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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.
Table of Contents
Looking for a specific place to stay? These are our highest recommendations for places to stay 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.
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.
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 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 TipEven 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!
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!
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.
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.
Recommended Article – Take a look at our AMAZING guide to the top Museums in Reykjavik.
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.
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.
Love tours? Check out our local guide about the AWESOME tours in Reykjavik!
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Crazy about History? – Have a look at our guide about the history of Reykjavik!
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.
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.
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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Gin lover. Coffee addict. Nicola has traveled the world for 7 years and is a staff writer for Hotel Jules. Born in London, Nicola first got the taste of travel studying abroad in Barcelona. Since then she's been hooked - traveling the world non-stop. Passionate about green travel and vegan lifestyle, Nicola spends more of her free time staring at maps wondering where she will head to next!