Iceland - Where to Stay for first time travelers

Where to Stay in Iceland for a first time visit? An insider’s guide 2024

Thinking of spending a few days in Iceland? Great idea! Read my blog and find out where to stay in Iceland and why this trip will definitely be one of your most enjoyable ones!

Iceland is a small island, as well as Europe’s westernmost country. A surprising 11% of the country is covered in ice, which is the reason why people’s opinions of whether this country is worth visiting are divided. However, those who have never researched further can’t uncover Iceland’s true beauty. Therefore, our mission is to encourage your interest and answer the question of where to stay in Iceland to ensure an enjoyable trip.

So, without any further ado, let us start the tour…

We know that different types of people require different advice on travel accommodations. This guide include the best areas for

  • the first time visitor
  • Families
  • Couples
  • Luxury & Design
  • Solo-Traveler
  • on a budget

Are you more of a visual learner/travel planner?

Lucky for you, we’ve included a map with all of our favorite neighborhoods and handpicked hotels for all of your travel needs.

Check it out below to get a better idea of where you should stay for your first or next visit to the Iceland.

This is the extension of our guide to 7 days in Iceland.

(This guide is always up to date, the last updated April 2024.)

But, first things first:

Here is the question: Where to stay in Iceland for the first time?

The answer is simple: The best starting point is Reykjavik, the so-called Bay of Smoke or simply – the capital.

Why do we recommend these areas?

Not being able to pack up the small town of Reykjavik in a few words, because it is the biggest small attraction northward, I will try to guide you and help you with which part of the city to choose for your stay. Namely, the city centre is most famous for the number of restaurants, bars and shops, as well as museums. It is incredibly rich in history and culture. Apart from featuring the most famous shopping street, Laugavegur, Midborg also has an amazing nightlife.

On the other hand, Vesturbær, or the West Town Reykjavik, offers plenty of tourist-related activities. Located in the Grandi Harbour, it’s the home of many museums, including The Living Art Museum, Saga Museum, Aurora Reykjavik Museum, and the incredible whale exhibition called Whales of Iceland.

If you are looking for where to stay on a budget during your Iceland travel, Hildar is the best place. Everything is within walking distance, plus you get the fantastic opportunity to witness the Northern Lights from there.

Here’s a full map for you to understand the different areas.

Please note: those might not be the exact names of the districts, neither its absolute borders. I just tried to simplify this information.

📍Best Area:Reykjavik
👨‍👩‍👧‍👦 Best for Families:Hótel Reykjavík Grand
👩‍❤️‍👨 Best for Couples:Farmhotel Efstidalur
💎 Best Luxury HotelHotel Borg by Keahotels
🤩 Best Design Hotel:Kvosin Downtown Hotel
😎 Best for Groups:Gamla Rif
🦸 Best for Solo-Traveller:Canopy by Hilton Reykjavik City Center
💃 Best Hotel for Nightlife:The Reykjavik Edition
🤑 Cheapest Place to stay:Kex Hostel
👌 Safest Area: Akureyri

1. Best areas and handpicked hotels for Iceland

Since everyone’s travelling requirements differ, we have included a variety of Iceland accommodations to choose from. Depending on your needs and wishes, we are certain that, by the end of the article, you will have the best answer to where to stay in Iceland!

Continue scrolling or pick your group and travel type on the menu:

1.1 Families
1.2 Couples
1.3 Luxury Traveler
1.4 Design Traveler
1.5 Groups
1.6 Solo-Traveler
1.7 Nightlife-seeking traveler
1.8 Budget Traveler

1.1 Families

Travelling with a family doesn’t have to be a challenging venture. Apart from the cozy accommodation, a very important aspect to consider when planning your Iceland vacation is the place’s vicinity. If you are searching for a place that is easily reachable, we kindly recommend sticking to Reykjavik. The capital enjoys a moderate climate throughout the year, making for a pleasant stay. Moreover, it features incredible architecture and many museums, making it perfect for exploring its culture. Some of the must-visit places include the National Museum of Iceland, Árær Open Museum, Whales of Iceland Museum and Reykjavik Maritime Museum.

Husavik is a small town on the North coast of Iceland and is also the oldest settlement. Located on Skjalfándi Bay, it offers amazing shale-watching and horse-riding opportunities. It’s a lovely little town that will immediately captivate you with its charm.

Handpicked accommodations for families

Hótel Reykjavík Grand, Reykjavik

Hótel Reykjavík Grand is one of the most stylish hotels in Reykjavik, Iceland, you will find spacious rooms with mountain or city views; you will feel relaxed and comfortable. There is a tea & coffee machine and a fridge in the room. Brasserie Restaurant is within the hotel. The wellness spa, free gym, the bar and the restaurant are almost all you possibly need.

Book Hótel Reykjavík Grand here

Private room at Hótel Reykjavík Grand

Enjoy your stay at Hótel Reykjavík Grand

Fosshotel Husavik

Fosshotel Husavik is in the heart of this place, just 1 km away from the harbour. It is perfect for a family stay due to the cozy seating area inside the rooms, the private bathroom and an in-house restaurant. It is for sure a great place to relax after a day out with your family.

Book Fosshotel Husavik here

Personal space at Fosshotel Husavik

Have a great time at Fosshotel Husavik

 1.2 Couples

If you’re a couple looking for where to stay in Iceland, you will probably want a place that will allow you to explore the area while still giving you opportunities to spend some time alone. Laugarvatn is one of the best towns, for that matter, located less than 100km from Reykjavik. Here, you can take romantic walks along the lake, visit the numerous natural attractions, and relax in The Fontana Geothermal Baths.

Reykjanesbaer is yet another such location ideal for couples, offering an experience quite different from the one above. Namely, this south Icelandic town is known for its vibrant energy. It is especially attractive for couples because of the Camping sites where staying in a rented car is a unique experience.

Handpicked accommodations for couples

Farmhotel Efstidalur

Farmhotel Efstidalur is one of the most extraordinary authentic Iceland hotels, set on a farm just a 15-minute drive from the Gulfoss Waterfall and Geyser. It offers very fresh and simple accommodation in rooms with a private bathroom. Even though it is simple, couples find it attractive because of the horseriding during summer, the traditional authentic cuisine and the outdoor geothermal bath.

Book Farmhotel Efstidalur here

Own bedroom at Farmhotel Efstidalur

Relax and unwind at Farmhotel Efstidalur

Hotel Duus by Keflavik Airport

Close to the Keflavik town and still by the airport, Hotel Duus by Keflavik Airport offers basic decor rooms and a large breakfast buffet. It is great for couples who are dashing through the Island to stay and relax before their next stop.

Book Hotel Duus by Keflavik Airport here

Single bedroom at Hotel Duus by Keflavik Airport

Have a pleasant stay at Hotel Duus by Keflavik Airport

1.3 Luxury traveler

If you’re interested in a luxury travel experience, the capital of Iceland provides the best accommodation opportunities. Apart from the world-class hotels, Reykjavik is also famous for its exclusive restaurants serving traditional fish and lamb dishes. Here, you can take long, relaxing strolls on the Laugavegur shopping street or get a taste of the nightlife, giving it a completely new meaning.

Vik is the best spot for a luxury traveller if you are interested in an extraordinary natural experience. Apart from being the best Aurora Borealis-watching spot, this city is also popular for its glaciers, dramatic natural scenery, and the subtle feel of refined urban luxury.

Handpicked accommodations for the luxury traveler

Hotel Borg by Keahotels

Hotel Borg by Keahotels at the Austurvollur Square will welcome you with brightly decorated rooms, offering quality beds, wooden floors and stylish furniture. You will certainly indulge in the Spa, gym and hot tub. There is a sauna, steam bath, and massage on request. Laugavegur shopping street is 200 metres away.

Book Hotel Borg by Keahotels here

Make yourself at home at Hotel Borg by Keahotels

Enjoy your time at Hotel Borg by Keahotels

Black Beach Suites

The first catch is the sunny terrace and the view of the sea. The second is the location, only 4 km from the beach. The rooms have a well-equipped kitchen. Black Beach Suites is a great choice, because of the privacy and fantastic positioning.

Book Black Beach Suites here

Experience comfort at Black Beach Suites

Have a wonderful stay at Black Beach Suites

1.4 Design-lovers

As a design traveller looking for the best Iceland hotels, you should consider no other place than the capital and Husavik. They offer unique opportunities to embrace the heat in the land of ice by immersing you in their thermal baths and inviting you to celebrate the Nordic solstice celebrations.

Handpicked accommodations for the design lover

Kvosin Downtown Hotel

Just behind the Reykjavik Cathedral and the Parliament, you will be welcomed at Kvosin Downtown Hotel in a modern room with a Nespresso coffee machine. You will enjoy the sights of Tjörnin Lake in the rooms with the seating area, kitchenette, and cozy beds. Continental breakfast is served in the morning, after which you can chase the vibrant urban beauties or enjoy on the ground-floor or third-floor terrace.

Book Kvosin Downtown Hotel here

Private room at Kvosin Downtown Hotel

Enjoy your stay at Kvosin Downtown Hotel

Guesthouse Maddy, Húsavik

Mesmerize in the sea views or relax with the mountain and garden view from your three-bedroom apartment at Guesthouse Maddy, equipped with a kitchen, dining area, and 2 bathrooms. You are located 47 km from the Godafoss Waterfall and 2.7 km from the Husavik Golf Club. Here, creativity, delight, and impressions are at the highest level.

Book Guesthouse Maddy here

Personal space at Guesthouse Maddy

Have a great time at Guesthouse Maddy

1.5 Groups

Snaefellsbaer is best if you travel as a group, especially if you are interested in experiencing the unforgettable hiking on Robbenstrand and Gatklettur.

Akureyri, on the other hand, offers an amazing getaway to come to interesting locations, especially if you’re interested in skiing and fishing. The city is set on the banks of a fjord, offering the most scenic views you’ve ever witnessed!

Handpicked accommodations for groups

Gamla Rif, Snæfellsnær

Set on an over 120-year-old farmhouse and renovated into a coffee house afterwards, Gamla Rif offers rooms with a great sea view, a shared kitchen, and a shared lounge. There are also shared bathroom facilities. This place is great for relaxation after a long day spent hiking.

Book Gamla Rif here

Own bedroom at Gamla Rif

Relax and unwind at Gamla Rif

Hotel Akureyri Dynheimar

As for a group traveler, Hotel Akureyri Dynheimar is a very convenient accommodation to enjoy the evening in the rooms equipped with a minibar and electric kettle, shower, and free toiletries. The hotel is very close to the skiing facilities and is only 3 km away from the airport.

Book Hotel Akureyri Dynheimar here

Single bedroom at Hotel Akureyri Dynheimar

Have a pleasant stay at Hotel Akureyri Dynheimar

1.6 Solo-travelers

For a solo traveller, it’s best to have a brief glimpse into as much as you can during your Iceland travel. Therefore, being the central cultural and historic area, Rejkavik is the best place to visit. If you’re looking for a more remote experience, then Husavik is just a suitable destination, providing a variety of cultural and recreational adventures.

Handpicked accommodations for a solo traveler

Canopy by Hilton Reykjavik City Center

Canopy by Hilton Reykjavik City Center boasts a variety of amenities, including a fitness centre and bar. A buffet breakfast is available every morning. The room is minimalist and has a private bathroom with a desk, and a seating area is also included. Authentic dishes can be tasted at the hotel restaurant. The most important aspect is that you are a 2-minute walk from Laugavegur shopping street and 500 metres from Harpa Concert & Conference Center, making this one of the best answers to where to stay in Iceland.

Book Canopy by Hilton Reykjavik City Centre here

Make yourself at home at Canopy by Hilton Reykjavik City Centre

Enjoy your time at Canopy by Hilton Reykjavik City Centre

Husavik Green Hostel

Husavik Green Hostel is unlike anything you’ve ever seen or imagined. It is a sustainable, eco-friendly hostel with a lively atmosphere. The spacious dorms have bunk beds, while others are private double rooms. It is located in the very centre of Husavik, which is more than close to whale-related activities. Enjoy!

Book Húsavík Green Hostel here

Experience comfort at Húsavík Green Hostel

Have a wonderful stay at Húsavík Green Hostel

1.7 Nightlife Traveler

Interested in immersing in the best of this country’s nightlife? There’s no better answer to where to stay in Iceland than its capital! Reykjavik is simply the best for experiencing the vibrant nightlife, as it has plenty of restaurants and bars, such as Prikið ehf., Lebowski Bar, or The English Pub.

Akureyri is yet another popular location for nightlife-seekers, given the variety of bars and clubs that are great for partygoers.

Handpicked accommodations for nightlife

The Reykjavik Edition

A modern and luxurious experience for a nightlife-seeking traveler. The Reykjavik Edition is a perfect choice! This is a great jump-off point not only for enjoying the nightlife but also for exploring all the essential city spots. You will be within driving distance of the Blue Lagoon and Northern Lights visible in winter. Sophisticated bedrooms, a view of the harbor, and a rich culinary offer will make your stay glam.

Book The Reykjavik EDITION here

Private room at The Reykjavik EDITION

Enjoy your stay at The Reykjavik EDITION

Centrum Hotel

Centrum Hotel features brightly decorated rooms, a private bathroom and a tea and coffee lounge in the central part of Akureyri. It is close to a public swimming pool, a great location from where you can start a day walk or a nightlife adventure.

Book Centrum Hotel here

Own bedroom at Centrum Hotel

Relax and unwind at Centrum Hotel

1.8 For the Budget Traveler

It was not in vain when we claimed Reykjavik as the best answer to where to stay in Iceland. Namely, the astounding city is also suitable for budget travellers, offering decent cost accommodation and amazing attractions close by. Regardless of whether want to avoid the tourist crowds and go somewhere more relaxing, Selfoss is your alternative. Here, you can visit the Golden Circle, admire the Gullfoss Waterfall, and taste the most delicious hot dogs at Pylsuvagninn Selfossi.

Handpicked accommodations for budget traveler

Kex Hostel

Kex Hostel offers guest and dormitory rooms in the centre of Reykjavik, close to the main shopping street and Harpa- Concert and Conference Hall. Some of the rooms have private bathrooms. There is a communal kitchen, a buffet breakfast is available in the morning, and other meals are served in the Flatus Restaurant, which is within the hostel. There is also a Drinx Bar where you can attend events happening from Thursday to Saturday.

Book Kex Hostel here

Make yourself at home at Kex Hostel

Enjoy your time at Kex Hostel

Guesthouse Henia Bed & Spa

A perfect accommodation in the nice town of Selfoss, only 43 km away from the National Park Thingvellir. Guesthouse Henia Bed & Spa offers rooms with a private bathroom, and the accommodation provides a guest seating area and a garden. Outdoor furniture is also available, as well as a coffee machine. All the rooms have a nice mountain view.

Book Guesthouse Henia Bed&Spas here

Experience comfort at Guesthouse Henia Bed&Spas

Have a wonderful stay at Guesthouse Henia Bed&Spas

2. Best Neighborhood to Stay in Iceland


It is the most preferred city for tourists to stay in. Everything that you can do in Iceland is there or a short trip away from the capital city.


This is a town on the northern coast of Iceland that has gained international publicity as the best place to see whales.


It is a town well-known for its dramatic coastal scenery, glaciers and some natural beauties. Here, the Northern Light view is stunning.


Akureyri is a city set on the banks of a fjord and a getaway to some of the most natural beauties of the northern areas of the country.

3. FAQs

What is the best neighborhood to stay in Iceland?

The best neighborhood to stay in Iceland depends on your preferences and travel goals. Reykjavik is often recommended for its central location and vibrant atmosphere, offering easy access to many attractions. Other options like Husavik, Vik, and Akureyri are also popular for their unique experiences, such as whale-watching, dramatic coastal scenery, and fjord views.

Where should you not stay in Iceland?

While there isn't a specific area you should completely avoid, some travelers might prefer to stay away from extremely remote locations if they seek more amenities and accessibility. It's essential to consider your preferences and the activities you want to engage in, as Iceland offers a diverse range of accommodations and landscapes.

What should I avoid in Iceland?

When in Iceland, it's advisable to avoid disturbing natural environments, respecting local customs and wildlife. Additionally, be cautious about unpredictable weather conditions and plan activities accordingly. While Iceland is generally safe, it's essential to stay informed about potential natural events and follow safety guidelines.

Where should I stay in Iceland for the first time?

For first-time visitors to Iceland, Reykjavik is often recommended as the best starting point. The capital city provides a central location, cultural attractions, and a variety of accommodations. Areas like Midborg and Vesturbær offer proximity to landmarks, museums, and a taste of Icelandic nightlife, providing an ideal introduction to the country.

4. Map + All Sights

Iceland is a stunning island country in the North Atlantic Ocean, and we have the perfect map to help you plan your trip. Our map shows you the best places to visit in Iceland, from the natural wonders of volcanoes, geysers, and glaciers, to the historic and cultural sites of the Viking age and the sagas.

You can choose from different types of accommodations that suit your budget and preferences, whether you want to stay in a modern hotel, a traditional farmhouse, or a cozy cabin. You will have an unforgettable experience discovering the beauty and diversity of Iceland, no matter where you stay. Your dream island vacation begins with the perfect accommodation.

Summary of where to stay in Iceland

Using this detailed guide about where to stay in Iceland, you can have a great exploring experience. Easy and relaxing.

If you need some more inspiration for travelling destinations, check out the rest of my blogs.

Other European Destinations

Before you run off, here is a few more handwritten articles for you. These will help you to find more unique experiences and enjoy your holidays at fullest.

Any Questions?

There you have it. I hope you have no questions and found your home in my home town.

However, please remember: I am not perfect, and it is likely I missed a few things to point out.

Therefore: Do you have questions? Is anything not clear?

Please please please drop me a comment below with your email! I will reply to you ASAP via email and here in the comments.

In fact, your questions help me to make this article better. So I help you to help me.

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