Where to Stay in Iceland: Regions, Types, and Prices

Iceland offers a wide range of accommodation across its different regions — from city hotels in Reykjavík to remote farm guesthouses, mountain huts, and campervans. The type and location you choose depends on your itinerary, budget, and time of year. This guide covers your options region by region.

Reykjavík

Most visitors start and end in Reykjavík, and it’s worth spending at least two nights here.

Hotels: Reykjavík has dozens of hotels ranging from international chains to boutique properties in the city centre. Hotel Borg (on Austurvöllur square) from approximately ISK 32,000–50,000 per night is one of the most central. Icelandair Hotel Reykjavík from ISK 28,000 is a reliable mid-range option. Smaller boutique hotels along Laugavegur typically run ISK 30,000–42,000.

Guesthouses and apartments: Several guesthouses in the 101 Reykjavík postcode area offer double rooms for ISK 18,000–28,000. Apartments on Airbnb or direct booking sites are popular for stays of 3+ nights, typically ISK 22,000–35,000 per night for a one-bedroom.

Hostels: Kex Hostel (Skúlagata) is the best-known and most social, with private rooms from ISK 18,000 and dorms from approximately ISK 7,000. Loft Hostel (central, rooftop bar) is another good option.

Where to base yourself: The 101 postcode (city centre around Laugavegur) is the best area for first-time visitors — walkable to almost everything. The western harbour and Hlemmur area are also good, quieter, and slightly cheaper.

South Coast

The South Coast between Reykjavík and Höfn is the most travelled stretch outside the capital, and accommodation fills fast in summer.

Vík and surroundings: Vík is the most popular South Coast overnight stop (190km from Reykjavík). Icelandair Hotel Vík offers comfortable rooms from approximately ISK 35,000–48,000. Black Sand Guesthouse is a more affordable option from ISK 22,000. Book both well in advance for July–August.

Between Selfoss and Vík (Hella, Hvolsvöllur, Kirkjubæjarklaustur): Several excellent guesthouses and farm stays in this area offer better value than Vík itself. Hotel Rangá (5-star, near Hella) is the most luxurious option on the South Coast, from ISK 65,000+. Stracta Hotel (Hella) offers good mid-range rooms from ISK 30,000.

East of Vík (Skaftafell, Höfn): Accommodation is sparse east of Vík until you reach Höfn (330km). Camp at Skaftafell (Vatnajökull National Park campsite from ISK 2,200 per person) or continue to Höfn. Hótel Höfn from ISK 28,000 and Fosshotel Glacier Lagoon (near Jökulsárlón) from ISK 45,000.

North Iceland

North Iceland — centred on Akureyri — is worth at least 2 nights if your itinerary extends beyond the South Coast.

Akureyri: Iceland’s second city has good hotel and guesthouse options. Icelandair Hotel Akureyri from ISK 28,000; Kea Hotel from ISK 25,000; and several guesthouses around ISK 18,000–24,000. The city is compact and walkable.

Mývatn area: The Lake Mývatn area (100km east of Akureyri) is worth an overnight stay. Hótel Laxá (lakeside) from ISK 35,000; Fosshotel Mývatn from ISK 30,000. Book ahead — capacity is limited.

Húsavík: Primarily a day trip from Akureyri, but overnight options include Hótel Húsavík from ISK 26,000 and several smaller guesthouses.

Snæfellsnes Peninsula

Snæfellsnes can be done as a day trip from Reykjavík (3 hours each way) but an overnight stay allows better exploration.

Stykkishólmur: The main town on the peninsula. Hotel Fransiskus from ISK 28,000; Hótel Stykkishólmur from ISK 25,000.

Grundarfjörður and Ólafsvík: Smaller guesthouses and self-catering cottages at ISK 18,000–26,000 per night, closer to the Snæfellsjökull glacier end of the peninsula.

Westfjords

The Westfjords are Iceland’s quietest and most remote region. Accommodation is limited and books up early.

Ísafjörður: The regional capital has Hótel Ísafjörður (the main option) from approximately ISK 28,000. Several guesthouses at ISK 20,000–26,000.

Rest of the Westfjords: A handful of remote guesthouses and farm stays, often self-catering. Check Booking.com and local tourist boards — not all are on major platforms.

Farm Stays

Farm stays (gisting) are one of Iceland’s most distinctive accommodation options. They range from simple rooms in working farms to well-equipped guesthouses with home-cooked breakfasts. Many offer activities such as horse riding, sheep herding in autumn, and northern lights viewings from private hot tubs. Prices typically ISK 18,000–28,000 for a double room.

Camping and Campervans

Iceland has approximately 170 registered campsites. The Camping Card (ISK 26,900 as of 2026, covers 2 people, 28 nights) is worth buying if you plan to camp for 7+ nights. Campervan rental costs approximately ISK 18,000–35,000 per day depending on size and season — see our Iceland campervan guide for a full cost breakdown.

Booking Tips

• Book summer (June–August) 2–3 months ahead, especially along the South Coast
• Compare prices on Booking.com, directly with guesthouses (often 5–10% cheaper), and Airbnb
• Many guesthouses include breakfast — factor this in when comparing prices
• If you’re flexible, shoulder seasons (May and September) offer better availability and lower prices than peak July–August
• Check cancellation policies carefully — weather can force itinerary changes

Related Guides

• Iceland budget guide — Full cost breakdown including accommodation price ranges
• Iceland campervan guide — Campervan rental costs, campsite network, and where to park
• 7 days in Iceland — Sample itinerary with overnight stops and accommodation recommendations
• Iceland in July — Peak season tips including when to book ahead