Reykjavík, one of the most underrated cities, is probably one of the best places I have visited so far! With its many unique activities, amazing culture, and unmatched energy, it's hard not to fall in love with this city.

Reykjavik is a pretty small city with a population of only around 130,000 people. It is not only the first settlement in Iceland but also the world's northernmost capital city. There are plenty of things to do in Reykjavik, making it a great option even for a short weekend trip.

Reykjavik sun voyager City Centre

Additionally, it serves as an excellent starting point for exploring the rest of Iceland's unique and breathtaking landscapes if you have more time. If you're looking to go a road trip around Iceland's golden circle, I recommend you read my 7-day self-drive Iceland itinerary.

Whenever I plan a trip to a new destination, I always ask myself the same question: Where will I stay? Fortunately, there are many popular hotels and areas to explore in Reykjavik. I'm here to help you figure out where to stay in Reykjavik.

The best areas to stay in Reykjavik

When visiting Reykjavik, I recommend staying in the Reykjavik city center, which is called Miðborg. It is close to all the tourist attractions, has a fun atmosphere and is super easy to navigate.

Central Reykjavik is the best area to stay for most people, and I highly recommend you find your Reykjavik accommodation in the downtown area.

Nevertheless, there are other locations in Reykjavik that may better suit your plans and preferences.

Laugardalur is just outside the busy City Centre and a little quieter, so it is a great spot if you are looking for some relaxation or you want to bring your family.

Staying near the Keflavik Airport also has its perks, especially because the famous Blue Lagoon is just around the corner!

1. Where to stay in Reykjavik for the first timers: Miðborg/City Centre

For those visiting for the first time, I suggest staying in the Reykjavik City Center, also known as Reykjavik 101. Besides being near most of the main attractions, this area hosts some of the town's best restaurants and cafés.

The City Center is also great for nightlife and offers many exciting bars and clubs. I always recommend going out at least once to experience Reykjavik's buzzing nightlife atmosphere. Additionally, Midborg is close to the beach, where you can find many natural lagoons and hot tubs!

Overall, the area of Reykjavik 101 is a fantastic place to see it all and fully experience the warm hospitality of the locals. They are some of the most welcoming people I have ever had the pleasure of meeting.

Best area for:

  • Solo travelers

  • Backpackers

  • First timers

Things to see & do in the City Centre

Reykjavik's cultural hub is truly the 101, where you can find everything you could need. This place is buzzing with a great music and art scene, beautiful landmarks, and amazing nightlife, making it a must-visit destination.

Rainbow Street is arguably one of the most beautiful and definitely busiest streets in Reykjavik. Back in 2015, the street had a rainbow painted on it to celebrate Reykjavik Pride, and nowadays, you can also find plenty of opportunities for shopping and dining here. For anyone wanting to do some serious shopping, I recommend checking out Laugavegur Shopping Street, Reykjavik's main street.

Lastly, don't forget to head over to Hallgrímskirkja church, which is a stunning 75 m high building, making it the tallest church in Reykjavik!

Best hotels to stay in Reykjavik City Centre

($$$) Reykjavik Konsulat Hotel

The Reykjavík Konsulat Hotel is a top-luxury pick in the city center and one of the best Reykjavik hotels, offering the perfect amount of comfort and convenience. Centrally located within walking distance of the city's main attractions, it provides easy access to all that the city has to offer.

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Reykjavik Konsulat Hotel

($$) Radisson Blu 1919 Hotel

The Radisson Blu 1919 is an excellent choice for those who want to experience the city's more contemporary side. This beautiful hotel offers modern private rooms with sleek design elements, as well as a delicious breakfast and free access to the fitness center.

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($) Kex Hostel

Even though Kex is a more affordable choice, it has modern decor and top-quality facilities that give it a luxurious feel. I like that the hotel is centrally located near major attractions like Hallgrimskirkja Church and the National Museum, making it ideal for discovering Reykjavik by foot!

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Best hotels in Reykjavik near Hallgrímskirkja/Rainbow Street

($$$) Canopy by Hilton

The Canopy by Hilton is an exceptional choice and one of the best hotels in Reykjavik if you're looking for luxurious hotels with a central location. It offers spacious rooms, a delicious breakfast buffet, and a fully-equipped gym.

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Canopy by Hilton

($$) Thingholt by Center Hotels

The Thingholt by Center Hotels is one of the best boutique hotels in Reykjavik, offering a unique Icelandic design. The hotel's interior is decorated with traditional Nordic design elements such as warm woods and textiles, providing a cozy atmosphere.

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($) Room With a View Hotel

For anyone who doesn't want to break the bank, the Room With a View Hotel is one of my favorite budget hotels. It is close to all the major attractions and offers basic amenities such as free WiFi, private bathrooms, and a good breakfast.

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Best affordable hotels in Reykjavik City Centre

($$) Reykjavik Residence Apartment Hotel

This 3-star hotel in the city center offers great value for your money and is one of the best and most affordable hotels in Reykjavik. It provides a 24-hour reception and airport transfer, and all apartments are equipped with basic amenities such as free WiFi access.

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($$) Center Hotels Skjaldbreid

The Center Hotels Skjaldbreid is one of the best budget hotels for those looking for an affordable yet comfortable stay in Reykjavik. It is close to the city center and within walking distance of the iconic Reykjavik Art Museum.

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($$) Center Hotels Klopp

The Center Hotels Klopp is a great, budget-friendly hotel in the heart of Reykjavik. It has great, Nordic-style decor and impresses with views of the bay and nearby mountains.

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Best hotels in Reykjavik with easy parking

Reykjavik, as the capital of Iceland, offers excellent public transportation options and is a compact city that can easily be explored on foot. By returning your vehicle, you can avoid the hassle of parking, traffic, and potential expenses associated with car rentals.

I highly recommend returning your van or car either before or after your Ring Road trip and opting not to have a vehicle while staying in Reykjavik unless you plan on using the city as a base for day trips.

($$$) The Swan House Hotel 

The Swan House Hotel is a great option for those looking for easy parking in Reykjavik. The luxury hotel offers free parking and provides access to the city's main attractions within walking distance.

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The Swan House Apartments

($$) Apartments Reykjavik

The Apartments Reykjavik are a great mid-range option for those who need to stay in the city center and require parking for their vehicle. The property offers free public parking and beautiful, spacious, and modern luxury apartments.

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($) NN Urban Guesthouse

The NN Urban Guesthouse is one of many great budget hotels and a great choice for those who need parking in Reykjavik. It offers free public parking and basic amenities such as WiFi access, allowing you to save money while still having all the necessary comforts!

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Best hotels to stay in Reykjavik to see the Northern Lights

($$$) Reykjavik Natura

The Reykjavik Natura is a top-luxury pick and one of the best hotels to stay in Reykjavík for anyone looking to catch the Northern Lights. It is located close to the geothermal beach, and it is also home to a spa and an Icelandic Modern Art Exhibition.

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Reykjavik Natura

($$) Hótel Reykjavík Grand

The Hotel Reykjavík Grand is a great mid-range hotel option offering an amazing location for viewing the Northern Lights. It provides comfortable rooms, free WiFi access, and a delicious breakfast buffet, as well as a spa and gym.

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($) Hotel Laxnes

Just a 10-minute drive from Reykjavik, Hotel Laxnes is a great budget-friendly option for seeing the Northern Lights. It offers comfortable rooms with free WiFi as well as a restaurant and bar.

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Most unique hotels to stay in Reykjavik

($$$) Reykjavik Domes

The Reykjavik Domes offer a one-of-a-kind experience for those looking to stay in Reykjavík. Each room is dome-shaped and will leave you with stunning views of the nearby mountains, and if you're lucky, this is the best spot to view the Northern Lights as well. This is definitely one of my favorite spots and also the best place to stay in Reykjavik for couples!

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Reykjavik Domes

($$) The Reykjavik EDITION

The Reykjavik EDITION is one of the most luxurious and high-end Reykjavik hotels. It offers sleek and stylish design elements throughout, as well as a top-notch spa with a hammam.

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($$) ION Adventure Hotel

For all of you who want to get the full northern lights experience but don't want to miss out on an extremely luxurious stay, the ION Adventure Hotel is a perfect choice and one of the best luxury hotels. It's located almost at the foot of Mount Hengill and provides its guests with a unique experience in a unique atmosphere, it's definitely one of the coolest places to stay in Reykjavik.

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2. Where to stay in Reykjavik with family: Laugardalur/Hot Spring Valley

The area of Laugardur, also called Hot Spring Valley, is perfect for families who want to experience a relaxing and enjoyable vacation. It is much quieter than the city center, but still close enough to enjoy all the attractions and landmarks Reykjavik has to offer.

The area is also great for families because there are many outdoor activities available, including sports centers, hiking trails, and an ice rink. Additionally, one can enjoy the beautiful Grasagardur Botanical Garden, which is home to a variety of international plants.

Best area for:

  • Families

  • Relaxation

  • Outdoor activities

Things to see & do in Laugardalur

Laugardalurhas a great location and is one of the best neighborhoods in Reykjavik, especially when you have kids. It offers a range of recreational activities and facilities that will keep your children entertained. You can visit the Laugardalslaug public pool, which is the largest one in Iceland, and the Reykjavík Zoo is also nearby.

In addition, the location has plenty of well-managed parks and green spaces that are perfect for picnics or just hanging out on a summer day with the midnight sun. Moreover, there are several fantastic hiking trails available if you want to stay active during your visit to the city!

Best hotels to stay in Laugardalur/Hot Spring Valley

($$$) Hilton Reykjavik Nordica

The Hilton Reykjavik Nordica is one of many luxury hotels and one of the best 5-star hotels in Reykjavik. It offers spacious and comfortable rooms with modern furnishings, as well as a spa featuring two spa baths, an outdoor hot tub, a pool, two aroma steam rooms, and a sauna.

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($$) Hótel Reykjavík Grand

For anyone looking for a mid-range option in the area, the Hotel Reykjavik Grand is an excellent choice. It offers top-notch service and well-equipped rooms with free WiFi access, as well as a delicious breakfast buffet and a gym.

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($) Reykjavik Lights Hotel

The Reykjavik Lights Hotel is a great, budget-friendly option for those who want to stay in Laugardalur. It even offers hostel-style dorm rooms for those on a tighter budget.

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3. Where to stay in Reykjavik close to the Blue Lagoon & International Airport: Keflavík

Keflavík, located just outside Reykjavík and approximately 45 minutes away from the city center, is a perfect spot for those who want to stay near Keflavík International Airport and the Blue Lagoon.

Though not as busy as Reykjavík, its proximity to these popular destinations makes it an excellent location for the first or last few days of your Iceland itinerary. You won't have any difficulties finding transportation from Reykjavík to the airport when you are so close to it, and you'll also be very close to the famous Blue Lagoon!

Best area for:

  • Short trips

  • Visiting the Blue Lagoon

  • Late/early flights

Things to see & do close to the Blue Lagoon

The star of the show definitely is the Blue Lagoon, which is just a few minutes away from Keflavík. It is one of Iceland's most popular attractions and for good reason! The geothermal spa offers a range of treatments and relaxation options that cannot be found anywhere else.

Aside from the Blue Lagoon, there are also plenty of other activities to do in the area. Visiting the nearby town of Grindavik is a must, as it is filled with quaint shops and restaurants that will make you feel like a local. Additionally, there are some great hiking trails in Keflavík, so if you're looking for exercise during your stay, this is the place to go!

Best hotels to stay near the Blue Lagoon

($$$) Northern Light Inn

The Northern Light Inn is one of my absolute favorite Reykjavik hotels because it is right next to the Blue Lagoon. This family-owned boutique hotel offers spacious, modern rooms with stunning views of the nearby mountains, the Northern Lights, and the Blue Lagoon.

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($$) Courtyard by Marriott

The Courtyard by Marriott is the perfect hotel for you if you need to stay close to the airport. It offers a convenient location just a short distance from Keflavik International Airport and provides free shuttle services for guests who do not have their own car.

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($) Konvin Hotel

The Koven Hotel is a great budget option close to the Keflavík Airport, offering modern design at an affordable price. The hotel provides great services, such as a large breakfast buffet beginning at 4:00 am for all those who have to catch an early flight

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Where to stay in Reykjavik – Frequently Asked Questions

📍 Where is the main area of Reykjavik?

The main area of Reykjavik is located in the downtown core, centered around the streets of Laugavegur, Bankastræti, and Austurstræti. This vibrant district is known for its lively atmosphere, diverse shops, eateries, and cultural attractions, making it the heart of the city's social and commercial life.

📅 How many days should I spend in Reykjavik?

It depends on what you want to do, but I suggest spending at least three days in Reykjavik. This is enough time to explore the city's attractions and experience some of the local nightlife as well. However, you can easily spend more time here, especially when you use the city as a base to explore nearby places like snorkeling Silfra and the rest of Iceland by car or camper.

❓ Where’s the best area to stay in Reykjavik? 

The best area to stay in Reykjavik is, without a doubt, the city center (known as Reykjavik 101). This area provides convenient access to all of Reykjavik's attractions, as well as restaurants and nightlife. It is also the best area to explore and enjoy the beautiful shoreline with its natural lagoons and hot tubs. Alternatively, if you prefer a more peaceful stay for you and your family, Laugardalur might be a better option for you.

💸 Is Iceland expensive?

Although Iceland can be expensive, there are ways to save money! You can rent a car and explore the country on your own or use reliable, affordable public transportation. To save money, it might be a good option to cook your own meals instead of eating out, as it can be quite pricey. Moreover, I have listed some budget-friendly accommodation options for you to consider.

🚶 Can you walk around Reykjavik City?

Yes, the city center of Reykjavik is fairly small, and most attractions are within walking distance. I suggest taking a walk around the city or even joining a walking tour to explore the local culture and discover some of its hidden gems. The shoreline is also easily accessible by foot from downtown Reykjavík. Additionally, it is very safe to walk alone in Reykjavík, even at night.

☀️ What are the best months to visit Iceland?

The best months to visit Iceland are between June and August, as the temperatures are mild and you will get the most daylight hours to explore all the best things in Iceland in summer. However, I suggest visiting in the autumn or winter if you want to experience the Northern Lights! No matter when you decide to go, make sure to bring warm clothes and good shoes, as it can be very chilly in Iceland.

Where to stay in Reykjavik – Final Words

For my guide to where to stay in Reykjavik, I highly recommend you find yourself a hotel in the downtown area of the city, to be close to all Reykjavik attractions while also offering plenty of great restaurants and nightlife.

Additionally, there are a few great budget-friendly accommodation options as well as a few activities that you can do during your stay. Now, it really is up to you to figure out which hotel will suit you the best!

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