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Where to Stay in Iceland: Lodging Tips

If you enjoy staying in smaller properties with a personal touch, you’ll appreciate Iceland’s ubiquitous guesthouses. These cozy, family-owned accommodations are scattered all over the country and are even more common here than traditional hotels. They range from relatively luxurious bed and breakfasts to simple cottages overlooking a sheep or horse farm.

Besides guesthouses, Iceland’s accommodation options include hotels, vacation rentals, farmstays, hostels and campgrounds. Which ones are right for you? Read on.

Iceland Hotels

The bulk of Iceland’s hotels are located in the greater Reykjavik metropolitan area, with others scattered around other major cities and towns. Once you get out into the countryside, you’re much more likely to encounter smaller guesthouses, discussed below. There are few familiar international chain hotels here; Hilton and Best Western each have an outpost in Reykjavik, while Radisson Blu has two.

Iceland does have a few homegrown chains. Icelandair operates nine properties, most in the southwestern part of the country, each rated with three or four stars. Fosshotel offers 11 properties (most with three stars) in a mix of urban and rural locations.

Icelandic hotels tend to feature clean and simple design, without a lot of frills. Breakfast often costs extra. For a little more space, consider booking an apartment hotel like the luxurious Black Pearl in Reykjavik, where all suites include fully equipped kitchens, living/dining rooms, terraces and daily housekeeping. Reykjavik4you Apartments are a more affordable but still stylish option, offering studio, one-bedroom and two-bedroom apartments with full kitchens.

There are several chic boutique options as well, mostly in the capital. For example, the 101 Hotel in Reykjavik is a modern design hotel with a gallery of cutting-edge contemporary art. The recently opened Ion Hotel near Thingvellir National Park bills itself as a “luxury adventure hotel” and will arrange glacier tours, kayaking excursions and horseback rides.


Iceland Guesthouses

Get outside the capital city and you’re almost certain to find yourself staying in at least one guesthouse; in the most remote parts of the country, they may be your only option. Often run by families, guesthouses in Iceland tend to be smaller than hotels — some have as few as one or two rooms — and relatively affordable. Amenities such as private bathrooms, free Wi-Fi and in-room TVs may or may not be offered.

As guesthouses in Iceland can vary quite widely, it’s important to read reviews before booking. In urban areas you’ll find properties like Guesthouse Sunna, a 51-room inn conveniently located across the street from Hallgrimskirkja, with singles, standard doubles, studios and suites (some with ensuite bathroom). But in some rural areas you may find yourself staying at a place like the Grimsstadir Guesthouse in Myvatn, where travelers find themselves in the spare room of a farmhouse, just down the hall from the owners. Offering more privacy is Baenir & Braud, a homey B&B in a small town on the Snaefellsnes Peninsula.

Most guesthouses offer complimentary breakfast, including fruit, bread, skyr (the local yogurt), cereal, meat and cheese. Many also offer kitchens, either private or communal, for guest use.

One of the perks of staying at a guesthouse is the personal touch. Many guesthouse owners enjoy chatting with visitors, offering an authentic window into local life. But keep in mind that properties with a small staff may have firm check-in and check-out times; they may not be as flexible as a hotel if you arrive after the owner has gone to bed. Also, note that some guesthouses close during the winter off-season.


Iceland Farmstays

As you’re driving around Iceland, you may get the urge to get a little closer to all those horses, sheep and cows grazing in the fields. If you want to check out what life is like on an Icelandic farm — or just enjoy some rural peace and quiet — consider a farmstay.

As with guesthouses, lodging at farms tends to be small and sometimes quite basic; often you’ll stay in a cottage apart from the main farmhouse. Don’t expect to help out with farm chores, though many owners will be happy to answer any questions you might have. Some farms even do demos for guests, such as Bjarteyjarsandur in the west, where you can learn about lambing and sheep shearing. At other farms you can go horseback riding or visit a geothermally heated greenhouse.

Farm lodgings often overlap with other types of Icelandic accommodations, especially guesthouses and self-catering cottages. offers a comprehensive listing.


Rental Houses and Apartments

There are hundreds of apartments and houses to rent across Iceland, ranging from stylish flats in Reykjavik to summer cottages in the Golden Circle. Many are modern and spacious with creature comforts such as flat-screen TVs and free Wi-Fi, while others are simple, cozy cabins with hot tubs under the stars.

A vacation rental is a good choice for families or groups of friends who want a little extra space or for those who want the flexibility to cook for themselves and come and go as they please. Again, be sure to read reviews carefully if you’re looking for certain amenities such as dishwashers, laundry facilities or Internet access. Note that minimum stays may apply, especially during peak times of the year.


Iceland Hostels

Hostels offer affordable lodging on what can be a very expensive island. Even if you’re not up for sleeping in a dorm, it’s worth checking out hostels for basic private rooms (usually with shared bath).

Hostelling International runs more than 30 properties across the country in key destinations such as Reykjavik, Akureyri and Laugervatn. (Non-HI members pay more at these properties; you can become a member upon arrival.) Other independent hostels can be found at sites such as or


Camping in Iceland

Camping is an affordable and scenic way to experience Iceland in the warmer months. lists more than 150 campgrounds with varying levels of service, from simple tent sites to larger facilities with bike rentals and swimming pools.

If you’re planning to camp for more than a few nights, consider purchasing the Camping Card. For a single flat fee, cardholders can stay at participating campsites for up to 28 nights. The card can be used toward tent or motorhome camping.


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