Where to Stay in Iceland: All of the Areas to Stay
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Hey fellow nomads! After numerous trips across Iceland’s dramatic terrain, I’ve stayed in everything from quirky downtown Reykjavik hotels to remote guesthouses under the midnight sun. Whether you’re chasing waterfalls, the aurora, or solitude in a fjord, I’ll help you pick the perfect places to rest your head based on real experiences and what truly makes each region unforgettable.
Introduction: Where to Stay in Iceland
Deciding where to stay in Iceland isn’t just about a bed, this decision literally shapes your entire experience and can make or break your trip. There are many questions you need you ask yourself when deciding where to stay in Iceland. Do you want city charm and gourmet dining in Reykjavík? Or are you seeking peace beside glacier lagoons or volcanoes? From the Golden Circle to the Ring Road and far north to East fjords, I’ll guide you through each region’s unique accommodation vibe, personal pros and cons, and insider tips to match your travel style. The goal is for you to know where to not only stay in Iceland as far as region, but also the best hotels Iceland to stay in. Now, let’s dive in!
1. Where to Stay in Reykjavík
Reykjavík was my first taste of Iceland and honestly, the perfect place to land, shake off jet lag, and fall into the rhythm of the country. I stayed in a small boutique hotel tucked just off Laugavegur, Reykjavík’s main shopping street, and every morning I’d grab a coffee and walk past rows of rainbow-colored houses to Hallgrímskirkja. I loved the buzz here from food trucks to art murals, and the salty breeze blowing off the harbor.
One night, I went up to our hotel’s rooftop and watched the sun fade behind Faxaflói Bay. Another night another solo traveler, who I met on my tour, and I decided to find a spot to listen to live music, and we actually had the time of our life just hanging out at a local venue in walking distance of our hotel. One of the best aspects of staying in the city is that you literally have everything you need in walking distance: food, things to do, cafes, etc., all literally at your doorstep.
Best For: Staying in the city center is great if you are a first-time visitor, nightlife lovers, culture seekers, solo traveler, or anyone looking for day trip from Reykjavik day tours.
Insider Tip: Book somewhere with blackout curtains, Reykjavík nights don’t get dark in summer. And if you’re there in winter, check if your hotel has rooftop access as you might just catch the Northern Lights from your room.
2. Where to Stay in Golden Circle Iceland
If you want the freedom of the Golden Circle without the Reykjavík crowds, Selfoss and Hella are perfect. While I was exploring this area of Iceland, my homebase was just outside of Selfoss, where I could literally see sheep just grazing the land from my window. It was serene, but still close enough for easy day trips to Þingvellir, Gullfoss, and Geysir.
I think one of the best aspects of this region was how dark at night it could get being away from the city lights and population. And even though I had cloud coverage every night and didn’t get the opportunity to see the Northern Lights, the experience of feeling remote and at peace, was just as good (well, almost).
Best For: These region of Iceland is perfect for those who enjoy taking road trips, want to explore the Golden Circle, and those who are looking for modern comforts, but at the same time, feeling out in in the open.
Insider Tip: Try and stay at accommodations that have outdoor hot tubs. There is honestly nothing better than after a day of hiking and exploring, coming back to your hotel and soaking in a hot tub with the night sky above you. And if you are lucky, which I was not, catching the Northern Lights dancing above you.
3. South Coast Iceland
I can still feel the cold mist of Skógafoss on my face from that sunrise hike. Vík is hands-down one of my favorite places in Iceland, it’s the ideal base for chasing waterfalls, walking black sand beaches, and visiting glacier lagoons.
I stayed at a family-run cliffside guesthouse with a breakfast room that overlooked the sea stacks of Reynisdrangar. It was surreal, especially during golden hour when the whole landscape turned warm and otherworldly. In the evenings, I’d return with muddy boots and tired legs, pour a glass of wine, and just watch the fog roll in from the ocean.
Best For: This area is best if you want to do some hiking, or you are into photography, are a nature lover, or enjoy countryside road trips.
Insider Tip: I feel like this tip is useful for any travel, but don’t overbook your schedule. Make sure you save time for the unexpected and enjoy some iconic waterfall sunrises or sunsets. Also, if you’re visiting in winter, always make sure that you check road conditions daily before heading further east.
4. Höfn Iceland
Höfn has a laid-back, almost nostalgic feel that I didn’t expect. It’s the lobster capital of Iceland, and yes, I ate my weight in langoustine. But it’s also a great spot to recharge after the South Coast’s fast pace. My guesthouse overlooked the harbor, and I could literally hear icebergs cracking in the distance on quiet nights.
Staying here meant I was close to Jökulsárlón and the Diamond Beach, but far enough to avoid crowds once the tour buses left. I also loved exploring the East Fjords, each little fishing village felt like a secret I’d stumbled upon.
Best For: This area is best to stay in if you are looking to explore glaciers, enjoy amazing seafood, and if you are looking for a slower-paced travel experience.
Insider Tip: Be mindful of restaurants operating times. Frequently they close early in the off-season, so plan accordingly.
5. Snæfellsnes Peninsula
If you take anything away from this guide, let it be this. Make sure you come to theSnæfellsnes Peninsula even if you only have a few days. Snæfellsnes has it all, volcanoes, lava fields, windswept beaches, tiny fishing towns, and even puffins if you’re lucky.
I splurged a bit and stayed at Hotel Búðir, and it was worth every penny. This hotel sits next to a lava field and you even have a great view of a glacier in the distance.The food was gourmet, but the vibe was relaxed, fires crackled in the lobby, and guests shared aurora alerts like old friends.
Best For: This area of Iceland is great for those romantic getaways, photographers, and nature lovers who don’t want to drive far from Reykjavík.
Insider Tip: Stay at least two nights. It’s tempting to do Snæfellsnes as a day trip, but the real magic happens when the crowds are gone, sunsets, quiet trails, and stars like you’ve never seen before.
6. Westfjords
Ok, so if you are looking for an area in Iceland where you literally feel like you are in another world entirely, then you need to make sure and add Westfjords to your itinerary. I stayed near Ísafjörður in a guesthouse with no Wi-Fi, no phone signal, and more sheep than people. It was weirdly nice to be completely disconnected and to actual be in the moment and enjoy watching the birds, soaking in the amazing hot springs and just enjoying the peace and solitude.
Now North Iceland, on the other hand, I feel like is Iceland’s hidden gem. Akureyri is the unofficial capital up north, and it’s perfect if you want amenities without the bustle of Reykjavík. I stayed near Lake Mývatn and loved the geothermal pools, volcanic hikes, and bird watching (puffins galore!). Plus, whale watching in Húsavík is 1000x more intimate than the southern tours.
Best For: This area of Iceland is great for those travelers looking for solitude, off-the-beaten-path travel, or a complete nature immersion.
Insider Tip: The roads in the Westfjords tend to be slightly sketchy, so make sure you rent a 4-wheel drive and add some extra drive time as a buffer. I would also, pack snacks and water because some accommodations are a few hours away from the nearest restaurant or grocery store.
Conclusion: Where to Stay in Iceland
Where you stay in Iceland shapes your journey. From Reykjavík’s urban energy to rural fjord cabins, your choice sets the mood, pace, and access to nature’s greatest shows. Pick from cities for convenience, rural gems for views, or wild retreats for solitude and each night becomes part of the adventure. Let me know if you’d like hotel-specific recommendations or customizable itineraries based on your travel style!