where almost everything is within a 20-minute walk of Hallgrímskirkja. The majority of options cluster in the 101 postcode (central Reykjavík), with a secondary cluster in the Grandi harbour area. Prices peak sharply in July and August — book at least 2–3 months ahead for peak summer.

Budget (Under ISK 25,000)

Kex Hostel — The best-known hostel in Iceland. Housed in a former biscuit factory on Skúlagata near the harbour. A good bar, a large communal kitchen, and a strong social atmosphere. Dorms from approximately ISK 7,000, private rooms from ISK 18,000. Location is slightly north of the main 101 centre but walking distance to everything.

Hlemmur Apartments — Self-catering studios near the Hlemmur bus terminal and food hall. Good for those who want kitchen facilities. Studios from approximately ISK 18,000–24,000.

Galaxy Pod Hostel — Pod-style sleeping berths near Laugavegur. A step above standard dorms for privacy. Pods from approximately ISK 7,500.

Mid-Range (ISK 28,000–55,000)

Hotel Borg — An art deco hotel on Austurvöllur square, opened 1930. One of Reykjavík’s most iconic buildings and still the address of choice for those who want a central, classic hotel. Doubles from approximately ISK 32,000–50,000.

Centerhotel Skjaldbreið — Reliable mid-range hotel on Laugavegur, right in the centre of the shopping and restaurant district. Doubles from approximately ISK 29,000–42,000.

Apotek Hotel — Occupies a former pharmacy (1917) on Austurstræti. Good rooms and a design aesthetic that references the building’s history. Doubles from approximately ISK 34,000–48,000.

Canopy by Hilton — In the Grandi harbour area. One of the newer upscale mid-range options. Doubles from approximately ISK 35,000–52,000. Good restaurant on site.

Luxury (ISK 65,000+)

Hotel Holt — Iceland’s premier art hotel, on Bergstaðastræti in the 101 district. The building contains Iceland’s largest private art collection. Doubles from approximately ISK 65,000–95,000.

The Retreat at Blue Lagoon — Not in Reykjavík itself (47km away near Keflavík) but the most extravagant accommodation option in Iceland. Rooms built into the lava field with direct access to the Blue Lagoon. From approximately ISK 120,000+ per night.

Ion Adventure Hotel — 45 minutes east of Reykjavík in Nesjavellir, designed specifically for Northern Lights viewing with large glass walls and an outdoor Northern Lights bar. From approximately ISK 75,000.

What to Know Before Booking

• Self-catering: Reykjavík is expensive to eat out in daily. Hotels with kitchenettes or hostels with communal kitchens save significantly — the Bonus and Krónan supermarkets near Hlemmur are well-stocked.
• Parking: If you have a rental car, check whether your hotel has parking. Street parking in central 101 is metered and limited.
• Noise: Laugavegur has active nightlife on weekends — rooms facing the street can be loud after midnight.