Where to Stay in Reykjavik in 2024 → 4 Ideal Areas & Hotels

Panoramic view of Reykjavik with colorful rooftops, prominent church spires, and a backdrop of snow-capped mountains under a clear blue sky

Planning your Icelandic adventures and looking for where to stay in Reykjavik? Then you’re in for a treat!

I visited Reykjavik and other parts of the country a while back and I’ve got so many useful tips for you! So keep reading and you’ll find everything you need for planning your trip, including the best areas and lodging options in the capital. 

Midborg (Downtown) is the best area for first-timers – this is where you’ll find a wide range of hotels and the main attractions! Don’t worry though, you’ll find a total of 4 areas in the post, each with a different vibe!

For each neighborhood I included a list of my hand-picked hotel recommendations (all top-rated!) for all budgets so you can easily pick your favorite accommodation! Since I know that most of you will probably want to stay in Downtown, I made sure to include various options in that area based on your interests too!

More and more tourists are coming here to see the unique Northern Lights and the country’s otherworldly natural beauty! So I recommend booking your hotels in advance! Since budget is so relative in the Nordic countries you can be sure that the prices will only increase the closer you book to your holiday.

Quick Picks for Your Stay…

Ready to book your hotels? Then check out this short list which has the best hotels in Reykjavik city center: 

Watch my video, it will give you a visual explanation of all the areas:

Which area should you choose?

Check out the map below that will help you visualize all the areas where to stay in Reykjavik, that I’ll talk about in this post:

A colorful map highlighting the best areas to stay in Reykjavik, with numbered locations and labels for easy navigation

Although Reykjavik is not a big city, it’s pretty hard to decide which neighborhood to pick as each has its own charm, advantages and disadvantages. 

But here’s where I come to help out! Below you have my list of personalized recommendations so you can pick the right area for you depending on your preferences, budget or travel interests:

Note: Please take into consideration that the budget is relative in the Nordic countries. For example a budget hotel in Reykjavik or in other parts of Iceland could be a pretty expensive hotel for other destinations. So make sure you keep that in mind when planning your trip. 

PS: If you’re looking for more accommodations for your whole trip, make sure to check out my Iceland accommodation guide to find the best places to stay!

1. Midborg (Downtown) – where to stay for first-timers 

A sweeping view of a cityscape with modern and traditional buildings under a cloudy sky, surrounded by distant hills and lush greenery

Honestly there’s no better place to stay than Midborg (Downtown), especially if you’re visiting for the first-time! This is where I stayed as well and could not be happier with my choice!

This area is the heart of Reykjavik and naturally it is home to the capital’s main attractions and some of the best hotels you’ll find in town!

Midborg also has such a fun atmosphere, especially after the sun sets and the bars get filled with locals and tourists having a great time! Yep, the nightlife scene is pretty good here!

You can spend your holiday here visiting all the attractions like the Hallgrimskirkja Church (one of the most important landmarks in the city), the National Museum of Iceland, the Öskjuhlíð (Perlan Museum) and also the super famous Harpa Concert Hall and Conference Centre which hosts different events and concerts. 

There’s also the Phallological Museum, one of the most unusual museums in the world, I’d say,  (not meant for children for sure!).

Note: 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 (I visited in Aug and while the prices are also the highest in this season, the weather was nice to us, sometimes I would be wearing just a t-shirt!). 

Aerial view of a bustling street in Reykjavik, Iceland, lined with colorful houses and a busy thoroughfare filled with pedestrians and vehicles, with the cityscape and ocean in the distance

Definitely head over to Laugavegur shopping street where you can browse through all the cool stores and warm-up with a cup of tea! There are lots of restaurants and cafes on this street and if you’re looking for a place that serves traditional Icelandic food and drinks, Svarta Kaffið restaurant is your place. Btw, definitely try the famous brennivin drink, Iceland’s signature drink, distilled from fermented grain mash, mixed with water and flavored with caraway. 

Something really cool about Reykjavik is that they have geothermal water running under the shopping streets so that they don’t get super icy and slippery when it snows!

And don’t forget to snap some pics of the famous Sun Voyager sculpture and of Rainbow Street (which is the lower part of Skólavörðustígur street) which is super famous and cute! 

If you feel like this is the right place for you, here are the best hotels to choose from:

Luxury (€300 and up)

A collage of three hotel photos to stay in Reykjavik: an open living area with a dark staircase and chic dining setup, a cozy bedroom with dark walls and a green velvet comforter, and the quaint white exterior of the Galtafell Hotel with classic architecture
  • Sand Hotel – located on the main street in central Reykjavik near all the attractions and lively bars, Sand hotel boasts spacious and comfortable rooms with modern furnishings! Grab a yummy (free) breakfast in the morning and then head out to explore! 
  • Tower Suites Reykjavík – offering a prime central location and super spacious rooms with comfortable beds and breathtaking views this beautiful hotel is surely a keeper! Here you’ll also find parking spaces and a bar!

Mid-range (€200 – €300)

  • Guesthouse Galtafell – set in a building dating back to 1916, this Reykjavík guest house has a prime location in the city center, close to many shops and restaurants. The accommodation offers self-catering apartments with wooden floors and free parking! 
  • Hótel Centrum – this accommodation is located on 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, it has an award-winning restaurant, cozy rooms and an on-site bar.

Budget (up to €200)

  • Freyja Guesthouse & Suites – are you traveling to the city on a budget but still want to be right in the city center, walking distance to all the popular attractions, restaurants and bars? Then I definitely recommend checking out this place, which has cozy rooms with private bathrooms, free parking and a terrace. 
  • City Center Hotel – here’s another affordable lodging option near all the great restaurants that offers rooms with a balcony and a private bathroom!

Other places to stay in Downtown (by type of traveler)

A serene view of Reykjavik, with a white swan on the lake in front of iconic city architecture including the green-roofed Fríkirkjan church and the towering Hallgrímskirkja cathedral

I know how popular the Downtown area is and that many of you will want to stay here as it’s super convenient and you won’t waste time on transportation and things like that! That’s why I decided to add some more Reykjavik hotels.

They’re categorized by interest and budget, so that everyone can find their dream place! So let’s check them out:

1.1 Best apartments

Downtown Reykjavik has many fabulous apartments which are perfect for those who want more privacy and also the option of eating at home and having more space, so here are my hand-picked options: 

  • Luxury: Ingolfsstræti Apartments – here’s a great apartment that has a self-catering option, a lot of space and parking. 
  • Mid-range: Thingholt Apartments – located within walking distance of the Harpa Concert Hall, this apartment offers modern rooms, breakfast and a terrace.  
  • Budget: Alfred’s Apartments – these affordable apartments come with a great location, a small kitchen and with laundry facilities. 

1.2 Best hotels with parking

If you’re renting a car (here’s a post on how to do it) to explore the country then this section with hotels in the city center that offer free parking is for you:

  • Luxury: Skuggi Hotel – this accommodation boasts a central location, modern rooms where you can relax after a day of exploring! You’ll also find a bar where you can enjoy some drinks and free underground parking. 
  • Mid-range: Eric the Red Guesthouse – offering some lovely rooms with a Tv and free Wi-Fi, this guesthouse has everything you need for your trip, including free parking.
  • Budget: Baron’s Hostel – if you’re looking for something a bit more affordable, then check out this hostel that has private and shared rooms and free parking. 
A rainbow painted street in iceland.

1.3 Top hotels for families

Find the most amazing hotels right in the city center that will be perfect for you and the kids:

  • Luxury: Hotel Ódinsvé – a great place for you and the family set near Laekjartorg Square that has family rooms with tea and coffee makers, and a bistro where you can enjoy Danish food!
  • Mid-range: Hotel Von – these family rooms boast some incredible views of Reykjavik’s iconic church and it also has a restaurant and terrace. 
  • Budget: Room With a View Hotel – offering great value for price, this accommodation boasts spacious suites with large windows overlooking the city and also a bar. 

1.4 Best hotels with airport transfers

No need to use public transport or taxis! These hotels below offer an airport shuttle for a small fee:

  • Luxury: Ódinsvé Hotel Apartments – you’re going to love these apartments that are set near Reykjavik’s main street! All have modern designs and wooden floors! Guests will also have access to an airport shuttle (that you can request after booking your room) for a small fee. 
  • Mid-range: Hotel Borg by Keahotels – located near the Laugavegur shopping street, this hotel offers amazing rooms, a spa center where you can relax and an airport shuttle for a small fee. 
  • Budget: Fosshotel Reykjavík – enjoy a yummy breakfast at this modern hotel that has a fitness center, a restaurant and an airport shuttle.

2. Vesturbær / Reykjavik 107 – the coolest area to stay

A vibrant city panorama showcasing an array of colorful buildings with a backdrop of blue sea and mountains under a partly cloudy sky

Vesturbær, which literally means the “West Town”, is also known as Reykjavik 107 and it’s a  really cool place to stay in Reykjavik!

NOTE: The numbers 101, 105 and 107 represent the postal codes for each area. Reykjavik 101 is for the whole Downtown area, and then 105 and 107 are for the other areas outside the city centre. 

Vesturbær (also known as the Old West Side) is relatively close to Midborg, around 3 km (2 miles) away, but you can always use public transport to get around!

This neighborhood is also pretty close (30 min away by public transport) to the Seltjarnarnes area, that is located right at the tip of the peninsula, and which is famous for its Northern Lights viewpoint! 

Lots of tourists prefer this area as it boasts some amazing Icelandic architecture (definitely a great spot for taking pics) and also because this is where you’ll find the Old Harbor area which is super pretty!

If you’re taking any whale-watching tours while visiting then it’s super convenient to stay here as they leave right from the Old Harbor, so you can get there quickly before your cruise. 

Not all the city’s attractions are set in the Downtown area, you’ll find some fun ones here as well such as the The Living Art Museum, the Whales of Iceland where you can see an amazing whale exhibition and also the Saga Museum, which is a great place to learn more about Iceland’s history!

By the way if you’re thinking of taking some tours from Reykjavik to see the Northern Lights, definitely head first to the Aurora Reykjavik Museum which offers so much useful information about the famous Aurora Borealis and how to best see them!

Luxury (€250 and up)

A collage of three hotel photos to stay in Reykjavik: a twin bedroom with nautical stripes and wooden accents, a bright corner with two plush chairs and a white table, and a cozy library lounge with shelves of books and comfortable seating areas
  • Sudurgata – how amazing are these luxury apartments? They are super spacious and have such a great style! The rooms are beautifully-decorated and have large windows that overlook the city. 
  • Black Pearl Apartment Hotel – one of the best luxurious hotels that’s perfect for families, couples and all types of travelers! These apartments come with a lot of space, a kitchen (perfect for those who want to save money and eat at home) and a flat-screen Tv, for the nights when you just want to crash!

Mid-range (€150 – €250)

  • Icelandair Hotel Reykjavik Marina – this lovely boutique hotel has all the facilities you need for your Icelandic vacation! Some of their rooms come with a balcony and they also have a lively bar on-site plus a lounge area with a fireplace where you can relax after a day out!
  • Refurinn Reykjavik Guesthouse – looking for some modern rooms? Then check out this hotel that offers free parking and a shared kitchen. 

Budget (up to €150)

  • Apartments Reykjavik – enjoy your coffee on the balcony of this great accommodation that has a kitchen, a very good location and free parking.

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3. Laugardalur – where to stay in Reykjavik for families

A bustling outdoor public swimming pool with slides and a hot tub, filled with people enjoying a sunny day
photo credits: (rinse). ”Laugardalur”. Photograph under creative commons license, available on Flickr. All rights belong to the photographer.

Located 5 km (3 miles) away from the city centre, Laugardalur is a charming neighborhood, not too far from Árbær (a tranquil area), that’s perfect for families!

Boasting a residential and calm atmosphere, the area in East Reykjavik, is home to so many fun activities that are great for both kids and adults! 

This area in Reykjavik is also known as the “Hot Spring Valley” because there are many thermal baths (natural hot tubs) there where you can go regardless of the time of year you visit.

One of those places is Laugardalslaug which also has an outdoor and indoor swimming pool, steam baths and many other cool things! 

I’m sure the kids will absolutely love visiting the Húsdýragarðurinn Park & Zoo, set near the Teigar area, where they can make some really interesting friends! And right near the zoo there’s the Grasagardur Botanical Garden which is also a super fun place to explore! 

Laugardalur is also great for those who love spending time in the great outdoors! There are some really beautiful smaller areas that you can explore here on your walks, like Laugarnes!

Luxury (€200 and up)

A collage of three hotel photos to stay in Reykjavik: a hotel lobby with amusing facts about Iceland on the wall, a simple bedroom with a large window overlooking the city, and a tall, modern hotel building with a glass facade
  • Grand Hotel – this luxurious hotel offers some amazing family rooms with views of the mountain and a flat-screen Tv, perfect for those movie nights with the kids! This  Reykjavik accommodation comes with a spa center where you can relax and also with free private parking.
  • Alva Hotel – boasting family rooms for a great value, this accommodation has all the facilities you need, including coffee and tea makers and a desk.

Mid-range (€150 – €200)

  • Hilton Reykjavik Nordica – 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. Plus, you will be within walking distance to many green spaces, restaurants and cafes which is a big plus!
  • R13 – a cool boutique hotel that has stylish family rooms with a seating area and comfortable beds. The accommodation offers free parking and a continental breakfast. 

Budget (up to €150)

  • Hótel Múli – this hotel offers very good value and it’s one of the best budget hotels in the area! Each morning you’ll enjoy a complimentary breakfast and you’ll also have access to free parking.

4. Hlídar – where to stay in Reykjavik on a budget

A lively street scene with pedestrians, shops, and colorful banners under a muted sky, conveying a sense of urban activity and culture

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 (as I mentioned earlier, the number near Reykjavik is the postal code of that area).

This area has so many perks! Not only is it located right near Downtown Reykjavik (super close to all the attractions) but it also offers, as I mentioned earlier, lots of cheaper Reykjavik accommodations! Meaning you can save some money to take tours or do something else in town. 

A great combo, am I right? Another great advantage of staying in this area is that it’s a bit calmer than the city centre (or Reykjavik 101), so you can get some peace and quiet at night.

I guess the only downside about this neighborhood is that it doesn’t have many restaurants and bars. However, since you’re super close to central Reykjavik, you can quickly head to Laugavegur street and grab a bite!

But don’t worry you will find some fun places to visit like the Reykjavík Art Museum, in the smaller area of Holt, which has lots of artworks by local artists, the Klambratún park, where you can go for a walk at sunset and the Höfði House in the nearby area of Tún. 

That being said, here are the best hotels in this area that I hand-picked for you!

Luxury (€180 and up)

A collage of three hotel photos to stay in Reykjavik: a minimalist living room with a black couch and circular white table, a rustic chic bedroom with a canopy bed and fur throw, and the sleek, modern exterior of the Storm Hotel
  • Eyja Guldsmeden Hotel – I love the four poster beds in this cool boutique hotel that comes with a fitness center! The accommodation also has a restaurant and a lively bar where you can enjoy some drinks after a day out!
  • Midgardur by Center Hotels –  chill in the hot tub at one of the best Reykjavik hotels! The accommodation comes with a spa center, rooms that boast sea and mountain views and a restaurant that serves a mix of Icelandic and international cuisine. 

Mid-range (€100 – €180) 

  • Storm Hotel by Keahotels – a great hotel that’s perfect for solo travelers and not only! The accommodation comes with a complimentary breakfast, a lively bar and a terrace. 
  • Snorri’s Guesthouse – feel at home in this super cozy guesthouse that offers rooms for all types of tourists, including solo travelers. Start your mornings here with a complimentary breakfast and take advantage of their public bath.

Budget (up to €100)

  • Reykjavík Central Guesthouse –  simple yet super affordable! These rooms have all the essentials including comfortable beds, a balcony, a small kitchen and free Wi-Fi. 
  • Nordurey Guesthouse – one of the best budget hotels in the area that has rooms with a small dining area and a private area.
👑 Luxury price:€300
💵 Mid Range:€200
🛏️ Budget:€130
📍 Best neighborhood:Midborg / Downtown
🛎️ Best luxury hotel:Sand Hotel
💵 Mid-range hotel:Hótel Centrum
👛 Best budget hotel:Freyja Guesthouse & Suites

BONUS: Best hotels near Reykjavik Airport

A serene outdoor sculpture of a bird perched on a sphere, set amidst a reflective pool with rocks, with an airport building in the background under a clear blue sky

Whether you have a super early or late flight, or if you have to wait until the morning to pick-up your rented car for your Iceland trip, then you could consider staying in a hotel right near the 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.

If you decided to do so, scroll down to find my recommended airport hotels in Reykjavik (one per each type of budget):

  • Luxury: Aurora Hotel – with an amazing location right near the airport this great hotel offers a breakfast buffet and comfortable rooms with mountain views. 
  • Mid-range: Hotel Duus by Keflavik Airport – this hotel comes with an on-site restaurant, free Wi-Fi, a 24-hour front desk, beautiful rooms, a tour desk and more! Plus, it’s located only a 10-min drive away from the airport and it offers a free shuttle service.
  • Budget: Courtyard by Marriott – a more affordable place to stay just 250m away from the airport that has rooms with a flat-screen Tv and a restaurant.

FAQs about where to stay in Reykjavik

An aerial view of a city's busy streets, with a mix of colorful residential and commercial buildings, roads with moving traffic, and a roundabout centering a statue

💵 Is it expensive to stay in Reykjavík?

Yes, Reykjavik is generally an expensive city, but you can also find affordable accommodations like hostels and guest houses, like Freyja Guesthouse & Suites, to stay on a budget!

👪 Where to stay in Reykjavik with the family?

The best area to stay in Reykjavik with the family is the up and coming district of Laugardalur, which has some great hotels like the Grand Hotel.

🌌 Where to stay in Reykjavik to see the Northern Lights?

Grótta Island, in the area Seltjarnarnes, is the best place to see the Northern Lights in Reykjavik. You can stay in Vesturbær, which is located 30 min away by public transport from the island and has some great hotels like Sudurgata.

📍 Which is the best area to stay in Reykjavik?

Midborg (Downtown) is the best area to stay in Reykjavik! There you’ll find colorful streets, iconic attractions and great accommodations like the Sand Hotel.

🤔 Is it better to stay in Downtown Reykjavik?

Yes, especially if you want to visit all the attractions like the museums and art galleries. Downtown has some of the best Reykjavik hotels, like Guesthouse Galtafell.

📅 How many days do I need in Reykjavik?

I’d recommend spending 3 days in Reykjavik or even more if you’re planning to take day trips to some unique places like the Golden Circle, Ring Road or the Blue Lagoon. 

🚶 Is Reykjavik a walkable city?

Yes, Reykjavik is a pretty walkable city and you can get to most places on foot and for the ones that you can’t reach by walking you can easily use public transport. 


A winter scene of a city with diverse architecture, showing homes and buildings blanketed in snow, with bare trees and cars indicating a cold climate.

There you have it, ladies and gents! You have reached the end of my complete guide on where to stay in Reykjavik. 

This post has everything you need to know about the best neighborhoods in Iceland’s largest city and also many Reykjavik hotels that I hand-picked after comparing all the options. 

I hope you found this post useful and maybe you already found the ideal hotel for your preferences and budget from my recommendations above! If not, here are my absolute favorite options that have great reviews and a central location:

  • Sand Hotel – one of the best luxury hotels set on the main street that offers a bar and a delicious breakfast 
  • Guesthouse Galtafel – set in a historic house this hotel comes with family rooms and free parking 

The hotels in Reykjavik book out months in advance, and I recommend you do the same as you can score some better prices.  

P.S.: Make sure to check out my list of awesome things to do in Reykjavik – I am sure it will help you to plan your vacation and not to overpay where not needed to!

Are you traveling to Reykjavik soon? Need more help with your travel plans? Let me know in the comments below, I am happy to help! 


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