Hands Down, This Is Where To Stay In Reykjavik

If you are searching for where to stay in Reykjavik, Iceland, you have come to the right place! We totally love Iceland and have been countless times. Reykjavik is one of our favorite cities to visit, and as a result, we have stayed in many different areas in the city!

There are truly so many things to do in Reykjavik! It is a city that is full of culture, natural beauty, and history. As the capital and largest city of Iceland, Reykjavik has plenty to offer in terms of views, food, and immersive culture.

Downtown is great for shopping and nightlife, and you can also swing by the Maritime Museum in between ice skating dates (if you’re visiting in the winter of course!). With plenty of options to do, however, you’ll want to know where to stay!

You can even use the capital as a base and take one of the many fabulous Day Trips From Reykjavik. If you are asking where is the best area to stay in Reykjavik, you should know it depends largely on what you want out of your accommodation.

When planning where to stay in Reykjavik, we’ve got you covered. Below we have listed some of the best places to stay in Reykjavik by area. Read ahead and find out what neighborhood is best for you and your adventure to one of the most spectacular places on Earth!

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Hands Down, This Is Where To Stay In Reykjavik

Hlíðar/105

Hlíðar is a lively and culturally diverse district in Reykjavik! Home to quirky must-sees, such as the Icelandic Phallological Museum, and the Reykjavik Art Museum Kjarvalsstaðir, there is so much to do. Between looking at modern Icelandic paintings and structures, to visiting Klambratún park, there are countless options for adventure in this district. 

But better yet? Hlíðar is great for those who are traveling on a budget, and, frankly, who doesn’t want to save some money with accommodations?! With great hostels, hotels, and apartments for your visit, this district is well known for its quiet, tree-lined open spaces, casual dining spots, and fun atmosphere.

From visiting museums to eating at some Thai favorite locations and saving money, this may be the location for you when looking for where to stay in Reykjavik!

Best Places to Stay in Hlíðar/105

Affordable: Hotel Orkin

The Hotel Orkin is one of the best budget places to stay in Reykjavik. With rooms fitting anywhere from two to five people this is a great option for couples and families. Each room has a TV and a private bathroom.

There is free Wifi and coffee and tea served 24-hours a day, this is great when you need a caffeine boost as you chase the midnight sun.

Public areas include a lounge room where breakfast is served, a computer station, a children’s playroom, and a ping-pong table. The hotel is also within walking distance of the city center.

Check Rates: Booking.com

Mid-Range: Centrally Located Apartment

This centrally located apartment in the Hlíðar neighborhood is in a great location. You will be near stores and bakeries as well as the Pelan museum and walking trails. There are two beds and a futon in the living room if you need another.

When you are not out looking for the Northern Lights, you can relax with Netflix or study the giant wall map to find your next travel destination. There is plenty of storage and a full kitchen ready for cooking.

Check Rates: Vrbo.com

Mid-Range: Fosshotel Lind

This hotel is a 1-minute walk from the bus terminal and the Main Street of the neighborhood! With free private parking and rooms that include a flat-screen TV, the best part of this hotel are the distant views of the Hallgrimskyrkja church!

But better yet, a breakfast buffet is served every morning and the Sundhollin bath is only 1,000 feet away. This is a fantastic location for not a bad price! Make sure to check out the Fosshotel Lind when considering where to stay in Reykjavik. 

Check rates: Booking.com

Luxury: Tomas Luxury Apartments

The Tomas Luxury Apartment is a beautiful space for up to six travelers. Found on Laugavegur street, it is in a great location for shopping and dining out. The balcony allows you to sit outside and watch the crowds below.

With big windows, the living area is light and area. Modern furniture, comfortable beds, and even provided robes and slippers will make you feel as if you are staying in the lap of luxury.

The kitchen is equipped for cooking and a washer and dryer will give you a place to do laundry. Another plus is the free, private parking.

Check Rates: Vrbo.com

Luxury: Skuggi Hotel 

Skuggi Hotel offers great accommodation as it is only 450 feet from Laugavegur shopping street, meaning you are close to the heart of the district! With an on-site bar, free underground parking, modern and spacious rooms, and breakfast on site this hotel also offers a bike and car hire if this is of interest to you.

Talk about a steal! Being close to the appeals of the district is always a plus, especially when you are in one of the best luxury hotels in Reykjavik with fantastic comfortable beds! Check this place out when weighing your options of where to stay in Reykjavik!

Check rates: Booking.com

City Center/101/ Miðborg

As the beating heart of downtown, the city center is one of the best places to stay in Reykjavik as it is home to several attractions and is populated with fantastic restaurants and bars. It is an easily walkable neighborhood home to historic landmarks and more. 

As this area draws tourists in with its brightly colored streets, fun nightlife, and more, it is also important to know that when you are staying in Reykjavik, this is probably where you are going to spend most of your time!

You may want to check out the Church of Hallgrimur here, or even the National Museum of Iceland! Aside from this, there are other highlights to stop and see, such as the Volcano House and the Museum of Photography.

This district is perfect for any traveler, but we highly recommend it if you are visiting Iceland for the first time! Also, if you are considering taking on multiple walking tours, this is the place to do it! In fact, you may want to check out our best tours in Iceland to see what we recommend!

Whether you decide to stay in the city center and use it as a home base or just want to explore this wonderful location, you cannot go wrong. Miðborg is the best area to stay in Reykjavik! 

Best Places to Stay in City Center/101/ Miðborg

Affordable: Hotel Klettur

Though there are a number of decent, affordable hostel options in downtown Reykjavik (Reykjavik Downtown Hostel, Reykjavik Loft Hostel, and Kex Hostel Reykjavik to name a few), Hotel Klettur is a nicer hotel with an affordable option.

Though many of Hotel Klettur’s rooms are pricier, they offer a budget twin room option for those looking to save a little money. Hotel staff is available to help you book tours and plan activities, and a continental breakfast is included each day in your room price. The hotel is located right next to the main Laugavegur shopping street and gives you easy access to great restaurants and cafes as well.

Check rates: Booking.com

Affordable: House of the Snowbird

The red and white House of the Snowbird is as adorable on the inside as it is on the outside. This is where to stay in downtown Reykjavik for couples who want a cute, little place with a homey feel.

A group of artists took this historic building and upgraded it with artistic and personal touches. Wood and brick accents against the white paint make this place pop. You will feel right at home with the comfy furnishings.

The House of the Snowbird is in the heart of the old town near many restaurants, cafes, museums, and art galleries. It is a wonderful place to walk around and become acquainted with Reykjavik.

Check Rates: Vrbo.com

Mid-Range: Fosshotel Reykjavik

Fosshotel Reykjavik is a modern-style hotel located just outside the center of the city, but still close enough to all the action. The hotel is roughly one mile from both the Harpa Concert Hall and Hallgrimskirkja church.

It’s also right next to the number 12 bus stop which is extremely convenient for getting picked up for tours.

The hotel offers standard double rooms at a mid-range price, but if you’re looking for a tower view room or suite, family room, or deluxe double room, the prices are much higher. With a stylish design, great views of the city, accommodating staff, and comfortable rooms, the Fosshotel Reykjavik is where to stay in Reykjavik when planning a trip to the capital.

Check rates: Booking.com

Luxury: B14 – Downtown Luxury

The B14 – Downtown Luxury Apartment is one of the best accommodations in Reykjavik if you want to soak up the city’s lively atmosphere and culture. If you are wanting to know what is the main area of Reykjavik, book a stay here and find out!

You will be nestled among great restaurants, cafes, shops, bars, and grocery stores. If nightlife is something you are into, this is a great place to experience what Iceland has to offer.

That said, it is not the quietest neighborhood, but when you come in for the night, you can unwind on the big, comfy couch in front of a fireplace. If you want to save money by cooking your own meals, you will love the full, modern kitchen.

When you book here, you get a private bedroom and bathroom, but the dining area and kitchen are shared with the other apartments on your floor.

Check Rates: Vrbo.com

Luxury: Hotel Borg

If you’re looking for luxury, you’ll find it in this beautiful art deco-style hotel in the heart of Reykjavik. Hotel Borg is right next to Althingi, the Icelandic parliament, and the Reykjavik Cathedral.

It is within walking distance from the Reykjavik Art Museum, the Settlement Exhibition, and of course the famous, prominent Hallgrimskirkja church. The hotel is also surrounded by an endless selection of excellent restaurants and cafes.

The staff members of the hotel are incredibly friendly and are more than happy to suggest activities for you or answer any questions. From Hotel Borg you can experience the culture, shopping, and food that Reykjavik has to offer while relaxing in luxury in between.

Check rates: Booking.com

Árbær

We aren’t going to lie, Árbær is our TOP PICK for where to stay in Reykjavik. Located in the eastern part of the city, this neighborhood is well known for its natural surroundings and pristine nature as the Elliðaárdalur valley is close by and the neighborhood has a beautiful river flowing through its heart! 

The core residential areas of this district were built in the 1960s-1970s and the area is safe for travelers. But better yet? This district is close to the highway!

On the outskirts of the city, this is a prime location for those who have access to a car and want to be close to the Ring Road for day trips. Staying here will also give you good access to the Golden Circle and other options that are nearby the South Coast.

This is our favorite place to stay, and thus we recommend it as the best neighborhood to stay in Reykjavik. And if you are staying here while you have access to a car make sure to check out our article on our Road Trip Itinerary! 

Best Places to Stay in in Árbær

Affordable: Hotel Kanslarinn 

One of the best things about staying in Árbær is the Ring Road access for day trips, and lucky for you, the Hotel Kanslarinn is located right in the heart of it! This is one of the best budget hotels in Reykjavik!

With free wifi, a restaurant with a bar, close access to roads and cities, this hotel is one of the best places to stay in Reykjavik. Rooms have private bathrooms, a desk, and a fridge! Facilities include a daily breakfast buffet, a GORGEOUS communal garden, and surrounding property with beautiful hiking trails.

Check Rates: Booking.com

Mid-Range: Stracta Hotel Hella

Stracta Hotel Hella is a modern hotel that is located along the Golden Circle, and its prime location is fantastic, as this is truly one of the best areas to stay in Reykjavik. With a minimalistic yet stylistic vibe, this hotel offers self-catering apartments and rooms, so you get to book what feels perfect for you and your traveling party!

Hiking trails and nature surround this area and national parks are close by. Many people love to stay at this hotel because of its easy access in location and the warmth and comfort of the rooms!

Check Rates: Booking.com

Luxury: Hotel Ranga 

Known for its stargazing observatory and luxury, the Hotel Ragna is a more remote location that offers outdoor hot tubs, free Wifi, and more. Each room is individually decorated and many have access to spa baths or balconies.

Featuring an on-site restaurant famous for its local cuisine, this is a gorgeous place to stay in one of the best areas to stay in Reykjavik. It truly encompasses luxury!

This is where to stay in Reykjavik to see the Northern Lights. Just imagine being cozy in your room while watching the lights dance across the night sky!

Check Rates: Booking.com

Laugardalur/104

Laugardalur is a largely residential area of Reykjavik, but that doesn’t mean it isn’t one of the best places to stay in Reykjavik! Close to the bustling downtown area, this neighborhood is perfect if you are looking to travel with family–especially for those of you traveling with young children!

Safe and filled to the brim with adventure, you can enjoy some famous locations such as the Reykjavik Zoo and entertainment parks, which include the largest swimming pool in Iceland! 

If you are visiting during the appropriate season as well, you can also expect to go ice skating, camping, or visit the valley botanical garden in Laugardalur too!

This charming area is the perfect spot because after you enjoy a day filled with adventure, you can also enjoy a wonderful meal in the cozy cafes! But make sure you don’t miss the thermal pools at the Blue Lagoon if you decide to stay here–and we highly recommend it! Laugardalur is one of the best places to stay in Reykjavik! 

Best Places to Stay in Laugardalur/104

Affordable: Nordurey Hotel City Garden

The Nordurey Hotel City Garden is one of the best hotels to stay in Reykjavik if you want to be out of the noise of the city center. Couples or a group can stay here with rooms fitting anywhere from two to six people.

Each room has free wifi, a desk to work at, a flat-screen TV, and a hairdryer. Even though this hotel is in a more quiet area, it is only a mile or two away from many Reykjavik attractions so you do not need to worry about being too far from the action.

Check Rates: Booking.com

Affordable: Cosy House in 104 Reykjavik

If you are looking for one of the best budget places to stay in Reykjavik with just what you need and no-frills, consider the Cosy House in 104 Reykjavik. This 400-square-foot house is perfect for a solo traveler or couple who would rather spend money on experiences than a place to sleep.

While it is on the cheap side, it still has everything you need to be comfortable. There is a full kitchen, a flat-screen TV, wifi, and a comfortable sofa and bed. It is on a quiet street, but not far from downtown.

Check Rates: Vrbo.com

Mid-Range: Cosy Harbour Apartment

The Cosy Harbour Apartment is one of the best accommodations in Reykjavik for families. There is a queen-sized bed and two twin beds. If you are traveling with a baby, there is also a crib and high chair.

The inside is super modern with antique touches. You will feel right at home in this ground-floor apartment.

There is a full kitchen for cooking, a washer and dryer for laundry, and a flat-screen TV for entertainment. You will also have great mountain and garden views.

Check Rates: Booking.com

Luxury: Luxurious, Large Central Reykjavík Apt.

If you need Reykjavik lodging for the whole family, consider this Luxurious, Large Central Reykjavík Apartment. There are three bedrooms with space for up to six travelers. The rooms and open and bright with modern furnishings that add to the luxury feel.

You will be only a short walk from the Laugardalur Botanical Gardens, thermal pools, stores, and restaurants. There are also bus stops nearby or private parking if needed.

The Smart TV with Netflix and fast wifi will keep you entertained and connected. The full kitchen complete with top-of-the-line appliances will be a chef’s dream. The is also a ton of closet space if you have a lot of luggage.

Check Rates: Vrbo.com

Luxury: Cozy 60’s Villa in Reykjavik

This Cozy 60’s Villa in Reykjavik will send you back in time! If you are looking for one of the most unique and eclectic places to stay in Reykjavik, this is the one for you!

With four bedrooms, there is space for six people to stay in this funky home. There are three balconies and a great open floor plan so you wouldn’t feel confined. The kitchen is fully equipped with everything you need to cook and also has amazing views of the mountains.

The house is right next to a bus stop so you have easy access to the rest of the city.

Check Rates: Booking.com

Vesturbær

Vesturbær is equal parts traditional and trendy. This district is definitely unique as it encompasses the Old West Side complete with classic Icelandic architecture, souvenir shops, and more! But there is also a side to this area that has lively bars, clubs, and restaurants.

If you are looking for the best hotel to stay in Reykjavik, this is a good place to start! Although mostly residential, there are some commercial activities in the area that can make for a great place to stay! 

This district is home to the University of Iceland and is located close to a harbor. With easy access to this harborfront, whale-watching tours depart every hour, making it a great day trip for any visitor!

This unique town has plenty to offer: from great nightlife to fantastic day trips and informative museums, this is one of the best places to stay in Reykjavik!

Best Places to Stay in Vesturbær

Affordable: Refurinn Reykjavik Guesthouse

The Refurinn Reykjavik Guesthouse is in a great location and is within walking distance of many Reykjavik attractions. If you want a place to stay that feels more like a home than a hotel, book here.

The guesthouse is set up similarly to a hostel. While you will have a private bedroom, the bathrooms and kitchen are shared. Everything is kept very clean and well-stocked. You will have the chance to meet fellow travelers when you stay here.

Wifi, luggage storage, and free parking are available.

Check Rates: Booking.com

Mid-Range: Harbor Apartments

Sometimes one of the best places to stay in Reykjavik is apartments and not hostels or hotels! In Vesturbær in particular, there are TONS of people who rent out their apartments or villas for tourists.

One that guests seem to love is the Harbor Apartment with Ocean and Mountain Views. The apartments rented out in this complex feature a patio, a fully equipped kitchen, a seating area, a private bathroom, and comfortable rooms.

The accommodations and beautiful views from terraces, patios, and balconies really help catch the eye of tourists. These apartments are spacious, located in the heart of everything, and are well equipped to handle you and your adventures. Spread out, enjoy the space, and the views of course! 

Check Rates: Booking.com

Luxury: Ocean View Luxury Apartment in Central Reykjavik

If you are looking for a gorgeous, modern place to stay near the water, then this Ocean View Luxury Apartment might be for you! Up to four people can stay here so you can easily split the price between two couples.

The apartment has a large living area, a sleek and modern, full kitchen, two comfy bedrooms, and two balconies with great views of the ocean. There is also underground parking if you rent a car. The city center is about a fifteen-minute walk away.

Check Rates: Vrbo.com

Luxury: Luxurious Private Villas

If you’re interested in spending a bit more money and having a whole place to yourself, consider splurging and booking private villas over hotel or hostel rooms! The Luxurious Private Villa in Vesturbær comes fully equipped to fit you and your travel group.

With five bedrooms, a kitchen, two bathrooms, and more, this well decorated, spacious, and private villa may be where to stay in Reykjavik due to its fantastic location to the neighborhoods and cities, and the fact that it is private and spacious. It’s like staying at home, but while on vacation!

With free Wifi, private parking cable channels, and being surrounded by friendly locals, this may be where you want to stay! 

Check Rates: Booking.com

Seltjarnarnes

Also known as the 170 neighborhoods, this small neighborhood is located on the tip of a peninsula, and is well known by tourists for its location on the Atlantic Ocean.

Because of its prime location, this area has fantastic coastal trails, and it also offers great insight into the culture of the area with outdoor artworks by local artists and more. Better yet? This is the prime location for seeing the Northern Lights. 

Although this location is not a part of the 10 districts of Reykjavik, it is close and is known as being a haven for tourists interested in nature and photography.

Aside from visiting the natural phenomena, you can also visit museums, lighthouses, and more. If you and your traveling crew are looking to see the Northern Lights from your hotel and enjoy coastal walking trails, this is one of the best places to stay in Reykjavik! 

Best Places to Stay in Seltjarnarnes

Affordable: Studio Apartment near Wildlife

If you are looking for one of the most budget-friendly places to stay in Reykjavik, book this Studio Apartment. This 344 square-foot home is ideal for solo travelers or couples who want to save money.

The hosts are super friendly and accommodating, helping to make this stay great. The double bed, full kitchen, and big shower make this place comfortable and perfect for the price.

This is a quiet neighborhood where you can spot the Northern Lights if the conditions are right. It is close to a bus stop so it is easy to get around.

Check Rates: Vrbo.com

Affordable: Blue House B&B

The Blue House B&B is a great choice on the Seltjarnarnes Peninsula. There are three different houses all with varying room sizes that can fit anywhere from two to twelve people. Splitting the price between your travel buddies helps to keep this property affordable.

Some rooms have more of a hostel feel with shared bathrooms, while others are completely private. You will enjoy free wifi, TVs with Netflix, and a self-service continental breakfast (for a fee).

This is a beautiful area of the city with easy parking. It is a short walk to the beach and a public, outdoor, geothermal pool.

Check Rates: Booking.com

Mid-Range: Icelandair Hotel Reykjavik Marina

All rooms at the Icelandair Hotel Reykjavik Marina offer private bathrooms and either city or marina views. While some rooms have a balcony, this hotel ensures that every time you book here, you are welcomed with a spacious room that includes a TV, free Wifi access, a sofa, and more.

Guests can work out at the gym here or relax by the fireplace in the lobby, and there is a cinema you can curl up in and watch films on! Better yet, you can also stop at the restaurant for a nice dinner! With all there is to offer at this hotel, you might not want to leave it, but don’t worry, if you decide to go out, this place is located perfectly for adventure! This is where to stay in Reykjavik (maybe forever!). 

Check Rates: Booking.com

Luxury: Modern and Spacious House in Seltjarnarnes

If you need a large accommodation in Reykjavik for a lot of people, then the Modern and Spacious House in Seltjarnarnes is a great option. There are four beds and enough space to fit seven people. If you are traveling with a family or group of friends, this is a great place to stay.

Inside, you will find open spaces, flat-screen TVs, a full kitchen, a washer, and a dryer. With live plants, artwork, and books on the shelves, it feels like a lived-in home. The home extends outside with a terrace, patio, balcony, BBQ, and free, private parking.

Check Rates: Booking.com

And there you have it– where to stay in Reykjavik! Whether you are using a district as a hub or planning to enjoy the area while spending time there, there is no doubt that Iceland is the gorgeous land of fire and ice. You will love stating in Reykjavik!

And if you’re interested in planning more tours, day trips, road trips, or more, make sure to check out our other posts on Iceland to ensure that your trip is full of adventure– especially if you’re traveling outside of the city! Take a look at our 10 Prettiest Cities and Towns article or even look at our larger breakdown of Where to Stay in Iceland!