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Where To Stay In Iceland For First Time Visitors

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If you’re busy planning your first trip to Iceland and are wondering where to stay, then we’ve got you covered with this useful guide all about where to stay in Iceland for first time visitors.

You’ll learn about three popular areas in Iceland: Reykjavik, the Golden Circle and Vik, including what there is to do in each area and top Iceland hotels to consider.

We hope you find it useful – but most importantly, we hope you enjoy your trip!

If it’s dramatic landscapes, towering waterfalls, interesting culture and the Northern Lights that you’re after then we can think of nowhere better. Iceland is one of our favourite countries, and as we got engaged there, it holds such a deep place within both our hearts. 

We hope you’ll make just as many magical memories during your own trip and we’re thrilled to be able to share some of our Iceland travel tips and inspiration with you to help you do so. Let’s get to it!

At-A-Glance: Where To Stay In Iceland For First Time Visitors

Where? The Golden Circle
Why? You’ll be close to popular sights in Iceland and will increase your chances of seeing the Northern Lights. Also, what could be better than sleeping in a cosy cabin out in the countryside?
Top Golden Circle Cabins: Blue View Cabins | Heima Holiday Homes | Austurey Cottages
Where? Hlemmur in Reykjavik
Why? You’ll be within walking distance of top attractions, bars, restaurants and museums in Reykjavik and will easily be able to find a good priced hotel with free parking and breakfast included.
Top Reykjavik Hotels: Center Hotels Plaza | Skuggi Hotel | Tower Suites Reykjavik


Where to stay in Reykjavik

Reykjavik is Iceland’s capital. It’s a small city, which means you can easily see the top sights in just one or two days before moving on to see the rest of Iceland like the Golden Circle, Ring Road, South Coast and beyond. 

Although the city has an airport, you’re likely flying into Keflavik Airport, which is actually about an hour south of Reykjavik. We recommend hiring a car if you can to make things easier. This is the local car rental company we suggest using.

That said, Reykjavik is a very walkable city, so once you’ve arrived and parked up, you shouldn’t feel the need to use your car again unless you’re going further afield or grocery store shopping. 

If you’re heading out on a Northern Lights group tour, then Reykjavik is also convenient for most hotel pickups. 

Don’t Miss In Reykjavik

Whether you’re here for just one night or two (or longer), here are the top must-sees when staying in Reykjavik:

  • Hallgrimskirkja: The largest church in Iceland with a 360-degree viewing platform.
  • Harpa Concert Hall: An iconic Iceland landmark and home to the Iceland Symphony Orchestra.
  • Sólfarið (Sun Voyager Sculpture): Famous artwork overlooking the ocean to commemorate Reykjavik’s 200th anniversary.
  • Street Art: Reykjavik is one of the most famous cities in the world for street art.
  • Northern Lights Tours: Get picked up from your hotel in Reykjavik and follow the professionals in search of the elusive Aurora Borealis.

Where To Stay In Reykjavik

Despite being a small city, there are several different areas you can stay in. 

Most of our Reykjavik hotel selections are in and around Hlemmur because we think this is the best area to stay in Reykjavik.

In 2017, this area of the city underwent a major overhaul and rejuvenation, bringing with it a vibrant community full of restaurants, bars, hotels, shops and museums. 

As this area isn’t smack bang in the middle of Reykjavik, it’s comparatively cheaper. Yet it’s still within a short walking distance of most top sights in Reykjavik and with easy bus links to take you further out. 

We’ve indicated next to each hotel how far it is to walk to popular tourist sights in Reykjavik so you can gauge for yourself how convenient the location is. 

Other than walking distance, price and reviews, we’ve also focused on hotels that offer free parking and breakfast for both convenience and to help with costs.

Top Reykjavik Hotels

So… with all that said, here are our top picks of Reykjavik hotels.

Center Hotels Plaza – in Reykjavik’s centre, 10 minutes from Harpa Concert Hall

Center Hotels Plaza is a 3-star hotel within Reykjavik’s city centre and is just a ten-minute walk from Harpa Concert Hall. The rooms are modern, light and airy while the hotel has a good-sized bar and lounge. Check prices on Booking.com >>

Skuggi Hotel by Keahotels – near Hlemmur, 10 minutes Sun Voyager and Hallgrimskirkja

Skuggi Hotel is a 3-star hotel and is part of the Keahotels chain. It’s near the bustling area of Hlemmur so is close to a myriad of bars, restaurants and shops, as well as popular tourist spots in Reykjavik. The rooms are simple, modern and classic while the hotel has a huge bar/lounge area. Check prices on Booking.com >>

Tower Suites Reykjavik – near Hlemmur and Tún, 15 minutes from Sun Voyager

Tower Suites Reykjavik is a luxury 4.5-star hotel in between the Hlemmur and Tún districts. Although a little further out than some of the other hotels mentioned, it’s still within walking distance of top tourist sights in the city. The luxurious suites have a mixture of city and sea views while some rooms have freestanding baths with yet more superb views. Check prices on Booking.com >>

Views of Reykjavik from the water

Hotel Orkin – in Holt, 20 minutes from Hallgrimskirkja

Hotel Orkin is a charming 3-star hotel in Holt and is just a 20 minute walk from Hallgrimskirkja. The rooms are simple but comfortable and cosy while there’s access to a free continental breakfast every morning in the spacious downstairs lobby. Check prices on Booking.com >>

22 Hill Hotel – in Holt, 20 minutes from Hallgrimskirkja

22 Hill Hotel is a lovely 3-star hotel in Holt and is also a 20 minute walk from Hallgrimskirkja. While slightly further out of the city than other hotels, you’ll massively save on cost for a comfortable stay. The downstairs lobby is tastefully decorated and full of cosy reading nooks and seating areas. Check prices on Booking.com >>

Hotel Lotus – in Háaleiti N, 30 minutes from Hallgrimskirkja

Hotel Lotus is a small 3.5-star hotel in Háaleiti N. While much further out than the above hotels, it’s still only a 30 minute walk from Hallgrimskirkja and convenient for buses into the city centre. The rooms are simple but clean and comfortable, while the hotel has a good-sized dining area downstairs, which serves a free continental breakfast each morning. Check prices on Booking.com >>

Reykjavik Lights by Keahotels – in Laugardalur, 20 minutes from the Icelandic Phallological Museum

Reykjavik Lights is another 3-star hotel from the Keahotels chain. It’s the furthest out of all our Reykjavik hotel recommendations but is convenient for buses and for those of you who only plan on being in Reykjavik for a couple of nights before seeing more of Iceland. The rooms are bright, modern and airy, while the hotel has a spacious and rather chic lobby downstairs. Check prices on Booking.com >>

The Golden Circle

Where to stay in Iceland Golden Circle

Nicknamed ‘The Land of Ice and Fire’, Iceland is a dramatic mix of snow-capped mountains, jet-black beaches, roaring waterfalls, erupting geysers, glistening lakes and more.

And where can most of this dramatic scenery be found? Why within the Golden Circle of course!

The Golden Circle is also where you’ll find many iconic Iceland landmarks, and because of the small amounts of light pollution, it’s one of the most perfect areas in Iceland for Northern Lights hunting.

And because you’ll be staying within the Golden Circle itself, you’ve already just increased your chances of seeing the Northern Lights tenfold. Unless you’re visiting in the summer, of course!

Don’t Miss In The Golden Circle

There are so many highlights of the Golden Circle. Here are the ones you positively can’t miss:

  • Gullfoss: One of the most famous waterfalls in Iceland and where the Golden Circle gets its name (Gullfoss = “Golden Falls”).
  • Geysir Geothermal Area: Hot springs at every turn and home to the almighty Strokkur Geysir (aka The Churn), which erupts every few minutes and by over 20 metres each time.
  • Thingvellir National Park: Home to stunning walking routes including the chance to walk through two tectonic plates and see yet more waterfalls and glistening lakes.
  • Secret Lagoon: A completely natural hot spring you can bathe in. It’s also cheaper and less busy than the Blue Lagoon.
  • Kerid Crater: A deep volcanic crater that is filled with bright blue water.

Where To Stay In The Golden Circle

The Golden Circle stretches for some 155 miles, so it can be tricky to know where is best to stay in the Golden Circle. 

Truth be told, you can’t really get it wrong. Just as long as you find somewhere free from light pollution and not too far from the top Golden Circle attractions then you should be happy with your choice.

But there’s another absolute must when it comes to staying in the Golden Circle – renting your own cabin!

Staying in your own private cabin (some even come with hot tubs!) out in the depths of the Golden Circle is one of the major reasons why you would venture out this way.

Golden Circle Cabin in Iceland
View from inside our Golden Circle Iceland cabin

Top Golden Circle Cabins

So without further adieu, here are our favourite Golden Circle cabins to stay in:

Icelandic Cottages – near Selfoss

The Icelandic Cottages are a group of luxurious 4-star cabins in between Selfoss and Flúðir (where the Secret Lagoon is). Although they’re about an hour away from Gullfoss, the cottages are conveniently located for those of you who want to see the highlights of both the Golden Circle and the South Coast. The cottages themselves are spacious, modern, fully equipped and ideal for those of you travelling in a small group or as a family. Check prices on Booking.com >>

Austurey Cottages – near Laugarvatn

The Austurey Cottages are another set of charming cabins, this time 3-star ones and close to the hot springs of Laugarvatn. The cabins are spacious and bright with small kitchenettes and patios for cosy nights in. Check prices on Booking.com >>

Blue View Cabins – near Reykholt

Although smaller than the two cabin groups mentioned above, the 3-star Blue View Cabins are right in the heart of the Golden Circle and are ideal for those of you on a budget. The cabins are simple yet comfortable and cosy – and even come with private hot tubs outside for romantic nights under the Northern Lights. Check prices on Booking.com >>

Hekla Cabins – near Hella

The Hekla Cabins are a group of comfortable 3-star cabins close to Hella. This makes them perfectly situated for both Golden Circle and South Coast itineraries. The cabins are simple but comfortable and have large windows overlooking the surrounding countryside. Check prices on Booking.com >>

Heima Holiday Homes – near Selfoss

The Heima Holiday Homes are a group of modern 3-star cabins, which have tons of room inside and are surprisingly cheap considering the quality of accommodation you’re getting. These cabins are also in between Selfoss and Flúðir for seeing the best of Iceland’s scenery. Check prices on Booking.com >>


Where to stay in Vik: Vik in the snow

Found along Iceland’s South Coast, Vik (aka Vík í Mýrdal) is a remote seafront village.

Its most famous claim to fame is its black sand beaches that are home to ancient rock formations akin to what you’ll see at Giant’s Causeway in Northern Ireland

But it’s also a convenient place to stay if you want to embark on a South Coast Iceland itinerary to see stunning waterfalls and yet more black sand beaches.

If you’re after a more low-key Icelandic experience while still having access to a few local shops and restaurants on your doorstep then Vik is one of the best places to stay in South Iceland.

Don’t Miss In Vik

When staying in Vik, you simply cannot miss seeing:

  • Vik Black Sand Beach: Home to black sand and ancient rock formations.
  • Vík í Mýrdal Church: Iconic Iceland landmark with stunning views across Vik.
  • Icelandic Lava Show: Where you can see a simulated volcanic eruption and take home a piece of lava rock as a souvenir.
  • Solheimasandur Plane Wreck: Black sand beach home to a plane wreck from the 1970s (it’s a 20-minute drive from Vik).
  • Skógafoss: Famous waterfall on the South Coast with a viewing platform (it’s a 30-minute drive from Vik).

Top Vik Hotels

As Vik is a small village, there’s not a huge amount of choice on where to stay. However, our pick of Vik hotels are beautiful and come highly rated by other guests.

Hotel Vík í Mýrdal

Hotel Vík í Mýrdal is a beautiful 3.5-star Art Deco hotel with bright and airy rooms; most come with stunning views of Vik and the surrounding countryside. The lobby downstairs continues the bright and airy theme while there’s also a gym onsite. Check prices on Booking.com >>

Vik Apartments

The Vik Apartments are a group of large self-contained 3.5-star apartments, which all have balconies or patios. These apartments are perfect for those of you travelling in a group or as a family. Check prices on Booking.com >>

Hotel Kria

Hotel Kria is a beautiful 3-star hotel close to Vik. Although it’s a little outside of the main village, the views across the countryside are unparalleled. There’s a large restaurant onsite, as well as various bar and lobby areas, while the rooms are chic and modern. Check prices on Booking.com >>

FAQs About Where To Stay in Iceland

In case you’re still not sure about where to stay in Iceland for your trip, here are our answers to some frequently asked questions. They might just help you make that final decision (hopefully!)

Where do most people stay when visiting Iceland?

Most people choose to stay in Reykjavik, Iceland’s capital city, because this is seen as the “gateway to Iceland”. While Reykjavik is ideal for those of you visiting Iceland for a short time (say one or two days), you’ll end up doing a lot of driving back and forth if you’re staying in Iceland for longer (say five to seven days). Instead, we’d recommend staying in a cabin in the Golden Circle, which is where many of the top attractions in Iceland can be found. And just look at the view we had from our cabin:

Sunset in Iceland from our Golden Circle cabin

Should you stay in the north or south of Iceland?

Whether you stay in the north or south of Iceland depends on what you want to include in your itinerary. If it’s your first time in Iceland or you have limited time there, then we’d recommend staying in the south. This way, you can spend time exploring the Golden Circle, Reykjavik and the south coast where black sand beaches and waterfalls await. If you’re spending longer in Iceland or you’ve been before, then you might want to drive the Ring Road and stay in various places around the country (in both the north and south).

Can you stay in Reykjavik and see all of Iceland?

While technically, yes, you can stay in Reykjavik and see all the best bits of Iceland, you’ll do a lot of driving back and forth, which isn’t a great use of your sightseeing time. If you want to see more of Iceland than just Reykjavik and the Golden Circle, then you might want to stay at various locations dotted around the Ring Road.

Where is best to stay and see the Northern Lights in Iceland?

To see the Northern Lights in Iceland, you’ll need to stay somewhere that’s free from light pollution. We recommend staying in a cabin in the Golden Circle (there are plenty to choose from) to increase your chances of seeing the Northern Lights. Alternatively, you could stay in Reykjavik, but you’d need to either go on a Northern Lights tour or drive into the countryside to experience the best of the aurora borealis.

That said, either way, it’s not guaranteed you’ll see the Northern Lights during your trip. Remember: you’ll likely only see them during the colder months between September and April. During our first trip to Iceland in March, we saw the Northern Lights from the hot tub outside our Golden Circle cabin, but they were very faint. More like wispy green clouds than anything else. Still amazing, though!

Faint Northern Lights in Iceland

Where is best to stay in Iceland to see the Blue Lagoon?

If you want to visit Iceland’s infamous Blue Lagoon, then you can either stay in the Golden Circle, near Keflavik airport or in the city of Reykjavik. Most people stay in Reykjavik and drive to the Blue Lagoon, which takes roughly 45 minutes.

But if you want a more authentic Iceland hot spring experience, why not consider visiting the Secret Lagoon in Flúðir near the Golden Circle instead? This hot spring is natural rather than manmade and much cheaper than the Blue Lagoon.

Secret Lagoon, Iceland in March

Where is best to stay in Iceland for waterfalls and nature?

All of Iceland is stunning when it comes to waterfalls and natural beauty, so you can stay pretty much anywhere. If it’s your first trip to Iceland, then you might want to consider staying in the Golden Circle or Vik (a town on the south coast of Iceland). Both of these locations are near some incredible sights, such as the Gullfoss waterfall, Geysir Geothermal Area, Skogafoss waterfall, black sand beaches and more.

Skogafoss waterfall from above

Plan Your Trip To Iceland

So, now you know where to stay in Iceland, take a look at our other Iceland travel blogs to help you with the rest of your travel planning:

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Justine Jenkins

Justine is one half of the married couple behind the Wanderers of the World travel blog. She lives in Bristol, UK and has travelled extensively within Europe and beyond since 2013. After her trips, she shares detailed travel itineraries, helpful travel guides and inspiring blog posts about the places she's been to. When she's not travelling overseas, you'll find her joining her husband, Scott on various day trips, weekend getaways and walks within the UK, which she also writes about on Wanderers of the World. Aside from travelling and writing, she also loves reading, crafting and learning about nature.

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