Where to stay in Iceland? 

By Ian McDonald

A multitude of amazing locations. 1 country, with 1000 awe-inspiring places to rest your head

Where to stay in Iceland? 

By Ian McDonald

A multitude of amazing locations. 1 country, with 1000 awe-inspiring places to rest your head

You’ve got your confirmation email, your flights to Iceland have been booked! GREAT! Maybe it is your first trip to the land of fire and ice, or maybe you’re a regular visitor, but whatever the case may be you will need to find a place to rest your head. The question is…..where to stay in Iceland?

At first glance it might seem easiest to stay in or around Reykjavik, it is close to the Airport after all, and a good base to explore around the wider island. It is however, far from the only option!

It’s not just the Golden Circle! Iceland is a compact country with a big heart and much to see.  There truly is something for everybody; whether you are looking for a camping adventure in the wilds or just relaxing in natural hot springs and enjoying the spectacular scenery. With that in mind we will break this article into north/south/east/west and highlight the differences in each location and what you can expect from your stay in Iceland!

Where to stay on... the Reykjanes peninsula

Valahnukamol Reykjanes Iceland
Valahnukamol - Photo by Kevin Pages

I would first like to give a shout out to the Reykjanes peninsula, as I feel that it ranks as one of the most unappreciated areas of Iceland. This is a huge shame as it contains some truly hidden gems just a short way from the airport and the city of Reykjavik.

Broadly speaking, the Reykjanes peninsula stretches all the way from Keflavik airport to  the outskirts of Reykjavik.

For a lot of people, their experience of Reykjanes doesn’t go much further than the view from the coach window on their way into town or to the blue lagoon (more on that later). However, there are several small towns along the peninsula which are worth thinking about staying in depending on your itinerary and budget.

Valahnukamol Reykjanes Iceland
Reykjanes Lighthouse - Photo by Kevin Pages

In the town of Keflavik itself, there are a number of places to stay within minutes of the airport. These range from budget hostels all the way up to 5 star luxury hotels, which makes this an ideal place to stay if you are visiting Iceland for a long weekend or are on a short layover between flights. Buses regularly travel between Keflavik and Reykjavik, and the entire peninsula is easily accessible by car.

One of the newest and most popular places to stay in Reykjanes is the hotel at the Blue Lagoon. The construction of the hotel has only recently been completed, and given that the Blue Lagoon itself is repeatedly listed as one of the “must visit” places in the world, staying there is certainly worth considering, even though it is more on the pricey side when compared to other hotels.

Where to stay in... Reykjavik

Hallgrimskirkja Reykjavik
Skólavörðustígur Reykjavik - Photo by Kevin Pages

There is a lot to talk about with regards to where to stay in Reykjavik. It is truly a varied city with options (depending on the season) from campsites in and around town, all the way up to 5 star luxury hotels and everything in between.

From my own experience, I have spent a lot of time in hostels as opposed to higher priced hotels, and Reykjavik has more than its fair share.

I find that this is a good way to meet fellow travellers, to be close enough to downtown that your bed is only a tipsy stagger away, and none of the hostels will break the bank.

www.hostelworld.com is a great site which can be used to find a place to stay, allowing you can tailor the searches to find exactly what you might be looking for.

Another option is to book a place to stay through www.airbnb.com. There are a huge number of places available throughout the city if you feel like having that “home away from home” experience.

Where to stay on...the south coast

Skogafoss Iceland
Skogafoss - Photo by Kevin Pages

After Reykjavik and the Golden Circle, the second most popular place in Iceland to visit is the south coast.

You will find some of the most recognizable landmarks such as the Seljalandsfoss and Skogafoss waterfalls, the black sand beach at Reynisfjara and of course the stunning Jökulsárlón glacier lagoon.

 Most people visiting Iceland will usually spend a day visiting these landmarks as part of a guided tour before heading back to stay in Reykjavik.

This is far from the best way to see the south coast in my experience, especially if you have access to your own transport. (a hired car, public transport etc.)

The south coast is dotted with a myriad of new hotels and small towns which are all beautiful and unique.

Worth checking out are the hotel Kria, which is located in the town of Vik.

You could even stay at one of two locations of The 5 Million Star Hotel where our Bubbles offer you the perfect  romantic getaway under the northern lights or midnight sun.

A short ferry trip from the southern coast of Iceland lie the Westmann islands.

This is the home to flocks of migrating puffins (depending on the season) and some truly spectacular walking paths which look out over the North Atlantic ocean.

In the harbour you will also find the Sea life whale sanctuary, which is the home to two rescued Beluga whales and a museum dedicated to conservation efforts and the island in general.

The ferry to the Westmann islands leaves daily, and takes around 30 minutes to make the trip, so there is no reason not to hop over if you have the time!

Vestmannaeyjar South Iceland
Photo by Kevin Pages

The town of Vik is a 3 hour drive from Reykjavik, and is located fairly centrally along the south coast. Because of this, it can act as a very useful place to stay in order to break up a longer drive east (perhaps to Jökulsárlón or the East Fjords). A lot of people choose to stay overnight in the town itself before heading back to Reykjavik or continuing further.

One of the biggest draws to this town is the black sand beach at Reynisfjara. This has become one of the most recognisable places in Iceland in recent times, both because of its sheer dramatic beauty as the huge waves crash over basalt columns, and due to the fact that this area has featured in dozens of movies and music videos.

Driving around one hour further east from Jökulsárlón, you will find yourself in the town of Hofn. This is one of the biggest towns in the region, and that makes it the perfect place to stay whilst exploring the south coast or before continuing further along the ring road.

It is also famous for its lobster festival which is held every summer, so make sure to check the dates if you are there around June/July!

For photographers (or anybody who with an eye for a view), this area is also home to some of the most spectacular and iconic places to visit.

Looming over the town is the mountain of Vestrahorn, which has some amazing walking trails and views over the nearby Vatnajokull glacier which are not to be missed!


Travelling to Iceland?

Check our overnight tours with a driver guide that includes a one night stay in a bubble.
See Guided Tours

*Starting from ISK 74.900 per person

bubble in iceland

Where to stay in...the highlands

Landmannalaugar Campsite Iceland
Landmannalaugar -Photo by Kevin Pages

I could not talk about the south coast without mentioning one of the most challenging but unforgettable places to visit. The Laugarvegur trail stretches around 55km across the highlands, heading southwards until ending in the stunning area of Thorsmork.

To complete this takes around 4 days, so preparation is essential and should only be attempted by those with a decent level of fitness.

There are campsites along the trail, but also it is possible to stay inside shared dormitories along the way (it is always worth booking these in advance as they do fill up).

The trail begins in the highlands at Landmannalaugar and is only accessible in the summertime via coach or specialised 4×4 as it involves several river crossings.

In Thorsmork itself, you will find a  green and verdant paradise surrounded on all sides by mountains and glaciers. Staying in this area gives a lot of options depending on time and budget.

There are numerous campsites dotted around, all with good facilities and sheltered from bad weather, and even the option of staying in a “glamping” tent! (A perfect relief after finishing a long hike)

Where to stay in...east Iceland

Borgarjordur Eystri Iceland
Borgarfjordur Eystri -Photo by Kevin Pages

The east of Iceland is a long trip to reach, but absolutely worth it. Here you will find some of the most stunning scenery and picturesque towns in the country.

Reaching the east can be time consuming, as driving can take at least 5 hours depending on if you take the north or south route.

If you don’t feel like a long drive however, there are daily flights from the domestic airport in Reykjavik all the way to the town of Egilsstadir which take less than an hour. The town itself is a great place to stay if you’re looking for a base whilst exploring the surrounding area.

It is pretty central to the other major towns which are dotted around the East Fjords and a short drive to the town of Seydisfjordur, which is where the ferries dock from Denmark and the Faroe islands.

Driving south from Egilstadir, you will reach the town of Dupivogur, which is home to both a strange series of giant egg statues along the harbour, and one of my most memorable encounters since I arrived in Iceland.

Just to the side of the road at the harbours edge lives a man called Villi. He makes a living by collecting driftwood from the beaches and turning it into art. His house is full of hundreds of these beautiful objects, and after accidentally stumbling upon his workshop/store I ended up getting lost in conversation with him for several hours! He is a fascinating person, and just to meet him is worth the drive to Dupivogur itself.

Where to stay in...the North

Akureyri Iceland
Akureyri - Photo by Kevin Pages

The north of Iceland is where you will find Akureyri, Iceland’s second biggest city. It is a small city by most standards, but still feels very lively and bustling, especially in the height of summer.

Akureyri is approximately a 6 hour drive from Reykjavik along the ring road, but flights also travel daily from Reykjavik domestic airport. Due to the small size and relative isolation, it is the perfect place to visit for anyone who wants to feel close to nature, as you can easily be out in the countryside within a few short minutes of driving.

Some of the most scenic camping in Iceland can also be found a short drive away from town in the beautiful forest of Vaklaskogur, which is Iceland’s second largest forested area.

Approximately one hours drive north of Akureyri is the town of Husavik, which recently garnered attention as the setting of the latest Will Ferrell movie about an aspiring Eurovision song contest act (There is now even a “Ja Ja ding dong” bar located in Husavik!)

Besides this, Husavik has always been a popular place to visit due to the fact that it is one of the best places in Iceland to participate in a whale watching tour, and there is also a fascinating whale museum in the town.

Where to stay in...the Westfjords

Sunset Breidavik Westfjord
Breidavik -Photo by Kevin Pages

Jutting out of the north west corner of Iceland is the distinctive mass of the Westfjords.

This area is (in my opinion) somewhere that everybody who visits Iceland should try to see if time and weather are forgiving. The landscape is unforgettably dramatic, it has the feel of a real untamed wilderness, and it is one of the best places to see puffins up close and personal!

A trip to the Westfjords is not something that should just be done on a whim or without preparation. Driving takes around 5 hours from Reykjavik and can only be done in the summertime, as winter will leave a lot of the roads in and around the fjords inaccessible.

In addition to this, at least 1-2 days should be set aside for exploring the fjords themselves, it is a massive area with a lot of distance between towns (and gas stations!)

But for those who do make the trip, I would highly recommend stopping for the night in Isafjordur. It is the largest town in the Westfjords and a good place to pick up supplies and from which to explore the wider area.

From Isafjordur it is a few hours driving to two of my favourite places in the entire country, the spectacular waterfall of Dynjandi, and the sea bird cliffs at Latrabjarg.

The latter can be found on the south coast of the fjords, but it is worth bearing in mind that the closest gas station is an hours drive away in the town of Patreksfjordur, so make sure you top up the gas tank if you need to!

If you decide to make the drive however, in summer you will likely be greeted by the hundreds upon hundreds of puffins and other sea birds who make their nests on the immense cliffs, and a short walk along the cliffside path will take you within feet of many species of amazing birds, who are more than content to sit patiently whilst people snap photos!

Where to stay on... the Snaefellsness peninsula

Stykkisholmur Snæfellsnes Iceland
Stykkisholmur - Photo by Kevin Pages

A little way north of Reyjkavik lies the Snaefellsness peninsula.

Driving there from Reykjavik takes around 3 hours, and the entire peninsula can be driven around in a day, which makes it a perfect short trip for anybody with a day or more to fill, and truly stunning if the weather is good.

There are not as many towns and villages along Snaefellsness as in other areas of Iceland, but all of them are situated along the main road and so make for perfect places to stop whilst on a day or overnight trip.

In particular, the towns of Stykkisholmur and Grundarfjordur should be on every “to see” list.

Stykkisholmur is a busy little harbor town, and super picturesque! It also has one of the most unusual looking churches at Stykkisholmkirkja.

In addition, it is the home of one of the finest fish restaurants I have visited, called Sjavarpakkhusid. It is based right next to the docks and their produce is always as fresh and delicious as anyone could hope for!

And for anybody with an adventurous palette, a trip to Snaefellsness should not be without a visit to the shark museum at Bjarnahofn. Located on the northern coast, this museum offers a fascinating glimpse into the history of fishing in Iceland, and is one of the few remaining places which still makes Hakarl (traditional Icelandic “rotten shark”)


Where to stay... in Iceland?

Reindeer Iceland South East
Reindeer South East of Iceland - Photo by Kevin Pages

It really doesn’t matter which part of the country you decide to stay in; with such a range of options, places to stay and incredible natural wonders, you might need more than one trip around our breath-taking island.

One thing is for sure- with so much to see, you certainly won’t want to stay put in just one place and you may want to stay with us a little longer!



Travelling to Iceland?

Check our overnight tours with a driver guide that includes a one night stay in a bubble.
See Guided Tours

*Starting from ISK 74.900 per person