Where to Stay in Reykjavik [No Stress Guide 2018]

Reykjavik is a small and compact city that packs a big punch. Combine it’s colourful and impressive architecture with its trendy restaurant and club scene – not to mention it’s lush natural surrounding – and you get a once in a lifetime travel experience!

But a trip to Iceland doesn’t come cheap. Reykjavik is one of the most expensive cities in the world for travellers.

Which is exactly why we created this insider guide of where to stay in Reykjavik! 

Written by our team of travel-pros, this insider guide features some unbelievable neighbourhoods and some of Reykjavik’s some hidden gems.

This guide is designed to help YOU find the best place to stay based on your interests. By the end of this article, you’ll be able to book an awesome hotel in an awesome neighbourhood – guaranteed!

These are our best picks for where to stay in Reykjavik.

Additional reading – 20 Coolest Things to Do in Reykjavik, and also the 17 Greatest Hotels in Reykjavik

Where to Stay in Reykjavik

Quick Tips – Where to Stay in Reykjavik

Where to Stay in Reykjavik

Looking for a specific place to stay? These are our highest recommendations for places to stay in Reykjavik.

Best Budget Hotel in Reykjavik – Brim Hotel

Brim Hotel

Brim Hotel is the best budget hotel in Reykjavik

Brim Hotel is our favourite budget hotel in Reykjavik. This four-star hotel is situated in Hlíðar a short walk from the city’s top attractions. It has a convenient tour desk and ticket service on site. And all rooms have blackout curtains – a must if you’re visiting during those endless summer nights.

 

Best Mid-Range Hotel in Reykjavik – City Centre Hotel Reykjavik

City Centre Hotel Reykjavik

City Centre Hotel Reykjavik is the best mid-range hotel in Reykjavik

A central location and range of amenities are just two of the reasons City Centre Hotel Reykjavik is our top recommendation for a mid-range hotel in Reykjavik. This three-star hotel is close to restaurants, museums and shops. Rooms are charming, comfortable, and come with all the essentials for a great stay.

 

Best Luxury Hotel in Reykjavik – Icelandair Hotel Reykjavik Marina

Icelandair Hotel Reykjavik Marina

Icelandair Hotel Reykjavik Marina is the best luxury hotel in Reykjavik

Icelandair Hotel Reykjavik Marina is centrally located in Vesturbær. It is close to restaurants, bar, museums and nightclubs.

This comfortable four-star hotel has 108 themed rooms outfitted with modern amenities. Guests can enjoy the on-site gym and wellness centre, as well as the stylish restaurant and cosy lounge bar.

 

Reykjavik Neighbourhoods Guide

Reykjavik is one of the hottest destinations for travellers – and for good reason! It has unbelievable architecture, world-class restaurants, wild clubs and unparalleled views, all packed into less than 275 square kilometres.

Comprised of a compact city centre surrounded by sprawling suburbs, only a few of Reykjavik’s neighbourhoods are of great interest to travellers.

Hotel Jules Insider Tip

Even if your travel plans will take you outside of the city, you’re going to want to stay close to downtown to take advantage of all that this eclectic and quirky city has to offer.

Miðborg is the heart, soul and centre of Reykjavik. The city’s downtown core also referred to as 101, is where you’ll find the majority of Reykjavik’s shopping, bars, restaurants and attractions. Lively and vibrant, this part of the city is fun both day and night.

West of the city centre is Vesturbær. A little bit quieter than downtown, this area is far from boring. In fact, it’s one of the coolest places to stay in the city thanks to its chic boutiques, and trendy and instagrammable cafes.

East of the city are the Hlíðar and Laugardalur neighbourhoods. Mostly residential these neighbourhoods are where you can find respite from the lively city centre. They are also where you can find cheaper accommodations, which is quite the feat in ultra-expensive Iceland.

Whether you’re a party owl looking to dance the night away, a culture vulture seeking to tick off the city’s top sights, or something in between, there is a neighbourhood in Reykjavik that’s perfect for you!

Reykjavik’s 5 Best Neighborhoods to Stay in

Now let’s take a look, in greater detail, at the best neighbourhoods to stay in Reykjavik. Each is a little different from the last so be sure to check out which is right for you!

Neighborhood #1 - Miðborg

(Where to stay in Reykjavik for your first time)

Miðborg, Reykjavík

Miðborg is our pick for where to stay in Reykjavik on your first time

Miðborg is the neighbourhood at the centre of Reykjavik. It is where you’ll find the city’s most iconic attractions as well as the most Instagram-worthy spots.

The most famous landmark in Reykjavik is Hallgrimskirkja. Standing nearly 75 meters above Reykjavik, the church spire can be seen from almost any point in the city. A popular destination for photographers, visitors can ride the elevator to the viewing deck to take in panoramic views of colourful Reykjavik, the sea and surrounding mountains.

But there’s much more to Miðborg than this architectural gem.

The cultural and commercial hub, this downtown neighbourhood is where you’ll find Laugavegur, a colourful thoroughfare that is home to great restaurants, trendy bars and a wide variety of interesting boutiques.

Easily navigated on foot, Miðborg is the best place to stay in Reykjavik if you’re visiting for the first time, or you want to stay at the centre of the action.

Things to See and Do in Miðborg

  • Explore Iceland’s rich and diverse history at the National Museum of Iceland.
  • Take a stroll around Lake Tjörnin, a scenic green space at the heart of the city.
  • Stand in awe of the imposing Hallgrímskirkja, the tallest building in Reykjavik.
  • Walk along the water’s edge and see the Sun Voyager statue.
  • Shop for Icelandic goods and souvenirs at the Kolaportið Flea Market.
  • Snack on one of Iceland’s favourite foods, the hot dog, at the world-famous Bæjarins Beztu Pylsur hot dog stand.
  • Dine on delicious dishes made of Salmon, puffin, lamb and more at Apotek Restaurant.

Where to Stay in Miðborg

Best Budget Hotel in Miðborg – Hotel Fron

Hotel Fron

Hotel Fron is the best budget hotel in Miðborg

Conveniently located in the heart of Reykjavik, this hotel is close to restaurants, bars, clubs and cafes. Outfitted in rustic and cool décor, Hotel Fron has modern facilities, a tour desk and an on-site bar and restaurant.

Rooms are spacious and comfortable, and each has a flat-screen TV, refrigerator and a private bathroom.

 

Best Mid-Range Hotel in Miðborg – City Centre Hotel Reykjavik

City Centre Hotel, Reykjavik

City Centre Hotel Reykjavik is the best mid-range hotel in Miðborg

A central location and range of amenities are just two of the reasons City Centre Hotel Reykjavik is our top picks for where to stay in Miðborg. This three-star hotel is close to restaurants, museums and shops. Rooms are charming, comfortable, and come with all the essentials for a great stay.

 

Best Luxury Hotel in Miðborg – Alda Hotel Reykjavik

Alda Hotel Reykjavik

Alda Hotel Reykjavik is the best luxury hotel in Miðborg

Aldo Hotel might not look like much from the outside. But once inside, you’ll find yourself surrounded by style and luxury. Located on the city’s main street, this hotel is close to great restaurants and cool clubs. It has a sauna and gym, and guests will love dining in the unique restaurant.

 

Neighborhood #2 - Hlíðar

(Where to stay in Reykjavik on a budget)

Hlíðar, Reykjavík

Hlíðar is our pick for where to stay in Reykjavik on a budget

Hlíðar is a small residential neighbourhood on the east side of Reykjavik. A short walk from the city’s downtown core, Hlíðar is cam and quiet; the perfect base for visitors who want to be close but not right at the centre of the hustle and bustle.

Hlíðar is also where you’ll find some of the cheaper accommodations in the city. Although still expensive in comparison to other European travel destinations, this area of the city is where you’ll find a little more bang for your buck. From backpacker hostels to affordable hotels, there’s something for every budget in Hlíðar.

While you won’t find many bars or restaurants in Hlíðar, there’s still plenty to see and do in this neighbourhood. It has quirky museums and awesome art, plus lots of inexpensive activities to keep you occupied and entertained.

Things to See and Do in Hlíðar

  • Browse the works of art that dot the grounds of the Ásmundur Sveinsson Sculpture Museum.
  • Hop on the ferry and visit the Imagine Peace Tower on nearby Viðey Island.
  • Head outside at night to see the magnificent Aurora Borealis or Northern Lights, which are often visible from September through early-April.
  • Explore the largest display of penile parts at the quirky Icelandic Phallological Museum.
  • See exquisite works of art by Icelandic and international artists at the Reykjavik Art Museum Kjarvalsstaðir.
  • Root for the home team at an FC Valur football (soccer) match.
  • Snack on a sweet treat at Bakarameistarinn.

Where to Stay in Hlíðar

Best Budget Hotel in Hlíðar – Brim Hotel

Brim Hotel

Brim Hotel is the best budget hotel in Hlíðar

Brim Hotel is our recommendation for where to stay in Hlíðar. This four-star hotel is situated a short walk from Hallgrimskirkja and the city’s top attractions. It has a convenient tour desk and ticket service on site. And all rooms have blackout curtains – a must if you’re visiting during those endless summer nights.

 

Best Mid-Range Hotel in Hlíðar – 105 – A Townhouse Hotel

105 – A Townhouse Hotel

105 – A Townhouse Hotel is the best mid-range hotel in Hlíðar

105-A Townhouse Hotel is a stylish and modern hotel that feels like home. Centrally located, this three-star property is close to the Icelandic Phallological Museum and the city centre. It boasts hip décor, and each room has a microwave, refrigerator and cable/satellite channels. Guests are also provided with coffee and tea.

 

Best Luxury Hotel in Hlíðar – Hilton Reykjavik Nordica

Hilton Reykjavik Nordica

Hilton Reykjavik Nordica is the best luxury hotel in Hlíðar

Relaxing, modern and boasting amazing views, the Hilton Reykjavik Nordica is the most luxurious hotel in Hlíðar. This four-star property has a relaxing spa and wellness centre, which includes a Jacuzzi, sauna and plush bathrobes and slippers. Conveniently located, this hotel is a short 10-minute walk from Reykjavik’s top tourist attractions.

 

Neighborhood #3 - Miðborg

(Best area to stay in Reykjavik for nightlife)

Miðborg, Reykjavík

Miðborg is our pick for best area to stay in Reykjavik for nightlife

In addition to being the cultural and commercial centre of Reykjavik, Miðborg is also where you’ll find the city’s best and most exciting nightlife.

Lining the streets and tucked around every curve of this downtown district are clubs, bars and pubs. Snaps Bistro Bar is one of the most popular spots for party people. It serves a great selection of drinks and offers up mouthwatering snacks and dishes. Late night revellers will also enjoy Kaldi Bar, where the gin is flowing and the atmosphere is electric.

Whether you want to enjoy casual cocktails or to dominate the dance party, you’ll be spoiled for choice in Miðborg.

Love to eat? Miðborg is also where you’ll find the city’s top restaurants. Serving up everything from luxury Icelandic and Nordic fare to American-style hot dogs and hamburgers, you won’t have to go far to find something delicious in Miðborg.

Things to See and Do in Miðborg

  • Dine on mouthwatering dishes at Forréttabarinn.
  • Catch an outstanding performance at the Harpa Reykjavik Concert Hall.
  • Spend a fun night sipping gin at the ultra-hip and cosy Kaldi Bar.
  • Choose from more than 500 cocktails and dine on great Nordic fare at MAR Restaurant
  • Bar hop to Mirco Bar where you’ll enjoy a fantastic atmosphere with a great selection of beers.
  • Go for a dip at Nauthólsvík, a geothermal beach where the ocean waters are warm and the vibe is relaxed and laid-back.
  • Enjoy trendy Icelandic fare at the upbeat and lively Snaps Bistro Bar.

Where to Stay in Miðborg

Best Budget Hotel in Miðborg – Icelandair Hotel Reykjavik Natura

Icelandair Hotel Reykjavik Natura

Icelandair Hotel Reykjavik Natura is the best budget hotel in Miðborg

This modern four-star hotel is just a short walk from Reykjavik city centre. It has a number of wellness facilities, including a Jacuzzi and indoor pool. Each luxurious room has cable/satellite channels, a small kitchen, coffee and tea facilities and a relaxing spa bathroom. There is also a restaurant and bar lounge.

 

Best Mid-Range Hotel in Miðborg – CenterHotel Skjaldbreid

CenterHotel Skjaldbreid

CenterHotel Skjaldbreid is the best mid-range hotel in Miðborg

CenterHotel Skjaldbreid is conveniently located near Reyjavik’s hottest bars and clubs. It is surrounded by restaurants and shops and is well-connected to the city’s top tourist attractions. The rooms are comfortable and clean, and the hotel features a gym and a restaurant. This four-star hotel is a great base for your time in Reykjavik.

 

Best Luxury Hotel in Miðborg – Kvosin Downtown Hotel

Kvosin Downtown Hotel

Kvosin Downtown Hotel is the best luxury hotel in Miðborg

Kvosin Downtown Hotel is a stylish urban property in the centre of Reykjavik. Our recommendation for where to stay in Miðborg, this four-star hotel is close to Reykjavik’s most popular nightlife destinations. It has a rooftop terrace, a lake, and each room is outfitted with modern amenities for a great stay.

 

Neighborhood #4 - Vesturbær

(Coolest place to stay in Reykjavik)

Vesturbær, Reykjavík

Vesturbær is our pick for the coolest place to stay in Reykjavik

Vesturbær is a neighbourhood that deceives most visitors. At first, it appears to be a regular old, quiet residential neighbourhood. But scratch the surface and you’ll find it’s the coolest, up-and-coming area of the city.

Located to the west of the city centre, Vesturbær sits between Miðborg and the sea. It’s where you’ll find amazing panoramic views as well as charming cafes, trendy restaurants, and local boutiques selling the chicest of Icelandic designs.

Hipsters and foodies will love spending their time in Grandi Harbour. A former hub for the fishing industry, this area around the Old Harbour has recently transformed into one of the trendiest areas in the city. It’s home to the best street food stalls and the cutest cafes. Plus, with its chic décor and colourful accents, you won’t find a more instagrammable ‘hood.

Things to See and Do in Vesturbær

  • Wander through the interactive and innovative exhibits at the Whales of Iceland museum.
  • Grab a snack and browse the street food stalls at the newly opened Grandi Mathöll.
  • Pick-up a chic and fashionable souvenir at MINØR.
  • Go for a swim or relaxing steam at Vesturbæjarlaug, an outdoor geothermal swimming pool.
  • Dine on traditional Icelandic cuisine at Kaffivagnin restaurant.
  • Enjoy a delicious brunch at the super cute and instagrammable Coocoo’s Nest.
  • Snack on a scoop of ice cream at Valdís.
  • Dive deep into early Icelandic history at the Saga Museum.
  • Browse the works of Icelandic fashion designers at the Farmers Market boutique.

Where to Stay in Vesturbær

Best Budget Hotel in Vesturbær – Reykjavik Downtown HI Hostel

Reykjavik Downtown HI Hostel

Reykjavik Downtown HI Hostel is the best budget hotel in Vesturbær

This Vesturbær property is centrally located and an ideal base for exploring the city. It has a number of convenient features including an onsite tour desk, a ticket service, currency exchange and a bike rental. Offering shared accommodations, the dorms are bright, airy, and incredibly comfortable.

 

Best Mid-Range Hotel in Vesturbær – Radisson Blue Saga Hotel Reykjavik

Radisson Blue Saga Hotel Reykjavik

Radisson Blue Saga Hotel Reykjavik is the best mid-range hotel in Vesturbær

Modern amenities, luxurious rooms and panoramic views of Reykjavik are just a few of the reasons we love this hotel. Conveniently located, this four-star hotel is our top recommendation for where to stay in Vesturbær. It has a beauty centre, lounge bar, and all rooms have air-conditioning and on-demand movies.

 

Best Luxury Hotel in Vesturbær – Icelandair Hotel Reykjavik Marina

Icelandair Hotel Reykjavik Marina

Icelandair Hotel Reykjavik Marina is the best luxury hotel in Vesturbær

Icelandair Hotel Reykjavik Marina is centrally located in Vesturbær. It is close to restaurants, bar, museums and nightclubs. This comfortable four-star hotel has 108 themed rooms outfitted with modern amenities. Guests will enjoy the on-site gym and wellness centre, as well as the stylish restaurant and cosy lounge bar.

 

Neighborhood #5 - Laugardalur

(Best neighbourhood in Reykjavik for families)

Laugardalur, Reykjavík

Laugardalur is our pick for best neighbourhood in Reykjavik for families

Nestled between nature and the city, Laugardalur is our top recommendation for where to stay in Reykjavik with kids. It is located to the east of downtown and is a short drive or bus ride to Reykjavik’s top tourist attractions.

Laugardalur is a quiet and residential neighbourhood that is often overlooked by travellers. As such, it’s kept a lot of its authentic charm and local feel. It’s the perfect place to make your base if you’re looking for a break from the typical tourist experience. You certainly won’t find any souvenir shops in this neck of the woods!

A little off the beaten path, Laugardalur is packed with activities and attractions that will excite and delight the whole family. From small zoos and water parks to Elf School and outdoor pools, there’s big fun to be had in Laugardalur no matter the time of year.

Things to See and Do in Laugardalur

  • Enrol in Elf School and become a certified elf hunter and learn all about Iceland’s hidden people.
  • Browse the flora and fauna at the Reykjavik Botanical Gardens, a beautiful place to visit no matter the season.
  • Splash, play and swim a few lengths at Laugardalslaug, the largest outdoor thermal pool in Reykjavik.
  • Meet local animals at Hüsdyragarðurinn, a small zoo that has a train and carousel for children to enjoy.
  • Visit Fjölskyldugarðurinn, a family-oriented park with rides, disc golf, boats and more.
  • Strap on your skate and take a few laps at the Ice Rink Laugardalur.

Where to Stay in Laugardalur

Best Budget Hotel in Laugardalur – Nordurey Hotel City Garden

Radisson Blue Saga Hotel Reykjavik

Radisson Blue Saga Hotel Reykjavik is the best budget hotel in Laugardalur

Nordurey Hotel City Garden is a bright and airy three-star hotel in Langardalur. Comprised of 18 rooms, this small hotel has a tour desk, a ticket service and a relaxing garden. A short walk to the city centre, it is close to restaurants, attractions, and many of Reykjavik’s most famous landmarks.

 

Best Mid-Range Hotel in Laugardalur – Storm Hotel by Keahotels

Storm Hotel by Keahotels

Storm Hotel by Keahotels is the best mid-range hotel in Laugardalur

Storm Hotel by Keahotels is our pick for where to stay in Langardalur. Located near the city’s top tourist attractions, this hotel is close to restaurants, shops, nightclubs and museums. It has chic, modern and minimalist décor, and each room has cable/satellite channels, lavish beds and private bathrooms.

 

Best Luxury Hotel in Laugardalur – Fosshotel Reykjavik

Fosshotel Reykjavik

Fosshotel Reykjavik is the best luxury hotel in Laugardalur

Enjoy a luxurious stay in the heart of Laugardalur at the Fosshotel Reykjavik. This four-star hotel has 320 stylish rooms, each outfitted with refrigerators, minibars and cable/satellite TV. It also offers an all-inclusive meal plan, free-wifi, and packed lunches are available for intrepid and busy travellers.

 

Final Thoughts on Where to Stay in Reykjavik

Reykjavik is a city brimming with fun and excitement. Although it is expensive, a trip to this colourful and eclectic city is certainly worth your time and money! From the top of Hallgrimskirkja to the bottom of Grandi Harbour, there’s something for everyone in the Icelandic capital.

To recap; Miðborg is our favourite neighbourhood to stay in Reykjavik. It’s the centre of the action and is where you’ll find the best shopping, restaurants, museums and clubs.

Our pick for the best hotel is the City Centre Hotel Reykjavik. Not only does it have a great location and luxurious amenities but it’s relatively affordable. You won’t have to worry about breaking the bank by staying at this three-star downtown hotel.

Have we missed anything? Let us know in the comments below. Have a safe and fun journey to Reykjavik, Iceland.

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