The Reykjanes peninsula is Iceland’s most geologically active piece of ground - a peninsula sitting directly on the Mid-Atlantic Ridge where the Eurasian and North American tectonic plates are actively pulling apart. Keflavík International Airport, the Blue Lagoon, and a chain of volcanic fissures, geothermal fields, and sea cliffs all share this 70km-long finger of land stretching southwest from Reykjavík.
For most international visitors, the Reykjanes peninsula is the first place they see in Iceland - and often the last. The question of where to stay here divides neatly into three scenarios: airport proximity (arriving late or departing early), Blue Lagoon access (staying adjacent to Iceland’s most-visited attraction), and peninsula exploration (treating the volcanic landscapes and seabird colonies as a destination in their own right).
Accommodation Near Keflavík Airport
Keflavík town (officially Reykjanesbær after municipal mergers) is a modest town of around 18,000 people, home to the airport and a working harbour. It is functional rather than charming, but it has the full range of practical facilities.
Icelandair Hotel Keflavík sits 3km from the airport terminal with a complimentary shuttle service for guests. Rooms run approximately ISK 30,000–48,000 in summer. The hotel is newly refurbished and the shuttle reliability is good - for early morning international departures this is one of the most stress-free options in Iceland.
Hotel Berg in central Keflavík has rooms from approximately ISK 26,000–38,000 and offers a paid airport transfer service. The town-centre location means you have walking access to the harbour and restaurants in Keflavík rather than being stranded near the terminal.
A mid-range chain property in Keflavík provides reliability with doubles from approximately ISK 24,000–35,000. The airport shuttle is available but must be arranged at booking.
Guesthouses in Keflavík and Njarðvík offer private rooms from approximately ISK 18,000–25,000. These are smaller family-run properties without shuttle services - you need a taxi from the airport (approximately ISK 2,500–3,500 to Keflavík centre).
Accommodation at the Blue Lagoon
If you’re not staying at the resort, Blue Lagoon tours and entry tickets can be booked through GetYourGuide with real-time availability.
Silica Hotel is the premium option within the Blue Lagoon resort complex, aimed at guests who want private lagoon access and a spa-focused stay. Rooms start from approximately ISK 80,000–120,000 per night in peak summer and include Blue Lagoon entry and a private in-room lava bath. The experience is genuinely distinctive - the setting in a lava field with steam rising around the buildings is unlike anything else in Iceland.
The Retreat at Blue Lagoon Iceland is the luxury flagship, with suites from approximately ISK 150,000+ per night, including spa access, in-room facilities, and the most exclusive level of service on the peninsula. For a special occasion trip, there is nothing else in Iceland quite like it.
Both properties require advance booking months ahead during the June–August peak.
Accommodation in Grindavík
Grindavík is the main fishing town on the southern Reykjanes coast, 10km from the Blue Lagoon. Note the important context: the 2023–2024 volcanic eruption series from the Svartsengi system caused significant disruption to Grindavík, with lava flows destroying some infrastructure on the town’s outskirts. As of 2026, the town is partially operational - always verify the current situation at safetravel.is before booking accommodation in Grindavík specifically.
When fully operational, Grindavík offers:
- Stracta Hotel Grindavík: doubles from approximately ISK 26,000–38,000, a solid mid-range option with a good restaurant
- Northern Light Inn: rooms from approximately ISK 32,000–48,000, known for its location in the lava field and Northern Lights viewing in season
- Various guesthouses in the ISK 18,000–24,000 range
Accommodation Around the Peninsula
Keflavík/Garður area: The northernmost tip of the peninsula at Garður has a working lighthouse and excellent birdwatching (gannets at Eldey island can be seen from the point). A few farm-based guesthouses in this area run approximately ISK 20,000–28,000 for a double, and the quiet location suits travellers who want to avoid both airport and Blue Lagoon crowds.
Reykjanes Nature Reserve area (Gunnuhver, Reykjanestá): The southwestern tip of the peninsula has dramatic sea cliffs, the Bridge Between Continents, and the Gunnuhver geothermal area. Accommodation closest to this area is in Keflavík or Grindavík.
What the Reykjanes Peninsula Has to Offer
Beyond the airport and Blue Lagoon, the peninsula deserves attention in its own right:
Gunnuhver geothermal area: One of Iceland’s most active geothermal fields, with massive mud pots and steam vents. Entry is free and the boardwalk provides safe access to the dramatic landscape.
Reykjanestá lighthouse: The southwesternmost point of Iceland, with the Mid-Atlantic Ridge running directly through it. The Bridge Between Continents straddles the two plates nearby.
Eldvörp and Seltún: Smaller geothermal areas in the interior of the peninsula, free to visit and less crowded than Gunnuhver.
Krýsuvík / Seltún: Colourful geothermal field with boiling mud pools and sulphur deposits, 30km east of Keflavík and an easy half-day trip.
See our Reykjanes peninsula guide for the full volcanic landscape circuit and birdwatching locations.