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Where to Stay in Iceland – 8 TOP Spots for a 2024 Trip!

A majestic waterfall cascades down a lush, moss-covered cliff into a serene pool below, with a vivid sunset illuminating the expansive green landscape in IcelandA majestic waterfall cascades down a lush, moss-covered cliff into a serene pool below, with a vivid sunset illuminating the expansive green landscape in Iceland

Iceland is a magical place – you can see everything from stunning green landscapes and crystal clear lakes to glaciers and active volcanoes. Choosing just one place to visit in the country is almost an impossible task, so you are probably looking for resources on where to stay in Iceland and how to make the most of everything the island has to offer. 

A few years ago, I went on a road trip to Iceland, and now this is my favorite country in the whole world! 

I, like most people, took the Ring Road – and I can tell you about all the best stops along the way. Starting off in Reykjavik, the capital, and stopping at 7 additional destinations, I will cover all the must-visit stops on your trip, each just a couple of hours’ drive from the previous one. 

I want to help you plan the perfect Iceland itinerary, so instead of just listing the top things to see when you visit Iceland, I also provide recommendations for where to stay. For each of the areas featured in this post, I recommend luxury, mid-range, budget, and apartment accommodations so all types of travelers will find something to their liking. 

Read this post to be able to find and book your perfect accommodation in Iceland fast. I went through almost all the accommodation options and handpicked the very best ones. And don’t worry – even though Iceland is not a cheap destination, I did manage to find some affordable and well-rated options! 

Whether you decide to stop at all the places I recommend or you choose to skip some and move on, be sure to make your reservations in advance. Iceland is extremely popular, and the best places sell out super fast, or the prices grow higher as the dates approach.

If you are in a hurry

No time to check everything out? Here are some quick links to the best hotels in Reykjavik, the ultimate place to start your Iceland adventure:

Here’s an Iceland map with and areas I will highlight in this post, so you can visualize the best places to stay in Iceland:

1. Reykjavik – your first stop in Iceland

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

You’ll most likely at least pass through Iceland’s capital city, Reykjavik, once you’ve landed at Keflavik International Airport, making it the perfect place to stay at the start of your adventures in Iceland.

The city itself is a must-see if it’s your first time visiting! With Mount Esja as the backdrop, enjoy the colorful buildings brightening up the streets as you stroll the shops or enjoy a delicious meal in any of the world-class restaurants during your stay in Reykjavik. 

Don’t miss the chance to see the view of the colorful city center from the top of a modern cathedral, Hallgrimskirkja Church Tower (map). If you don’t have time to attend an event, you should at least stop by Harpa Concert Hall to admire the architecture, then go on to snap a photo of the Sun Voyager sculpture (map). 

As for museums, I’d single out the National Museum of Iceland (to learn the country’s past) and The Icelandic Phallological Museum (collection of phallic specimens from various mammals). 

The fun doesn’t end at night, as Reykjavik locals know how to have a good time, living up to their vibrant nightlife. Plus, you don’t even have to leave Reykjavik if you want to see the Northern Lights (although I recommend you do!).

There are several hotspots with less light pollution in the city including the Grótta Lighthouse in the most Northwestern point where you have a chance of spotting the aurora borealis.

I recommend you stay in the capital city of Reykjavik at the start of your trip to dive right into the Icelandic culture and city life. There are plenty of accommodation options, everything from high-end boutique hotels to cheap hostels, but most hotels are fully booked months in advance. 

Below, you’ll find my recommendations for the best hotels for each budget, but if you are looking for even more options, check out my full guide on the best places to stay in Reykjavik

A collage of three hotel photos to stay in Iceland: an opulent lobby with arched windows and chic leather furniture, a cozy bedroom featuring a plush bed with wooden accents and a pop of red from a sleek sofa, and a spacious living area with a comfy tan sofa and modern kitchenette in the background.A collage of three hotel photos to stay in Iceland: an opulent lobby with arched windows and chic leather furniture, a cozy bedroom featuring a plush bed with wooden accents and a pop of red from a sleek sofa, and a spacious living area with a comfy tan sofa and modern kitchenette in the background.

The Reykjavik EDITION ($$$)

As one of the most luxurious hotels in Reykjavik, The Reykjavik EDITION offers facilities like a fitness room and a spa and wellness center, as well as amenities like room service, currency exchange, and a 24/7 front desk. Guests can enjoy a continental breakfast and benefit from onsite private parking.

Hotel Borg ($$$)

Staying at the Hotel Borg means you’ll have access to a great in-house spa, with a sauna, hot tub, and steam room. Each of the rooms is brightly decorated and features quality beds and wooden furniture, while the hotel staff can help you with car rentals and tour arrangements.

House of the Snowbird ($$)

Situated in a historic house and offering fully equipped apartments, House of the Snowbird is within walking distance of the Old Town and provides free Wi-Fi and parking on site.

ION City Hotel ($$)

The ION Hotel is centrally located on the Laugavegur shopping street, and it features an onsite restaurant and a fitness center. This is one of the best Reykjavik hotels if you’re traveling with family; the hotel has family rooms, and the hotel provides baby cots free of charge, and extra beds for a small additional fee.

Baron’s Hostel ($)

If you’re on a budget, there’s no better place to stay in Reykjavik than Baron’s Hostel. Here, you can choose between private rooms with access to shared bathrooms and bunk beds in dormitories, and you can also enjoy the shared lounge and the garden.

Apartments Reykjavik

This recently renovated apartment offers various comforts such as access to a furnished private patio and barbecue facilities, a fully furnished kitchen, a cozy seating area, a private bathroom, and a separate bedroom with a double bed – perfect for couples.

Things to do in Reykjavik 

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 cathedralA 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
  • Spend some time exploring the Laugavegur shopping street
  • Visit various museums like the National Museum of Iceland
  • Snap a picture of the Hallgrimskirkja Church
  • Check out the interesting sculpture Sun Voyager by the sea. 
  • Head to Seltjarnarnes to try and see the northern lights
  • Enjoy some fine dining at Perlan, a glass-domed restaurant. 

Looking for more? Check out the best things to do in Reykjavik on a budget!

2. The Golden Circle (around Selfoss) – Iceland’s most popular sights

Person in a red hat sitting on a rocky outcrop, gazing at a majestic waterfall in a serene landscape, with mist rising from the turbulent water belowPerson in a red hat sitting on a rocky outcrop, gazing at a majestic waterfall in a serene landscape, with mist rising from the turbulent water below

The Golden Circle is a famous tourist route on the coast of South Iceland and a road trip you shouldn’t miss regardless of how much time you have in Iceland! Imagine picturesque landscapes, glacial rivers, beaches with black sand, and horse farms – you’ll clearly see this country’s vast richness of nature.

This 300-kilometer (190-mile) expedition will take you past three main attractions: Þingvellir (Thingvellir) National Park, Geysir geothermal region in the Haukadalur Valley, and Gullfoss Waterfall (map). Other noteworthy sights in the region include the volcanic crater Kerið and Skálholt, a historic bishop’s see. 

You can do the Golden Circle as a guided tour – in this case you will probably stay overnight in Reykjavik. But if you are doing a road trip around the island, renting a car is a much better option (not to mention the flexibility you get!)! 

There are a lot of accommodation options around the Golden Circle – look anywhere between Selfoss and Gullfoss – there are SO many options on that route. My first choice would be Selfoss, but Hella and Hveragerdi are also amazing spots for your stay. 

I have chosen the best Iceland accommodation overall in this region for different budgets below. If you’re continuing your road trip on the Ring Road, this will be your first stop for the night after Reykjavik and you’ll have plenty of time to stop and check out the incredible scenery of Southern Iceland. 

For all the details, make sure to read this post for all the must-visit places on the Southern Coast of Iceland, where I describe things to visit step-by-step. 

Golden Circle hotel experience montage with a bedroom featuring sunset views over a tranquil bay, a welcoming living area with classic furnishings, and the hotel exterior with horses grazing out frontGolden Circle hotel experience montage with a bedroom featuring sunset views over a tranquil bay, a welcoming living area with classic furnishings, and the hotel exterior with horses grazing out front

360 Hotel & Thermal Baths ($$$)

One of the ultimate four-star hotels on the South Coast, with a relaxing lounge featuring an open fireplace and a spa that has a pool with warm geothermal water. A very good buffet breakfast is included in the price, and you can also dine at the hotel restaurant, which serves local cuisine.

Guesthouse Bitra B&B ($$)

One of the best guest houses in the area, this family-run property offers cozy rooms with either private bathrooms or access to shared bathrooms. The rooms provide views of Mount Hekla or the surrounding countryside and guests can enjoy a delicious breakfast. You can even see the lights from the hotel during the Northern Lights season.

Stracta Hotel ($$)

During my explorations of Iceland, I stayed in this hotel in Hella and I was very happy with the service. It’s a very modern hotel with great amenities, and I think you get excellent value for your money. You can choose between apartments and rooms, some of which even have a private hot tub, and you park at the property, free of charge.

South Central Guesthouse ($)

This budget-friendly guesthouse offers home-style accommodations. While staying here, you get access to a shared kitchen, a sun terrace, and barbecue facilities. Guests can also benefit from free high-speed Wi-Fi and free parking.

Bella Apartments & Rooms

At this accommodation, you can rent rooms as well as self-catering apartments. All units have a flat-screen TV, a desk, a seating area, and private bathrooms, while the apartments also feature a full kitchen and a dining area.

Things to do in Golden Circle

  • Marvel the Strokkur Geysir that shoots 40 meters (131 feet) high
  • Pay a visit to the Gullfoss Waterfall
  • Check out the Kerið crater
  • Visit Iceland’s first National Park and a UNESCO World Heritage Site, Thingvellir National Park
  • Stop by the historic site Skálholt

3. South Iceland (Vik and around) – the famous black sand beaches

A quaint, white church with a red roof stands amidst a vibrant field of purple lupine flowers, with rugged mountains under a dramatic cloudy sky in the Icelandic countryside.A quaint, white church with a red roof stands amidst a vibrant field of purple lupine flowers, with rugged mountains under a dramatic cloudy sky in the Icelandic countryside.

People who don’t have enough time to explore the entire country usually opt to visit Iceland’s South Coast, a popular area defined by stunning natural beauty. The South Coast abounds with scenic drives, impressive waterfalls, glaciers, and the world-famous black sand beaches. 

The largest town in this stretch of the Southern Coast is the village of Vík and the best place to stay on this part of your trip. This seafront village is surrounded by the Mýrdalsjökull glacier, which covers the Katla volcano. However, the main attraction here is Reynisfjara Beach (map), a black sand beach with formidable rock formations. 

A very fun activity I recommend is attending the Icelandic Lava Show, an immersive experience that allows you to see a recreation of a volcanic eruption. I also suggest a visit to the nearby village Skógar (a 30-minute drive West of Vik), where you can explore the Skógar Museum and stop by the massive Skógafoss waterfall (map). 

Below, I feature my top Vik recommendations, but if you need more ideas, check out our post on the best Vik hotels

Vik hotel collage displaying a chic restaurant with an industrial vibe, a comfortable bedroom with grey tones and window views, and a wooden exterior hotel nestled in lush green hillsVik hotel collage displaying a chic restaurant with an industrial vibe, a comfortable bedroom with grey tones and window views, and a wooden exterior hotel nestled in lush green hills

Black Beach Suites ($$$)

Gorgeous modern suites with sun terraces and sweeping sea views. Each unit features a kitchenette, deluxe bathroom, terrace, and free private parking. Wake up each morning with an incredible sunrise pouring in through the huge windows overlooking the sea.

Hotel Katla by Keahotels ($$)

A modern hotel offering its guests access to a sauna, outdoor hot tub, and a fitness center. The onsite restaurant serves a buffet breakfast and local specialties for dinner, and there’s also a bar where you can have an after-dinner drink.

The Barn ($)

If you’re on the hunt for cheap hostels, you’ll be happy to discover The Barn. The hostel offers beds in shared dormitories, each surrounded with blackout drapes, access to shared bathrooms, and a communal kitchen. There’s also an information desk, luggage lockers, and a bar.

Vík Apartments

Within walking distance of Black Sand Beach, this accommodation features onsite parking and a 24-hour front desk. The apartments are fully equipped, with comfortable beds, designated seating and dining areas, and all the necessary kitchen facilities.

Things to do on the South Coast

  • See the Northern Lights from the black sand beach of Vik
  • Drive to see Seljalandsfoss, Skogafoss, and Gljúfrafoss waterfalls
  • Explore the Dyrhólaey peninsula
  • Admire the Eyjafjallajökull volcano
  • Try glacier hiking at the Sólheimajökull Glacier
  • Take a dip in the Seljavallalaug Swimming Pool

4. East Iceland (Höfn & Seydisfjordur) – for lava caves & fjords

Charming houses in red, black, and white, reflecting on the still waters of a lake with misty, rugged mountains in the background, in a peaceful Icelandic villageCharming houses in red, black, and white, reflecting on the still waters of a lake with misty, rugged mountains in the background, in a peaceful Icelandic village

Ready for more canyons, lava fields, and fjords? I hope so because we’re heading up the East Coast. The entire region has a jagged coastline of fjords, which is why you’ll hear people refer to this part of the county as the East Fjords. 

The first stop after moving on from Southern Iceland is the lovely town of Höfn, where you can spend a night before moving along the coast. Then, you can continue your trip along the coast, spend some time at Skaftafell National Park, and start to explore Vatnajökull National Park. Some of the main attractions in the area are the Vatnajökull ice cap and the famous Jökulsárlón glacier lagoon (map) – an absolute must do!!

The next spot to visit or stay in during your Eastfjords explorations is Seydisfjordur, situated at the tip of the fjord with the same name. From here, you can make the half an hour’s drive to Egilsstaðir, the largest town in the East Fjords region, then continue driving for another hour inland to arrive at the impressive Stuðlagil Canyon (map). 

As I already mentioned, for exploring the Eastern part of the country, I recommend staying in Höfn & Seydisfjordur or around them. Ideally, you would spend a night in both of these towns, so you have ample time to explore the region. 

East Coast hotel showcase including a lounge with panoramic windows facing snow-capped mountains, a bedroom with warm accents and a seaside view, and a bright red accent wall in a cozy living spaceEast Coast hotel showcase including a lounge with panoramic windows facing snow-capped mountains, a bedroom with warm accents and a seaside view, and a bright red accent wall in a cozy living space

Lilja Guesthouse ($$$)

Situated in Höfn, this guest house is not as luxurious as the hotels I usually recommend. However, it’s the most high-end option in the region, and one of the best things about staying here is the view – in winter, the Northern Lights view is stunning. Wi-Fi and parking are provided free of charge, and there’s also a shared lounge on the property.

Hotel Aldan ($$)

This Seydisfjordur hotel is ideally located for activities like kayaking, sailing, angling, and skiing and offers accommodation in comfortable rooms. The hotel restaurant offers à la carte dining, but you can also grab a snack or a light meal at the onsite cafe.

Hali Country Hotel ($$)

If you’re looking for another option in this part of Iceland, your best choice would be the Hali Country Hotel. During your stay at this hotel, you can admire stunning views of the Vatnajökull Glacier or the Atlantic Ocean and enjoy delicious local cuisine.

Hafaldan HI Hostel ($)

If you choose to stay in this Seydisfjordur hostel, you can choose between private rooms and beds in shared dorms. Regardless of what you pick, you get access to a lounge, a fully equipped kitchen, barbecue facilities, as well as a spa, a sauna, a children’s playground, and a fishing lake.

Díma Studio Apartments

Staying at this Höfn apartment will guarantee absolute privacy – there’s a private entrance, and the unit is equipped with everything you may need, from kitchen facilities to bed linens and towels. You can also dine at the onsite restaurant and benefit from free parking.

Things to do in East Iceland 

  • Visit the Skaftafell and Vatnajökull national parks
  • Don’t miss the Litlanesfoss waterfall over basalt columns
  • Drive up to the Stuðlagil Canyon
  • Spend some time admiring the icebergs at Jokulsarlon glacier lagoon
  • Marvel at natural Hengifoss and Gufu waterfalls

5. North Iceland (around Akureyri) – where to stay for whale watching

Panoramic view of Akureyri, Iceland's picturesque town with colorful buildings, set against a backdrop of mountains and low-hanging clouds, with a large cruise ship docked at the harborPanoramic view of Akureyri, Iceland's picturesque town with colorful buildings, set against a backdrop of mountains and low-hanging clouds, with a large cruise ship docked at the harbor

As you travel North on the Ring Road, the trip begins to become more flexible with many different options of things to do and places to stay depending on your time and interests. My top 3 destinations in the region are definitely Akureyri, the area around Lake Mývatn, and Husavik, about an hour North of the lake, all surrounded by stunning nature and offering many hiking trails and other opportunities for spending quality time outdoors. 

The main stop in the North of Iceland is Akureyri, Iceland’s largest town after Reykjavik, often referred to as the ‘Capital of North Iceland’. This is a port town at the base of Eyjafjörður Fjord, and it’s centrally located to explore the rest of the North. For example, you can take day trips from here to Lake Mývatn or Husavik; both are about an hour’s drive away. 

During your time in town, you can visit the Akureyri Botanical Garden and the Lutheran church Akureyrarkirkja (map). And if you’re traveling in December, the best time to visit Akureyri is around Christmas to attend the Advent celebrations. 

Are you over waterfalls yet? I hope not because there’s plenty more of them to see in Goðafoss, as well as the bird cliffs of Dyrhólaey, the blue waters of Lake Mývatn (they even call it the Blue lagoon of the North!), lava fields of Dimmuborgir, the black beaches of Reynisfjara, and not to mention the chance to go whale watching in Husavik!

TIP: if one of your goals on this trip is to see whales, I highly recommend booking an organized whale-watching tour – I really like this one! But you can also check out my selection of the best whale-watching tours in Iceland

If you are following the full 2-week itinerary, I recommend you choose 2 places to stay in North Iceland. A stop in both of the areas of the North will reduce your driving each day and give you much more time to fully explore the natural wonders of the region. However, if you’re in the country only for a week, then I suggest you spend one night in either Akureyri or Húsavík. 

North Iceland accommodation selection featuring wooden cabin exteriors in a rugged landscape, a spa with a transparent dome cover, and a minimalist bedroom with serene nature viewsNorth Iceland accommodation selection featuring wooden cabin exteriors in a rugged landscape, a spa with a transparent dome cover, and a minimalist bedroom with serene nature views

Hotel North ($$$)

This Akureyri hotel has spacious rooms with contemporary design, each with a private bathroom stocked with free toiletries, a flat-screen TV, and a desk. While staying here, you can also enjoy the garden, the terrace, and the shared lounge, as well as an amazing breakfast every morning of your stay.

Hótel Laxá ($$$)

Mývatn doesn’t offer an abundance of luxury hotels, and even though Hótel Laxá is a 3-star hotel, it does offer some upscale amenities. The rooms have modern furnishings, private bathrooms stocked with free toiletries, and satellite TV. You will also get access to a garden, a terrace, a bar, and a restaurant.

Hotel Natur Akureyri ($$)

A family-run hotel with views of the Eyjafjördur fjord, modern rooms with bright decor, a shared hot tub, and a sun terrace. You can also benefit from free Wi-Fi access and parking, and the use of communal facilities, such as the shared lounge and the kitchen.

Dimmuborgir Guesthouse ($$)

Situated on a farm near Lake Mývatn, this is one of the most authentic guest houses in this part of the country. You can rent rooms, cottages, and even an entire holiday home. Each morning, you can enjoy a breakfast buffet prepared from local ingredients and make use of the barbecue facilities at the property.

Hafnarstræti Hostel ($)

You can sleep in a pod in this Akureyri hostel – pick between single and double bed capsules, and gain access to shared bathroom facilities, a communal kitchen, and a dining room. The hostel is family-run, and the hosts are super-friendly and ready to assist you with everything you might need.

Húsavík Green Hostel ($)

The Húsavík Green Hostel is in a great location if you want to have easy access to activities like hiking and skiing. For your stay, you can choose between private rooms and shared dormitories and get access to shared spaces like a kitchen, a lounge, and a terrace.

Skjálfandi

This homestay offers fully equipped apartments suitable for both shorter and longer stays. You can also rent family rooms, and you can even commission the property’s airport shuttle – free of charge!

Things to do in North Iceland 

6. Westfjords (Ísafjörður) – off the beaten path

Two hikers in bright orange jackets stand in awe before the sprawling, textured cascade of Dynjandi waterfall in the Westfjords of IcelandTwo hikers in bright orange jackets stand in awe before the sprawling, textured cascade of Dynjandi waterfall in the Westfjords of Iceland

Many tourists who are short on time skip the fjords and drive straight back to Reykjavik from the North – about a 5-hour drive. However, since this is quite the drive, you’ll probably want to stay somewhere else in West Iceland, even if you decide to skip the fjords – more on that in the next section! 

Visiting the Westfjords is a good option for you if you have about 2 weeks time to explore the country. The region boasts some of the most impressive landscapes in the country and they’re definitely worth making a detour. 

For those of you who are lucky enough to have the time, the Westfjords is a region that deserves more recognition than it gets, and it is definitely one of the best places to stay in Iceland for its incredible dramatic landscapes. When looking at a map of Iceland, you may notice the hand-shaped piece of land that sticks out to the left.

This area is the Western Fjords (the most western point of Europe) and a place that only 10% of Iceland’s tourists visit!

This remote area has rougher roads than what you have become accustomed to but I assure you that this incredibly captivating region is something not to miss! One of the main reasons why you should come here is the puffins! These incredible seabirds live in the Westfjords, so it’s truly remarkable to see them in their natural habitat. Some of the best bird-watching spots are the Látrabjarg, Hornbjarg, and Hælavíkurbjarg cliffs. 

Note that the reason I say this area is only for those with enough time is because the drive from Varmahlíð in the North to the tip of the Westfjords (Ísafjörður) takes about 6 hours (or 7 from Akureyri). This is due to the road that zig-zags its way around the mountains. (Plus, remember that you have to drive back again to continue on the Ring Road). For more info, check out my full itinerary on the Westfjords

This is definitely where to stay in Iceland for those who love interesting driving and off-the-beaten-path adventures! And if you do decide to make the trip, I suggest you stay in Ísafjörður, the largest town on the peninsula – here are your top choices: 

Westfjords hotel collage capturing the aurora borealis over a lone house, a simplistic yet elegant bedroom with ocean views, and a tent accommodation on a wooden platform with scenic mountain backdropWestfjords hotel collage capturing the aurora borealis over a lone house, a simplistic yet elegant bedroom with ocean views, and a tent accommodation on a wooden platform with scenic mountain backdrop

Fosshotel Westfjords ($$$)

Even though this hotel is not as upscale as some other luxury hotels in the country, it offers impeccable service and modern amenities. You’ll have access to a daily breakfast buffet and à la carte restaurant with a bar, and the hotel staff can arrange various tours for you, including hiking, horseback riding, and sailing.

Country Hotel Heydalur ($$)

Staying at this hotel will grant you access to natural hot springs, an indoor pool, and a hot tub. You can try local dishes at the in-house restaurant, order room service, or enjoy a drink at the bar. The hotel allows you to rent horses and kayaks, and there are also fishing opportunities nearby.

Korpudalur HI Hostel ($)

This hostel is situated in a renovated farmhouse in a remote location and offers accommodations in basic rooms, as well as access to shared bathroom facilities and a communal kitchen. There are also onsite laundry facilities and free bicycle rentals.

Isafjordur CENTER Apartments

This spacious apartment is located in the downtown area of Ísafjörður and boasts 2 bedrooms, one with a queen-sized bed and another with single and bunk beds – perfect if you’re traveling with family or a group of friends. The apartment also features 1 bathroom, a comfortable seating area, and a full kitchen.

Things to do in Westfjords

  • See the astonishing Dynjandi waterfall
  • Visit the most western point of Europe – Bjargtangar
  • See cute puffins and go on a coastal hike at the Látrarbjarg cliff 
  • Explore all the tiny colorful fishing villages of the fjords
  • Take a long stroll on the reddish sand beach, Rauðisandura

7. West Iceland (Borgarnes & Húsafell + the Snaefellsnes Peninsula)

The iconic Kirkjufell mountain bathed in the glow of a sunset with waterfalls in the foreground and a picturesque landscape in Snaefellsnes Peninsula, IcelandThe iconic Kirkjufell mountain bathed in the glow of a sunset with waterfalls in the foreground and a picturesque landscape in Snaefellsnes Peninsula, Iceland

As you start to head South along the West Coast, you are now on the home stretch. Although you can drive directly from the North to Reykjavik, I highly suggest you make a stop in the West – the best spots for your break would be the town of Borgarnes or Húsafell, a large farm and church site. 

Borgarnes is located along the Ring Road, about an hour’s drive from Reykjavik, and is considered as the gateway to the Snaefellsnes Peninsula – most attractions on the peninsula are less than a couple of hours’ drive away. However, you don’t have to venture further into the peninsula – you can just spend a night here to rest and recharge. 

Húsafell is more centrally located in the West of Iceland, a 2-hour drive from the capital and less than 2 hours from the peninsula, and there are plenty of things to do around (I have it described in detail here). 

If you stay at either of these 2 places, you can visit the Snaefellsnes Peninsula, 100-kilometer-long (62-mile) region, bounded by the Borgarfjörður Fjord and full of active volcanoes! If you stay at Borgarnes, you need to drive for less than an hour until you enter the peninsula, while the drive from Húsafell will take 1h 40 mins. 

Compared to the West Fjords, it’s an easier place to access and closer to Reykjavik, so if you’re running short on time for the Westfjords, the Snaefellsnes Peninsula is the one to choose between the two. So, even if you opt for skipping the fjords, try to squeeze in at least one night on the Snæfellsnes Peninsula! Alternatively, you can just drive through the peninsula – it will take you a little more than 2 hours!

However, you can easily skip the peninsula as well (i had 2 weeks and it was not enough time to fit this in as well) – visiting it requires a detour from the Ring Road, so if you’re strapped for time or just tired of all the driving, you can choose to stay somewhere else in the West, Now, here’s where to stay in West Iceland for each budget:

West Coast hotel collage with an outdoor hot tub overlooking a sunset, a rustic wooden interior with comfortable bedding, and an aerial view of the hotel complex surrounded by wild vegetationWest Coast hotel collage with an outdoor hot tub overlooking a sunset, a rustic wooden interior with comfortable bedding, and an aerial view of the hotel complex surrounded by wild vegetation

Miðhraun – Lava Resort ($$$)

The hotel is in a stunning location, surrounded by pastures where you’ll see plenty of farm animals. While here, you can stay in comfy guest rooms or self-catering apartments, make the most of the lovely garden, or enjoy a romantic dinner at the restaurant.

Hótel Húsafell ($$$)

An upscale hotel in Húsafell surrounded by lush green landscapes and offering exclusive access to private geothermal pools. As a guest, you can also enjoy Nordic and international dishes at the hotel restaurant and ask the tour desk to arrange for you one or a few of the many available activities.

Hotel Stundarfridur ($$)

A lovely hotel with a cozy ambiance, clean and comfortable rooms, a restaurant, and a shared lounge. Each of the rooms has a private bathroom, a flat-screen TV, a desk, and unlimited Wi-Fi access.

The Freezer Hostel & Culture Center ($)

Situated in a former fish processing factory, this accommodation has been coveted into a hostel and a professional theater. You can choose from a variety of options – private rooms, dormitory accommodation, family rooms – all with retro-style furnishings, and attend one of the theater’s events and performances during the summer months.

Blómasetrið Homestay ($)

This budget homestay in Borgarnes offers bright and individually decorated rooms with wooden furnishings, access to a shared kitchen, a terrace, and an on-site gift shop where you can buy souvenirs, wine, and flowers.

Olga Apartments

These apartments offer spectacular views of the mountains and perks such as free parking and Internet access. Each unit has a private entrance, a comfortable seating area, a private bathroom, and all the necessary kitchen appliances.

Things to do in West Iceland

  • Hike to Eldborg Crater
  • See the active volcanoes in Snæfellsjökull National Park
  • Snap a picture of Kirkjufell mountain
  • See the geothermal pools of Deildartunguhver
  • Relax in the Canyon Baths of Husafell

8. Reykjanes Peninsula – near the Blue Lagoon and the Airport

A modern pedestrian bridge spans a stark, dramatic rift between two tectonic plates with a barren, volcanic landscape under a blue sky in Þingvellir National Park, IcelandA modern pedestrian bridge spans a stark, dramatic rift between two tectonic plates with a barren, volcanic landscape under a blue sky in Þingvellir National Park, Iceland

If you’ve got 2 weeks or less in Iceland, it’s probably time to head back to Reykjavik after an epic trip around the country on Route 1. If you’re lucky enough to have more time, or it’s your 2nd (3rd, 4th?) time visiting Iceland, you have to spend some time on the Reykjanes Peninsula and near Blue Lagoon. 

The Reykjanes Peninsula is home to the famous Blue Lagoon, as well as Keflavik Airport, the main point of entry (and exit) in Iceland. The Icelandic landscape of Reykjanes is what the tourists first see when they touch down at Keflavik Airport. What a beautiful first impression, right?

Although nearly every person who visits Iceland passes through here, what many tourists miss is that there’s more to this region than relaxing in the mineral waters of Blue Lagoon. As you might have already guessed, this area is full of geothermal activity with an abundance of volcanoes, craters, lava fields, and caves for you to explore. 

Reykjanes Geopark is also a UNESCO World Heritage Site, and its rugged mountain peaks and sharp ridges offer unique hiking trails to those who dare. And if you really just want to relax, you actually have 3 alternative geothermal pools to the Blue Lagoon to choose from. 

Since the peninsula is home to Iceland’s main airport, I think this is the perfect place to end your trip. Spend a night or two here, then board your flight and head back home!

Another thing I like about the Reykjanes Peninsula is the fact that it’s a little over 2 hours drive from the Landeyjahöfn ferry terminal, from where you can take the Herjólfur ferry to the Westman Islands if that’s something on your bucket list. 

Collage of Reykjanes hotel amenities with a geothermal pool snaking around natural rock formations, a stylish living room overlooking the rugged landscape, and a cozy bedroom with expansive viewsCollage of Reykjanes hotel amenities with a geothermal pool snaking around natural rock formations, a stylish living room overlooking the rugged landscape, and a cozy bedroom with expansive views

The Retreat at Blue Lagoon ($$$)

This is one of the most unique hotels in the entire country! In a stunning location near a volcanic frontier, this resort-style hotel provides guests with access to a geothermal lagoon, a subterranean spa, and 3 amazing restaurants. This is also the best hotel in terms of activities, offering daily group hikes and yoga sessions, horse riding, and snorkeling.

Courtyard by Marriott ($$$)

Situated right next to the airport, the Courtyard Hotel provides you with access to a 24/7 front desk, concierge services, a fitness center, and free parking. Each morning, you can choose from several breakfast options and also benefit from the luggage storage services.

Motel Arctic Wind ($$)

If you want to stay in a more secluded location, away from the crowds around the airport and the Blue Lagoon, this guesthouse is your best bet. You can relax in the hot tub at the property, and you can also get anything you need from the on-site minimarket.

Northern Light Inn ($$)

Staying in the Northern Light Inn means you can enjoy the comfort of the individually decorated rooms with heated floors and rain showers. A free breakfast buffet is available for all guests, as well as a daily manager’s reception, also free of charge. You can also make the most of the spa and wellness center and, of course, enjoy the view of the Northern Lights.

iStay Cottages ($)

These cozy wooden cottages are only a short drive away from Keflavik International Airport and are also ideally located if you want to drive to the Blue Lagoon or Reykjavik. Parking is also provided by the properties, and you get free access to the town’s public swimming pool as well as hot tubs and sauna center.

Start Keflavík Airport ($)

Just a 10-min drive from the airport, you can stay at this hostel offering accommodation in shared rooms with simple and modern decor. Parking is available at the property free of charge, and a delicious breakfast is included in the price.

Comfort and Rest

This comfy apartment offers great views of the sea, a private hot tub, as well as a kitchenette. The property is in a great location near the airport, and if you get a rental car, you can park for free onsite.

Things to do in Reykjanes Peninsula

  • Hike the loose, but not too steep terrains of Mount Keilir
  • Go lighthouse hopping (they outnumber the villages in Reykjanes Peninsula)
  • Cross the Bridge Between Two Continents (Europe and North America)
  • Enjoy a relaxing day at the Blue Lagoon
  • Check out the Viking World, a Viking ship museum
  • Pay a visit to The Icelandic Museum of Rock ‘n’ Roll

FAQs about where to stay in Iceland

A puffin with a black back, white belly, and distinctive orange beak and feet perches on a mossy cliff over the blue ocean in IcelandA puffin with a black back, white belly, and distinctive orange beak and feet perches on a mossy cliff over the blue ocean in Iceland

🛣️ Which way to drive the Ring Road?

Most people drive the Ring Road counterclockwise since you see the biggest attractions first. Although you can choose to drive it in either direction, driving counterclockwise will allow you to explore the top attractions without having to rush through them at the end of your trip.

✨ Where to stay in Iceland for Northern Lights?

Since the entire country is located above 64° North, aside from cities, you can see the Northern Lights from anywhere during winter, given the right atmospheric conditions! The Ranga Hotel in Hella is the best hotel to stay in, but you can also take a Northern Lights Hunting tour.

🏔️ Where to stay in Iceland on the Golden Circle? 

The best place to stay on the Golden Circle is Selfoss, and the absolute best hotel is 360 Hotel & Thermal Baths. However, if you’re looking for something more affordable, you can also stay at the lovely Guesthouse Bitra B&B

🏨 Best Iceland hotels with hot springs?

💸 Is it expensive to stay in Iceland?

It’s no secret that traveling to Iceland is expensive. Although there are budget hotels, hostels, and many savvy ways to save money, you have to brace yourself for costly activities, transportation, food, and alcohol.

👨‍👩‍👧‍👧 Where to stay in Reykjavik with family?

🧭 Where to stay near Reykjavik?

If you want to be close to Reykjavik but stay outside the city, I recommend booking a hotel on the Reykjanes Peninsula. My top choices for staying on the peninsula are The Retreat at Blue Lagoon and Northern Light Inn in Grindavik.

🛬 Where to stay near Keflavik Airport?

📍 Where to stay in South Iceland?

🛶 Where to stay near Lake Myvatn?

Conclusion

The Northern Lights (Aurora Borealis) dance in the night sky, casting a green glow over a snowy fjord with illuminated buildings in an Icelandic villageThe Northern Lights (Aurora Borealis) dance in the night sky, casting a green glow over a snowy fjord with illuminated buildings in an Icelandic village

I hope this was a useful guide to the best Iceland accommodation options for you and your family or friends. By now, you’ve probably decided where to stay in Iceland (and maybe even booked something!), as there are plenty of amazing options. 

I already gave you a rundown of the best accommodations across Iceland, but if you still don’t know where to stay, these are the 2 best hotels that topped my list:

  • The Reykjavik EDITION – centrally located hotel with a top-notch restaurant and an amazing spa center
  • ION City Hotel – the best hotel for an affordable price in the city center, with modern rooms and a fitness center

As Iceland isn’t the cheapest travel destination, it pays to book well in advance to get the best deals on some amazing hotels!

Planning a trip all across Iceland? Check out our ultimate guide to Iceland to discover many helpful tips and great accommodation options. 

Have an incredible stay in Iceland! Make sure to leave your questions in a comment down below and I will answer as soon as possible!

Happy travels, 

Yulia


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