Seyðisfjörður sits at the end of a 17km fjord in east Iceland, reached by a mountain pass that descends through hairpin bends to a town of painted timber buildings, a rainbow-striped street, and a blue church that appears on more Instagram posts than almost anywhere else in the East Fjords. It’s genuinely small - fewer than 700 residents - and remarkably artistically concentrated, home to the LungA Art School and a creative community that gives the town a character entirely distinct from the rest of Iceland’s east.
It’s also one of only two places in Iceland where you can arrive by international ferry: the Smyril Line’s Norröna vessel connects Seyðisfjörður to the Faroe Islands and Denmark every Tuesday in summer. For travellers beginning or ending an Iceland trip without flying, this is the gateway.
Accommodation is limited but well-curated. The town has one excellent hostel, one character hotel, a small number of guesthouses, and a handful of fjord-view cabins. Everything worth seeing is walkable from the town centre.
Zones: Where in Seyðisfjörður to Base Yourself
Old Town Centre (Rainbow Street / Norðurgata Area) The historic core of Seyðisfjörður, where the rainbow-painted Norðurgata leads to Seyðisfjörður Church (the distinctive blue church). The town’s best cafés, the gallery spaces, and most accommodation are within a few minutes’ walk. Being centrally based here means walking distance to the restaurants, the LungA School workshops, the Tvísöngurinn music sculpture above town, and the harbour. For a town this small, location differences are minimal - but this is the heart of it.
Ferry Terminal Area The Smyril Line terminal sits at the harbour, a short walk from the town centre. There’s no dedicated accommodation cluster at the terminal itself, but the short distance from any central property to the terminal means this isn’t a meaningful distinction. If you’re arriving or departing by ferry with heavy luggage, staying near the harbour rather than the upper valley removes some logistics.
Upper Valley and Lakeside The valley floor above Seyðisfjörður widens toward a lake, and a small number of self-catering cabins and farmhouses operate in this quieter upper area. The setting is scenic and calm - the ring of fjord mountains is more apparent here - but you’ll be driving 5 to 10 minutes to town for dinner.
Budget Stays - Under ISK 25,000 Per Night
Hafaldan HI Hostel
The best hostel option in east Iceland and one of the most characterful budget stays in the country. Dormitory beds run approximately ISK 9,000–14,000 per night and private rooms run approximately ISK 22,000–30,000 as of 2026. The hostel occupies the historic Seamen’s Mission building at the centre of town - a timber-framed structure from the early 20th century with high ceilings, good common room facilities, and a kitchen. Staff are knowledgeable about the local hiking routes and ferry logistics. The quality here is unusually high for a hostel at this price point; private rooms in particular represent strong value for Seyðisfjörður.
Alcoa Guesthouse
A central guesthouse offering private rooms at accessible rates. Accommodation runs approximately ISK 18,000–26,000 per night as of 2026. Rooms are clean and comfortable without the character of the Hafaldan building or Hótel Aldan. Suited to couples or solo travellers who want a private room in the centre at a budget below the character hotels. The proximity to the main street and restaurants is the main draw.
Mid-Range - ISK 30,000 to ISK 50,000 Per Night
Hótel Aldan
The most distinctive property in Seyðisfjörður and the accommodation that best captures the town’s artistic identity. Rates run approximately ISK 32,000–48,000 per night as of 2026. The hotel is split across two beautifully restored timber buildings in the old town - the rooms inside have the high ceilings and period character of early 20th-century Icelandic architecture. A small breakfast room, thoughtfully chosen furniture, and an overall sensibility that reflects the creative community surrounding it. This is not a large chain hotel delivering consistent standardisation - it’s a boutique property with real personality. For a one-night stay in Seyðisfjörður where budget allows, this is the correct choice.
Blábjörg Guesthouse
A comfortable guesthouse offering private rooms near the town centre. Rates run approximately ISK 26,000–38,000 per night as of 2026. A reliable mid-range option for travellers who want a private en-suite room without the premium of Hótel Aldan. Standards are consistent and the location is walkable to the main street. Suitable for couples and solo travellers doing the East Fjords loop who need a dependable overnight without fuss.
Splurge - ISK 50,000 and Above
El Grillo Boutique Guesthouse
A small boutique property positioned above the town with fjord views. Rates run approximately ISK 48,000–68,000 per night as of 2026. Limited rooms mean it fills quickly - book well ahead for summer stays, particularly during the LungA Festival week in July. The elevated position gives views down the fjord and over the rooftops of the town that the valley-floor properties don’t offer. A genuinely distinctive option for the area.
Self-Catering Fjord Cabins
Self-catering cabins with fjord views operate in and around Seyðisfjörður, with rates running approximately ISK 55,000–75,000 per night for two people as of 2026. These are best for couples who want privacy and their own cooking facilities, or for small groups where the per-head cost splits more favourably than a hotel room. Look for listings in the upper valley and on the fjord sides where mountain views extend behind the town. Several open from spring and close in early autumn.
Getting to Seyðisfjörður
By Air Egilsstaðir Airport (EGS), 27km west, is the main gateway. Eagle Air and Air Iceland Connect operate regular domestic flights from Reykjavík Domestic Airport (RVK) - flight time approximately 1 hour. From Egilsstaðir, Route 93 climbs up and over the Fjarðarheiði pass before descending to Seyðisfjörður in approximately 25 to 30 minutes.
Taxi from Egilsstaðir airport to Seyðisfjörður costs approximately ISK 5,000–7,000 as of 2026. For a fixed price without taxi uncertainty, pre-book an airport transfer from Egilsstaðir. Car hire at Egilsstaðir Airport is available; pick up a car if you plan to explore the wider East Fjords rather than staying solely in Seyðisfjörður.
By Bus Route 111 bus operates between Egilsstaðir and Seyðisfjörður on some weekdays - timetables are seasonal and services are limited. Verify current schedules at straeto.is before relying on this. The bus is a viable option for car-free travellers, but it doesn’t run daily and doesn’t solve getting around the wider East Fjords.
By International Ferry - Smyril Line The Norröna ferry connects Seyðisfjörður to Tórshavn (Faroe Islands) and Hirtshals (Denmark). Crossings run weekly, arriving on Tuesday mornings in summer. Booking well ahead is advisable - the summer sailings are popular and vehicles particularly fill up. The ferry is Iceland’s only international maritime connection for foot passengers and cars. See smyril-line.com for current schedules and pricing.
Route 93 Pass Note The mountain pass between Egilsstaðir and Seyðisfjörður can be affected by snow and ice even in late spring and early autumn. Check road.is for current conditions. In midsummer the road is consistently clear.
Seasonal Pricing Notes
Summer (June–August) is when Seyðisfjörður is most alive. The LungA Festival (July) and the Mural Festival (August) bring significant visitor numbers to what is normally a very quiet town, and accommodation during these weeks fills weeks in advance. Peak summer prices across the town run 40–60% higher than winter. Tuesday ferry arrivals also spike demand briefly. For a July or August visit, booking 6 to 8 weeks ahead is the minimum.
Shoulder Season (May and September) offers the best combination of open services and reduced prices. The town’s cafés and restaurants are open, the pass is reliable, and the Hafaldan and Hótel Aldan both operate. Prices drop 20–30% from peak. September brings the first aurora chances, often visible over the fjord from the town itself.
Winter (November–March) is quiet to the point of near-emptiness. Some restaurants close. The pass can cause delays. Northern Lights are possible on clear nights. Several smaller accommodation options close for the season. For travellers who want the stark winter East Fjords experience, Seyðisfjörður in November or February has a remote, almost dreamlike quality - but verify which properties are open before booking.
Key Highlights
Norðurgata (Rainbow Street) - the painted road leading to the church. Walk the full length from the commercial street to the waterfront building beyond the church. Best photographed in early morning or late evening golden light in summer.
Seyðisfjörður Church (Blue Church) - the distinctive pale blue timber church at the end of the rainbow street. One of the most photographed buildings in Iceland. The interior is occasionally open; check the door.
Tvísöngurinn Music Sculpture - a concrete acoustic sculpture by German artist Lukas Kühne on the hillside above town. Walk up from the church (approximately 15–20 minutes) for views over the fjord and a chance to hear the acoustic resonance chambers in action.
Gufufoss Waterfall - a 15-minute walk from the town centre up the valley stream. A powerful waterfall that most day visitors miss entirely.
LungA Art School - the creative hub of the town. The school building and gallery spaces are part of the town’s visual identity. During the LungA Festival in July, the school opens for performances, screenings, and workshops.
For budget accommodation and general guesthouse options across Iceland, see our guides to guesthouses in Iceland and budget accommodation in Iceland.