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Where to stay in Iceland (2023) – best areas + hotels

Last updated on by Claire / this article contains affiliate links (Info)

Are your trying to decide where to stay in Iceland?
The choices of towns and accommodations can be overwhelming.
Below is my complete guide to the best areas to stay in Iceland and accommodation suggestions including:

  • Where to stay in towns such as Reykjavik, Vik...
  • Where to stay in regions such as South Iceland, the West Fjords...
  • Where to stay near attractions such as Diamond beach and the Golden Circle
  • Where to stay in Iceland to see the northern lights and more!
Iceland Accommodations - Iceland Travel - Iceland Hotels - Where to stay in Iceland
Table Of Contents
Where to stay in Iceland - best areas on a road trip or single place
Best places to stay in Iceland - FAQs
How are the Iceland accommodations - what to expect?
Where to stay in Reykjavik - Accommodations
Where to stay on the Golden Circle - Accommodations
Where to stay in South Iceland 
Where to stay in the Snaefellsnes Peninsula
Where to stay in North Iceland - Akureyri and more
Where to stay near Iceland's airport - Keflavik Accommodation
Where to stay in the West fjords of Iceland
Where to stay in Iceland for Northern lights

In this article, no ads, no sponsored posts. Just some affiliate links.
If you purchase through them I get a commission at no extra cost to you (Disclosure).

Where to stay in Iceland - best areas on a road trip or single place

Best places to stay around Iceland (Summer and Winter)

For each region you visit you can opt to stay in one of the towns where you will find restaurants and shops or you can opt for farms and guesthouses out in Nature to wake up to beautiful views and feel closer with the Earth.
The main Iceland Accommodation hubs are:

Where to stay in Iceland best area map

Where to stay in Iceland - Map

driving in Iceland

driving in Iceland

Should you stay in one place in Iceland?

If you have only 3 or 4 days and it is your first time in Iceland, you can stay in Reykjavik and do day trips.
However, if you have more, then I recommend that you hit the road and change accommodations every night to be able to cover more road and discover many more of the wonders Iceland has to offer!
Here are some driving times to give you a better ideas:

Map Ring Road Iceland itinerary driving times

Iceland Ring Road driving times

If you need help planning your road trip check out my:

Need to rent a car in Iceland?

How to rent a car in Iceland 2

See my 36 practical tips

to choose the best car to rent

for the roads in Iceland

and find the best deals

+ read more

or directly see the best deals on my favorite platform

Best places to stay in Iceland - FAQs

Which part of Iceland is more beautiful?

That is such a difficult question. All the regions are Iceland have something special:

  • The South Coast has massive waterfalls, black sand beach and glacier lagoons with icebergs
  • Northern Iceland has Many volcanic features more or less recent showing the power of Nature
  • The Snaefellsnes peninsula is Iceland in Miniature
  • The East fjords offers impressive scenery at every turn, although less varied
  • The West Fjords are very impressive and away from the crowds, but more difficult to explore
  • The Central Highlands offer untouched landscapes with volcanoes, waterfalls, lava fields, lakes... but you need a high clearance 4WD

My absolute favorite region in Summer is Northern Iceland, especially around Lake Myvatn. It feels like post-apocalyptique.
And my absolute favorite region in Winter is the Snaefellsnes peninsula, just a showy wonderland of contrast with black and white.

Which part of Iceland is more beautiful best are to stay in Iceland

Is it worth staying in Reykjavik?

Yes, if you love cities, restaurants and want to learn more about many aspects of Iceland.
Yes, if you have only a few days and don't want to drive.
No, if you are limited in time and are focused on see the Land of Fire and Ice.

Reykjavik is a trendy city with nice restaurants, shops and now many museums and attractions.
There are things to do for everyone such as the whale museum, the cathedral, Flyover Iceland...
However, if your primary objective when visiting Iceland is to see the power of Nature, then I think Reykjavik can be skipped.
There is so much to see all around the country!

See best rated accommodations in Reykjavik.

Reykjavik Whale Museum

Reykjavik Whale Museum

Where to stay in Iceland to see the Northern lights

  • Best areas to stay in Iceland to see the Northern lights
    Northern Iceland is generally considered better to see the Northern light as it has clearer skies. But this is not a definitive rule
    Overall, your best chance to see the northern lights (without doing a tour) is to stay at an accommodation far away from any light pollution
  • Best hotels to see the Northern lights
    If you want to just get out of bed, when receiving the Northern light alarms and have the best change of seeing them clearly, consider the following hotels:
    Hotel Ranga, with its Observatory Roof - see photos and availability
    Hofsstadir Country Hotel on top of a hillside - see photos and availability
    Hotel Husafell secluded on the Silver Circle - see photos and availability
    Thorsmork Volcano Huts, in the Central highlands, but a Giant Jeep is required to get there... 

Much more details at the end of this article.

Thorsmork Volcano Huts

Thorsmork Volcano Huts under the Northern lights

Where to stay in Iceland for honeymoon / romantic getaway

For me there is nothing better than taking a road trip and exploring the best nature Iceland has to offer.
But if you are looking for a romantic hotel to spend a few nights consider:

Many Icleandic Hotels can be romantic

Many Icelandic Hotels can be romantic...

Most unique accommodations in Iceland

Looking for a very unique place to stay, to change from ordinary travels? Check out these:

Where to stay in Iceland for the Blue Lagoon

The Blue Lagoon is the most famous geothermal seawater pool in Iceland.
The complex offer various spa treatment and the chance to soak in this unique blue water.

You can stay directly at the Silica Hotel at Blue Lagoon, right at the incredible geothermal pool - see photos and availability
or check out all the accommodations around the Blue Lagoon

Blue Lagoon

Blue Lagoon

Where to stay in Iceland in Winter? (October, December, February...)

All my answers above are applicable to Summer and Winter and all the months
Except that the Central Highlands are not accessible and the West Fjords are very difficult to visit.
So:

Iceland Hotel in Winter

Iceland Hotel in Winter

Where to stay in Iceland at Christmas

Christmas is a unique time of the year in Iceland
It last for 26 days with 13 "Santa Clauses", the Yule Lads. Plus the country is covered in white and northern lights are a definite possibility.
The best places to enjoy this magic are:

Where to stay in Iceland for hiking

There are many hiking opportunities around Iceland.
Some of the best towns to base yourself and access many hikes are:

There are also incredible multi-day treks to consider.

Hverfjall rim hike

Hverfjall rim hike

How are the Iceland accommodations - what to expect?

Iceland Hotels, B&Bs and Guesthouses

  • Hotels are like everywhere else... a classic option for Iceland accommodation.
  • B&Bs and Guesthouses are a great way to stay in Iceland. Set up in private homes, they offer personalized service and great exchanges with locals
  • Please note that many guesthouses have shared bathrooms. Please check first if this is a concern for you.

Icelandic Farm Holidays

  • Farm holidays are similar to B&Bs but in Farmhouses often off the beaten track.
  • I allows you to connect more with the culture and traditions of Iceland
Iceland farm accommodation

Rentals in Iceland

If you want a place were you can feel at home, cook and have a base for your travels, renting is a great option.
But they are mostly available in the larger towns for longer stays.

Camping in Iceland

  • Iceland has many campsites around the country offering you cheaper accommodation (over 170) - if you stay quite a while, consider the Camping Card giving you access to a network of campsites.
  • Since 2013, the law has changed and conditions to wild camp are complicated. You must understand ownership of lands. Better to use campsites.
  • If you are interested in Camping, check out the advices by BeMyTravelMuse about Camping the Iceland Ring Road or Aga's Iceland on the budget Guide

And before booking your trip, you might consider reading my article about the best time to go to Iceland depending on what you want to see and experience.

Where to stay in Reykjavik - Accommodations

About Reykjavik

Reykjavik is the capital city of Iceland.
There is lots to see and do. 
This is where you find the highest number of Iceland accommodations from luxury hotels to small guesthouses.
You can stay one night or stay your whole trip and do day tours from there.

Reykjavik Sun Voyager by Jon Gunnar Arnason

Reykjavik Sun Voyager by Jon Gunnar Arnason

Best areas to stay in Reykjavik

  • Midborg (downtown) also known as Reykjavik 101.
    It is the heart tof the city around the cathedral.
    It filled with restaurants, cafes and bars
    From here, it is very easy to explore the city on foot.
  • Vesturbær
    West of Midborg.
    The neighboorhood is getting trendier and trendier.
    It also give easy access to all Reykjavik attractions, while being cheaper.
  • Hlidar
    Younger area, mostly residential where you can find hostels
    This is also where you can find hotels near main roads, allowing you to get easily out of the city
  • Laugardalur
    Residential area, further away from the city center.
    Preferred area by families
Where to stay in Reykjavik Iceland

Where to stay in Reykjavik, Iceland

My favorite accommodations in Reykjavik

My favorite hotels in Reykjavik center are:

Reykjavik Accommodation - Iceland Accommodation B&B

Reykjavik Accommodation: Reykjavik Treasure

Otherwise, you can consider these options depending on what you are looking for:

Or read my article dedicated to where to stay in Reykjavik

Where to stay on the Golden Circle - Accommodations

About the Golden Circle

The Golden Circle Iceland is a great road North of Reykjavik, which includes some of the top attractions in Iceland such as :

Gullfoss

Gullfoss

Best areas to stay on the Golden Circle

Depending on your interest you could choose:

  • To stay near Haukadalur to enjoy a sunrise with the geyser - see options
  • To stay in Laugarvatn, where you can find a few accommodations by the lake and its hot springs - check out options
  • To stay in Fludir, a little out of the way, to be able to soak in the hot waters of the Secret Lagoon at the end of the day - check out best rated accommodations
  • Otherwise you can also find a large choice of accommodations in Selfoss, a town on the Ring Road that connects the Golden Circle with the South Coast - see best rated accommodations
Where to stay Golden Circle Iceland

Where to stay on the Golden Circle in Iceland

Best Golden Circle Accommodations

I stayed at two different accommodations in the area:

  • I had a really great stay at the Geysir Cottages (part of Hotel Geysir).  The location was perfect to go check out the eruption of the Strokkur geyser when no big tourist busses were around - see photos and availability
  • I stayed at the Icelandair Hotel in Fludir which was really nice, modern and clean - see photos and availability
Golden Circle Accommodation - Geyser cottage

Golden Circle Accommodation

Otherwise consider :

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Where to stay in South Iceland 

About the South Coast

The West of the South coast is one of the most popular areas in Iceland as it is home to :

  • Impressive waterfalls such as Seljalandsfoss and Skogafoss
  • Black sand beaches such as Reynisfjara
  • Glaciers
  • Glacier lagoons such as Jokulsarlon
  • Icebergs on black sand at Diamond Beach
  • ...
Skogafoss

Skogafoss

Best areas to stay in South Iceland

Between Selfoss and Höfn, there is 5h of driving.

The main accommodation hub on the South coast of Iceland are:

And you can also find many accommodations in Nature along the Ring road, including some not far from Diamond beach and Jokulsarlon

Where to stay in South Iceland

Where to stay in South Iceland

Where to stay in Vik - Accommodations

I have stayed at 2 different accommodations around Vik:

Otherwise check out the best rated accommodations in Vik

Edda Vik

Edda Vik

Hotel Katla Hofdabrekka

Hotel Katla Hofdabrekka

Where to stay near Diamond beach - Jokulsarlon

There are no accommodations at Diamond beach or Jokulsarlon
But you can find a few hotels or guesthouses in the area, and these will allow you to get there for sunset, sunrise or the northern lights faster 

or read my article about where to stay near Jokulsarlon.

Diamond beach

Diamond beach

Where to stay in Höfn - Accommodations

I have stayed at Höfn Berjaya. Right by the harbor it was clean and practical - see more photos and availability

Otherwise, check out the best rated accommodations in Höfn

Hotel Edda Höfn

Hotel Edda Höfn

More ideas and info in my article about where to stay in South Iceland.

Where to stay in the Snaefellsnes Peninsula

About the Snaefellsnes Peninsula

The Snaefellsnes peninsula is often considered a mini Iceland.
Driving around you can discover: fjords, glacier, lava fields and cliffs, volcanic craters, lava cave, black sand beaches...
Its main attraction is the mountain of Kirkjufell and its waterfalls.

Kirkjufell

Kirkjufell

Best areas to stay on the Snaefellsnes Peninsula

There are various options you can consider:

Where to stay Snaefellsnes Peninsula map

Where to stay on the Snaefellsnes Peninsula - map

Snaefellsnes accommodations

I had the opportunity to test 3 accommodations in the area:

  • Framnes in Grundarfjörður: The location was great, not far from the famous Kirkjufellsfoss, allowing us to get there at sunset and sunrise. In the morning, it was even better with a beautiful rainbow over Kirkjufell - Check out  photos and availability
  • The Old Post Office Guesthouse with shared bathroom (also in Grundarfjordur). It was comfortable, clean and very well located - Check out photos and availability
  • Hotel Hamar in Borgarnes with great sauna and open views - check out photos and availability
View from Hotel Hamar in Winter

View from Hotel Hamar in Winter

Otherwise consider:

More ideas and info in my article about where to stay on Snaefellsnes.

Where to stay in North Iceland - Akureyri and more

About Northern Iceland

North Iceland is less visited than the South. Yet it also offer incredible landscapes, especially around Lake Myvatn. For example you could see:

  • the powerful Dettifoss waterfall
  • the giant lava formation in Dimmuborgir
  • Pseudocraters on a lake
  • the elegant Godafoss waterfalls
  • Lava fields still fuming
  • ...
Myvatn pseudocrater

Myvatn pseudocrater

Best areas to stay in North Iceland

Where to stay in North Iceland map

Where to stay in North Iceland - Map

Where to stay in Akureyri - Accommodations

Consider:

IcelandAir Hotel Akureyri

 Hotel Berjaya Akureyri

But you can also consider:

Other North Iceland Accommodations

I stayed at:

IcelandAir Hotel Akureyri

Dimmuborgir Guesthouse

But you can also consider:

More ideas and info in my article about where to stay in North Iceland.

Where to stay near Iceland's airport - Keflavik Accommodation

About the airport

The Internationl Airport is not in Reykjavik.
It is located in Keflavik, in the Reykjanes peninsula.
It is a 45min drive from Reykjavik.

Where to stay in Keflavik - accommodations

If you arrive late in the everning or leave on an early flight, there is a large choice of accommodations very close to the airport
Considering I had an early flight I stayed at the Nupan Deux Keflavik for a short commute to the airport - see photos and availability

For options, check out the Best Rated accommodations in Keflavik across all budgets

Iceland Air

Where to stay in the West fjords of Iceland

Isafjordur is the main town in the West fjords where you will find most accommodations - check accommodations in the region
However the region is vast and driving around takes a lot of time, so you may not want to drive back to Isafjordur every day. You can find other accommodations spread around the region.

Where to stay in Iceland for Northern lights

Conditions to see the auroras

To be able to see the Northern lights you need

  • A very dark night (so don't travel in May, June, July, as they have the shortest nights)
  • A cloud-free sky
  • High intensity of solar eruptions

Northern Iceland is generally considered better to see the Northern light as it has clearer skies. But this is not a definitive rule
Overall, your best chance to see the northern lights (without doing a tour) is to stay at an accommodation far away from any light pollution.

Learn more in my Iceland Aurora article.

Where to stay if booking a northern light tour

If staying in one place, you are limiting your chances of having a clear sky.
This is why you can book tours, with expert drivers that will try to find the best areas for you to see them.
Those tours are only available from the 2 main towns:

Where to stay near great locations for Northern lights

Or you might want to stay close to a great location for your photography.
Great Icelandic background to photograph the Northern lights include:

Best Northern light hotels to see without getting out

Or you can choose to stay in a Hotel that is away from any town and source of light and have the potential to be a good place to see the northern lights.
Normally, you can opt to have a wake up call by the front desk telling you when they are active.
You just have to get out of bed, put on a coat and get outside!

For example you can choose:

What part of Iceland is best to stay to explore from one place? 

Vik

Vik

As I wrote before, I think Iceland is best visited on a road trip.
However, I do understand the preference to stay in one place and not change accommodation all the time.
The best hubs around Iceland where you can enjoy many day trips and lots to see around are:

In those towns, you can see for a few days up to a week!

Want to see more of the best Iceland has to offer?

Planning a trip to Iceland?

Check out my travel guide to help you plan:

Plan your dream road trip in Iceland

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  • 8 maps to plan your itinerary easily
  • 100+ pre-selected locations 
  • Tips to make the most of your time
  • 130+ original photos to get inspired
  • GPS coordinates for easy navigation

LEARN MORE

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Iceland road trip Journal

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