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Where to stay – the best places to rest your head after a day of exploring Reykjavik

Find a place to stay

As Iceland’s main tourist destination, Reykjavik has no shortage of options when it comes to accommodation. Whether it’s a shoe-string hostel, swanky, boutique hotel or rustic guesthouse, you are sure to find exactly what you are looking for somewhere in the city. Below is a guide to Reykjavik’s neighborhoods, and what each of them offers, to help you choose the best place to stay in the city.

Sigurthor Marteinn

My Destination local expert on


Downtown 101


Downtown is the true nerve-centre of Reykjavik, the beating heart which pumps life into the city’s every street. For those looking to soak up the energy and culture of the most buzzing and bustling neighborhood should without a doubt set up camp here. With the majority of the city’s restaurants, cafes, bars and clubs, as well as shopping mecca, Laugavegur Street to offer, Downtown is the ideal location for the dedicated city slicker. The majority of the accommodation options here are of the sleek, contemporary hotel variety, with chic apartments also available for those staying for longer periods. That said, Downtown has no shortage of cheaper, backpacker friendly hostels and charming guesthouses hidden in its backstreets.




Kopvaogur is Iceland’s second largest city and borders the capital. It is a popular destination for holidaying families, due to its quieter atmosphere and wealth of attractions, including a large amusement park. Accommodation options here consist mainly of comfortable hotels and guesthouses, many of which are family-run.




This is the ideal area of Reykjavik for those looking to relax and unwind by the sea. A small, coastal neighborhood, Seltjarnarnes boasts stunning, ocean scenery and an incredible array of birdlife. With miles of rolling paths to hike and explore, this is Reykjavik at its most chilled out. Hotels in this area are not common, and the accommodation choices are mainly specially- converted apartments by the sea. This is the perfect setting for a secluded stay within touching distance of the city center.




Populated by a fairly young crowd and popular with students, Hlíðar is a good location for those looking to stay cheaply, within walking distance of the city center. The area itself is notable mainly for Perlan, a renowned landmark and restaurant, which boasts an incredible view across Reykjavik. However, it also offers a range of budget accommodation options, including many hostels and guesthouses. Hlíðar’s proximity to the 101 district make it a cost-effective alternative to staying centrally.