The Nordic island of Iceland has been making “noise” in the social media scene for years already because of its breathtaking show of Northern Lights. It easily became a bucket list destination to almost every local of the world. Well, who would not want to lay eyes on an Aurora show that hits close to the Cosmos? I definitely loved doing so!
Did you decide to organize an excursion to Iceland? You will most likely land in Reykjavik, the capital, and staying for at least one day there is an excellent idea. Now you might be wondering where to stay in Reykjavik, right? No worries, I got you!
While there are many sights in Iceland to witness such beauty, allow me to put the spotlight right on this moment at Reykjavik, the capital and the largest city of Iceland. On top of the Northern Lights show, you will surely love the vibrant and pastel colored buildings there, preserved establishments from the 1920s, geothermal pools, museums and galleries, nightlife, the amazing LGBT community, and the midnight sun that happens during summer time where the sun shines until the end of the day.
Now, here is the wide array of Reykjavik accommodations I curated especially for you for when your itchy feet caught the travel bug once again. In this post you can find the 4 best central neighborhoods to stay in Reykjavik with my hand-picked hotel recommendations in each of them!
Are you ready? Let’s go!
- If you’re in a hurry…
- 1. Midborg / Downtown Reykjavik – Where to stay for the first time
- 2. Hlídar – Reykjavik 105 – Where to stay in Reykjavik on a budget
- 3. Vesturbær (West Town) – Reykjavik 107
- 4. Laugardalur – Where to stay in Reykjavik with a family
- Best apartments in Reykjavik
- BONUS: Best hotels near Reykjavik Airport
If you’re in a hurry…
The best area to stay in Reykjavik for first-time visitors is Miðborg (Midborg), the very center of the city. This is the perfect place to stay if you want to be in the center of the action, close to all the interesting sights and attractions!
Best hotels in Reykjavik, Iceland in a nutshell
Which area should you choose?
First of all, here is a map of all 4 Reykjavik neighborhoods I am going to talk about in this article, so you get a better understanding of how the city is organized:
Now, even if Reykjavik is not a big city (it’s rather small, I might stay), it’s still divided into different neighborhoods, each of them with its own charm, advantages and disadvantages. Ok, but how can you choose? No worries, just check out my list of personalized recommendations below and pick the right area for you depending on your preferences, budget or travel interests:
- Where to stay in Reykjavik for luxury: Midborg
- Where to stay in Reykjavik on a budget: Hlídar
- Where to stay in Reykjavik for nightlife: Midborg
- Where to stay in Reykjavik for families: Laugardalur
You might be wondering: Is Reykjavik expensive? Can any type of traveler afford going to Reykjavik? The answer to both of these questions is yes! Reykjavik is not a cheap city, but you can find anything there in terms of accommodations, from hostels and guest houses to luxurious hotels with spas – and everything in-between!
Keep reading in order to find out everything you need to know about the top 4 neighborhoods in Reykjavik:
1. Midborg / Downtown Reykjavik – Where to stay for the first time
Midborg, known as Reykjavik 101 is the heart and soul of the city and the best area for anyone visiting this wonderful city for the first time!
Midborg is an excellent choice for all types of travelers out there, as it’s full of great restaurants, museums, bars and, of course, shops. And yes, it’s true, Midborg is also the best area to stay in Reykjavik if you’re interested in nightlife!
Some of the highlights of this area include Hallgrimskirkja Church (one of the most important landmarks in the city), the National Museum of Iceland, Nauthólsvík Beach, the Volcano House and Harpa Reykjavik Concert Hall as well. While you’re around the downtown area, you can also do some shopping on Laugavegur Street!
If you feel like this is the right place for you, here are the best hotels to choose from:
Luxury (US$150 and up)
- Sand Hotel – Located on the high street of Laugavegur in the downtown area, Sandhotel is the newest boutique hotel in town that promises a clean and chic atmosphere throughout your stay. Sandhotel also makes it easy for you by arranging your tours to Iceland’s wonders. One of the best things about this place is that it’s located walking distance to tons of restaurants and popular attractions in the area. Definitely one of the best places to stay!
- Reykjavik Residence Apartment Hotel – Built with soundproof rooms, this is definitely the place to rest in when you want to veer away from the busy surroundings of the city. Definitely one of the best hotels in Downtown Reykjavik! Plus, you will be walking distance to many great restaurants, bar options and popular attractions and it’s a great place to enjoy the Northern Lights in Iceland as well!
Middle-priced (US$70 – US$150)
- Icelandair Hotel Reykjavik Natura – Icelandair is an eco-friendly hotel situated next to the peaceful woods of Öskjuhlíd Hill. It swears by the local environmental policy of Iceland and echoes what needs to be done to its guests. I honestly believe this place is a great choice if you want to be close to all the popular landmarks in Downtown Reykjavik!
- Hótel Centrum – This accommodation is established in one of the oldest streets of Reykjavik. I don’t know about you, but that is enough reason for me to stay here. What is more, its award-winning restaurant named Fjalaköttur is something you should definitely put on top of your list while you’re here. Another cool advantage is that you will have many restaurant and bar options nearby – great for all types of travelers!
Budget (up to US$70)
- Igdlo Guesthouse – When it comes to the question on where to stay on budget in Reykjavik, you can totally take a look at this hostel-guesthouse. A family-run accommodation, Igdlo Guesthouse features spacious rooms that are fully-furnished with wooden accents. The hotel is situated nearby the bus station, plenty of restaurants, night bars and the airport, making every commute easy for its guests. I recommend it to all travelers on a budget! Plus, you will always be surrounded by plenty of restaurants in this area!
- Apartments by ylma – Ránargata – Are you traveling to the city on a budget but still want to be right in the city centre, walking distance to all the popular attractions, restaurants and bars? Then I definitely recommend checking out this place, you might fall in love! This is actually a super nice guest house that offers apartments to stay in, all of them containing everything you might need for an awesome stay. In short, get ready for a super pleasant experience for some unbeatable rates!
2. Hlídar – Reykjavik 105 – Where to stay in Reykjavik on a budget
Are you traveling to the city on a tight budget? No worries, you’ll find plenty of affordable accommodation options in Hlídar, also known as Reykjavik 105!
One of the best things about Hlídar is that it’s right near Downtown Reykjavik, making it a GREAT solution if you want to be super close to all the action but still want to save some money on accommodation. A great combo, am I right? Another great advantage of staying in this area is that it’s a bit calmer than Reykjavik 101, so you can get some peace and quiet at night.
Talking about downsides, unfortunately this area doesn’t have many bar and restaurant options to choose from, but you can always walk to Midborg to explore the best things there (it’s only 15 minutes by foot!). If you want to do some exploration, you should know that Reykjavík Art Museum is in this area, as well as Phallological Museum, one of the most unusual museums in the world, I’d say (not meant for children for sure!).
That being said, here are the best hotels in this area that I hand-picked for you:
Luxury (US$110 and up)
- 105 – A Townhouse Hotel – In case you want to be super close to Downtown area and all the popular attractions and landmarks there, then I recommend checking out this place! It’s one of the top hotels in Iceland and it’s my recommendation for people who want to travel in luxury to this beautiful city and want to be close to many restaurant and bar options in the center. Just check out the pictures and see for yourself, I’m sure you’ll like it! Get ready for one of the best experiences in Iceland! Ah, this is also one of the best Reykjavik hotels if you’re traveling to see the Northern Lights in Iceland.
- Eyja Guldsmeden Hotel – Here’s another amazing option for all travelers that want to be spoiled during their stay, while being located extremely close to the Downtown area as well. This beautiful hotel has an on-site bar, a restaurant and great reviews, which is why I am recommending it to all travelers that want to be based in Hlidar. I hope it will fit your travel plans!
Middle-priced (US$50 – US$110)
- 22 Hill Hotel – All room selections at this accommodation have the basic amenities you need. However, its Potturinn og Pannan restaurant is the game changer. It offers Icelandic cuisine with concoctions of the flavors around the world. The rooms are extremely clean and very modern and the service offered here is pretty flawless. I consider it to be a great choice if you want to explore everything that the city has to offer as well as the Northern Lights in Iceland!
- Stay Apartments Bolholt – If you like a hotel that offers a great value for the money you’ll be paying and that is walking distance to Downtown Reykjavik as well, then I totally recommend checking this place out! It’s great for families as well and for travelers going to the country to see the Northern Lights in Iceland! Get ready for a super pleasant experience, as you can choose from different suites and you’ll be close to plenty of bar and restaurant options as well!
Budget (up to US$50)
- Hlemmur Square Hostel – Are you traveling to Reykjavik on a budget but still want to enjoy all the best things that this neighborhood has to offer? No worries, there are plenty of good options out there! For example, this hostel is set on the 3rd and 4th floors of the building where custom-made beds can be slumbered on. There are mixed bedrooms of 4 and 6 and this hostel offers enough lockers, chairs, a bar, two kitchens, and other spaces for you to store your stuff and mingle with the other guests.
- Galaxy Pod Hostel – Here’s another amazing option for all those of you that are planning to travel on a low budget but still want to be in a good neighborhood, close to Downtown as well. This is also a great opportunity in case you didn’t get to sleep in a pod hostel before and want to try it! The cabins are comfy and just perfect for a comfortable night sleep and you’ll also be nearby many restaurants and bar options. Check out the deals and get ready to be amazed, budget travelers!
3. Vesturbær (West Town) – Reykjavik 107
Vesturbær, which literally means the “West Town”, is also known as Reykjavik 107 and it’s one of the coolest and most underrated areas in Reykjavik, Iceland! It’s a central area located relatively close to Midborg (3 km away, but no worries, there’s always public transportation).
Vesturbær is actually located near the old harbour of Reykjavik and it’s a great place to stay both in terms of accommodation but also because you will always be surrounded by awesome restaurants, cafes, bars and clubs as well.
While you’re around the area, make sure to pay a visit to The Living Art Museum, the Whales of Iceland (a very cool whale exhibition), the Saga Museum and more! Plus, I definitely recommend going to Aurora Reykjavik Museum in case you won’t be able to see them during your trip but still want to learn everything about them!
Convinced? Here are the best hotels in this neighborhood to choose from, all sorted by budget for your convenience:
Luxury (US$150 and up)
- Sudurgata – Luxury Dream Apartment – Are you looking for one of the best apartments in the city? No worries, you just found it! If you’re traveling to Iceland with one thing in mind and that is completely luxury and splurging, then I’m pretty sure this accommodation will make all your dreams come true. One of the top advantages about staying here is that this place is not far from the Downtown area either and I definitely recommend it if you want to see the Reykjavik lights!
- Black Pearl Apartment Hotel – Being “passionate perfectionists,” father and son Klaas Hol and Bert repurposes existing buildings to a new one, which explains how Black Pearl Apartment Hotel came to life. It was once an apartment and they gave a whole new meaning to it by transforming it to as one of the best accommodations in Reykjavik. Plus, you’ll have plenty of restaurant options nearby, as well as the Downtown area! Totally recommended for a great budget stay in Iceland!
Middle-priced (US$70 – US$150)
- Embassy Apartments Downtown – In case you’re looking for the best hotels out there that offer a great value for the money you’ll be paying, you are on the right route! This is one of my top mid-range hotel recommendations in Vesturbaer and a great choice if you’re planning to see the Reykjavik lights during your stay. All the apartments they offer are very beautiful and sparkling clean, by the way!
- Icelandair Hotel Marina – If you’re looking for a wonderful mid-range place that has beautiful and clean rooms, an on-site restaurant and that offers an excellent service for your Iceland vacation, then you should definitely book a room here! Besides the good reviews and the awesome facilities, one of the top things about staying here is that you will be super close to many green spaces and many restaurants and bars. Just check out the pictures and get ready for a great experience!
Budget (up to US$70)
- Reykjavik Downtown HI Hostel – Unfortunately, I could only find a good budget hotel in Vesturbaer, but no worries, it indeed offers a very good service! In all honesty, this is one of the best options out there if you’re looking for a cheap place that will offer a great night sleep after a full day of chasing the Northern Lights or exploring all the best things that Reykjavik has to offer. The hostel is super clean and the staff is very friendly and always willing to help!
4. Laugardalur – Where to stay in Reykjavik with a family
Wondering where to stay in Reykjavik so you can enjoy a calm atmosphere?
Laugardalur is a charming neighborhood located in the Northern part of the city, not far from the city center. It’s my top recommendation for people traveling to Reykjavik with their family because you will have TONS of activities to choose from that will please both grown-ups and children alike!
This area in Reykjavik is also known as the “Hot Spring Valley” because there are plenty of thermal baths there where you can go regardless of the time of year you visit. You can do hiking here as well, which I think is a great bonus for all those of you seeking some adventure!
If you’re wondering about the sights located here, then you should totally add Grasagardur Botanical Garden to your list, as well as Húsdýragarðurinn Park & Zoo, Laugardalslaug (if you love swimming), Asmundur Sveinsson Sculpture Museum and more.
Laugardalur is also more laid-back because it’s a residential area, so I totally recommend it to all those of you looking for some peace and quiet! If you feel like you belong here, scroll down to find my list of recommended hotels in this area:
Luxury (US$120 and up)
- Grand Hotel – This one’s for all travelers out there looking for a super spoiled and luxurious stay in the city! This awesome hotel offers a great service and if you book your room here, you will have many restaurants and bars nearby. It has an on-site restaurant and the rooms are simply superb, I’m sure you will fall in love! Some other cool facilities here include free gym access, a huge outdoor swimming pool, free Wi-Fi, free parking and more!
- R13 – A Townhouse Hotel – In case you want to enjoy the ultimate stay in one of the best places for families in Reykjavik, then I urge you to check out this awesome accommodation! This beautiful offers clean and nicely decorated rooms, free Wi-Fi, a great location, a sun terrace, gorgeous city views and more! Plus, you will find many food places close to you in case you get bored and want to explore some Icelandic cuisine!
Middle-priced (US$50 – US$120)
- Nordurey Hotel City Garden – Here’s my first recommendation for all travelers that are looking for an excellent mid-range hotel that offers a very good value for the money and that will help them save some bucks for their Iceland trip. Free wifi, a flat-screen TV, a very good location right in the heart of the neighborhood, free toiletries – these are just some of the advantages you’ll benefit from if you choose to book your stay here!
- Hilton Reykjavik Nordica – In case you are looking for a very good mid-range hotel that is perfect for families as well, this one’s for you! This superb hotel offers a delicious breakfast buffet, friendly and helpful staff, a 5-star gourmet restaurant with amazing dishes, free Wi-Fi and a top-rated location – what more can you wish for for your Iceland vacation?! Plus, you will be within walking distance to many green spaces, restaurants and cafes – a big plus!
Budget (up to US$50)
- Reykjavik City HI Hostel – Reykjavik City HI Hostel in Iceland is another eco-friendly accommodation that you should not miss on your list. This hostel has got your back with a buffet breakfast, a nearby 24/7 supermarket, communal kitchens, movie nights, social events, refreshing courtyard, free WiFi access, and more!
- Lækur Hostel – This cute and cozy hostel is fit for both solo travelers and families that are looking to save some money on accommodation so they can spend them on visiting some other beautiful parts of this incredible country. If you choose to stay here, you will enjoy free Wi-Fi, an on-site restaurant, a shared kitchen, luggage storage and many other cool facilities and amenities. Trust me, this hostel offers everything you’ll need and more for an unforgettable Iceland trip!
Best apartments in Reykjavik
For those of you looking for a cozy, homey feeling during your stay in Reykjavik, then I definitely recommend booking an apartment. Luckily for you, there are plenty of Airbnb options in Reykjavik for all tastes and budgets out there!
Below I have selected the best ones I could find in Midborg, the center of the city and my top recommendation for travelers visiting Reykjavik for the first time:
Luxury (US$140 and up)
- Royal Stay in Reykjavik. A Place to Call Home – If you’re wondering if it’s possible to enjoy an upscale stay in Reykjavik even if you choose an apartment instead of a hotel, let me give you a quick answer – yes, a million times yes – and this place is the perfect example! It’s one of the best places to stay because it’s located walking distance to all the important attractions in the center. Plus, it’s great for families of 3 as well; I’m sure you’ll like it a lot!
- City Center Superb Studio – Here’s another excellent choice in case the apartment above is not available for your travel dates. This one’s walking distance to the main sights in the city as well and it offers everything you might need for a super pleasant stay – including a nice view of the garden. Just check out the pictures, I’m sure you’ll love it!
Middle-priced (US$100 – US$140)
- 100yo Gem in Heart of Reykjavik – In case you’re looking for a true gem located in the Downtown area, walking distance to all the interesting sights and activities, let me tell you that you just found it, my friend! This is a super nice private room in a house that’s both sparkling clean and VERY nicely decorated. Just perfect for all those of you that want to save some money during their Iceland trip.
- Perfect Accommodation for Low Price – Here’s another one on my list of the best mid-range apartments that has excellent reviews. Trust me, even though your budget is not that big, you will still find superb accommodation for your stay, especially if you’re visiting the city to see the Northern Lights in Iceland. For example, this cute studio is a very good option for you!
Budget (up to US$100)
- Downtown-Bright-Comfortable room “free parking” – In case you don’t have a big budget but you still want to be in the Downtown area, no worries, I have found one of the best places for you! Besides the nice decor and cleanliness, one of the top advantages about staying here is that you’ll enjoy free parking without paying any extra fee – a good plus!
- Attic room in actors home, BEST LOCATION – E – Are you traveling to the country to see the Northern Lights? Is your budget kind of little? Do you still want to be located in the center of the city? No worries, this private room is the right choice for you! It’s a superb attic room that will offer one of the best budget stays in the entire city – just check out the pics!
BONUS: Best hotels near Reykjavik Airport
Reykjavik International Airport (KEF), officially called Keflavik Airport, is the main airport of the city and the place where you’ll most probably land when you arrive in the country. In case you have a super early or super late flight or if you have to wait until the morning to pick-up your rented car for your Iceland trip, then spending the night close to the airport might be a very good idea for you!
If you decided to do so, scroll down to find my recommended airport hotels in Reykjavik (one per each type of budget):
- (Luxury) Hotel Duus by Keflavik Airport – This is my recommendation for all those of you that want to enjoy some luxury. This hotel offers an on-site restaurant, free Wi-Fi, a 24-hour front desk, beautiful rooms, a tour desk and more! Plus, it’s located only 3.4 km from the airport and it offers an airport shuttle as well.
- (Middle-priced) Airport Hotel Aurora Star – Here’s one of the best mid-range hotels near Keflavik airport! This one is literally 400m from the airport and it offers an excellent service – trust me, you just cannot get closer than this!
- (Budget) Nupan Deluxe – And here I present to you one of the best budget options out there in case you want to be 3 km from the airport and save some money as well. This accommodation offers free Wi-Fi and many other nice facilities and amenities that you will surely enjoy!
There you have it, ladies and gents! You have reached the end of my complete guide on Reykjavik accommodation! I hope you found this post useful and maybe you already found the ideal hotel for your preferences and budget from my recommendations above, am I right?
In this post I have told you everything you need to know about the top 4 neighborhoods in Reykjavik, together with my hand-picked hotel recommendations for each of them. I have also given you some awesome recommendations for apartments in the city center, as well as airport hotels in case you need them. In short, you have everything your heart might desire in the post above!
If you want to witness the incredible midnight sun, I suggest you pay a visit to Reykjavik from the month of mid-June to August. If you want to celebrate the Reykjavik Pride Festival alongside its amazing community, I suggest you come by early August.
P.S.: Make sure to check out my list of awesome things to do in Reykjavik on a budget – I am sure it will help you to plan your vacation and not to overpay where not needed to!
Are you traveling to Reykjavik, Iceland soon? Need more help with your travel plans? Let me know in the comments below, I am happy to help! And in case you need more travel inspiration for this wonderful country, here you can find all my posts about Iceland.
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