Reykjavík has a surprisingly developed hotel scene for its size, from the Art Deco grandeur of Hotel Borg and the art-filled Hotel Holt to sleek design boutiques and clever all-suite stays. Beyond the city, dramatic countryside resorts put you under the aurora at Þingvellir or beside the Blue Lagoon, while friendly hostels keep costs down. It's an expensive city, so this guide covers the best places to stay across every price band, with neighbourhoods, nightly rates in USD and tips on which area suits your trip.
$$$$Hotel Borg
Area
City Centre (Pósthússtræti)
Type
Luxury Icon
“Reykjavik's oldest luxury hotel, an Art Deco landmark on the parliament square since 1930.”
$$$$The Retreat at Blue Lagoon
Area
Blue Lagoon (45 min)
Type
Spa Resort
“Private lagoon access away from the day-trip crowds, plus the Michelin-recommended Moss restaurant.”
$$$$ION Adventure Hotel
Area
Þingvellir (45 min)
Type
Design Resort
“A striking design hotel in Þingvellir National Park with a Northern Lights bar — book a month ahead for winter aurora season.”
$$$Hotel Holt
Area
City Centre (Bergstaðastræti)
Type
Boutique / Art
“Home to the largest private collection of Icelandic art anywhere — over 650 works throughout the hotel.”
$$$Kvosin Downtown Hotel
Area
City Centre (Kirkjutorg)
Type
Boutique Suites
“All 24 suites have small kitchens — great for stays of several days. Right on the parliament square.”
$$$Canopy by Hilton Reykjavik City Centre
Area
City Centre (Smiðjustígur)
Type
Modern
“Hilton's hip boutique brand, right in the centre — 112 rooms with breakfast included.”
$$Fosshotel Reykjavik
Area
City Centre (Þórunnartún)
Type
Business
“Iceland's largest hotel, with an indoor pool and gym — good value and broad facilities for families.”
$KEX Hostel
Area
City Centre (Skúlagata)
Type
Hostel
“A hip hostel in a former biscuit factory, with a live-music bar — dorms from about $40, doubles from $110.”
Reykjavík hotels in detail
1.Hotel Borg
Hotel Borg is Reykjavik's oldest luxury hotel, opened in 1930 and standing proudly on Pósthússtræti beside Austurvöllur, the square in front of the Icelandic parliament. Its classic Art Deco architecture, sensitively restored in 2007, gives it a sense of history and glamour that the city's modern hotels can't match, and its 99 rooms blend period elegance with contemporary comfort. The location is as central as it gets — a five-minute walk to Hallgrímskirkja, the old harbour and Harpa concert hall — making it ideal for first-time visitors who want to combine luxury with the ability to explore the compact old town entirely on foot. Rooms typically run from around $370 a night, rising well beyond that for suites and in high season. There's a stylish bar and restaurant, and the whole property carries an air of understated, old-world sophistication that appeals particularly to couples and travellers who appreciate heritage. For anyone wanting to stay somewhere with genuine character and a prime downtown address, rather than a modern chain hotel on the edge of town, Hotel Borg is Reykjavik's benchmark grand hotel, and a memorable place to base a city break.
Hours
Check-in from 15:00
Price
From ~$370/night
Getting there
On Pósthússtræti, beside Austurvöllur (parliament square) in the centre
Insider tip: Reykjavik's oldest luxury hotel, an Art Deco landmark on the parliament square since 1930.
2.The Retreat at Blue Lagoon
The Retreat at Blue Lagoon is Iceland's most exclusive resort, opened in 2018 and carved into the black lava field beside the famous milky-blue geothermal lagoon, 45 minutes from Reykjavik and conveniently close to Keflavík airport. Its 62 suites are done in a serene, minimalist style of stone, wood and glass, and the headline draw is private access to a secluded section of the lagoon, away from the crowds of day visitors who pack the main pools — a rare luxury here. Guests also enjoy a vast subterranean spa built into the volcanic rock, with in-water treatments and quiet lounges, plus the acclaimed Moss restaurant serving refined Icelandic fine dining. Rates start high, from around $1,200 a night and climbing steeply, placing it firmly in the wellness-splurge bracket rather than the typical city stay. This is a destination in its own right — somewhere to bookend a trip with a night or two of pure relaxation, often at the start or end when flying via Keflavík — rather than a base for exploring Reykjavik. For travellers who want a once-in-a-lifetime geothermal spa experience with total privacy and comfort, and who value wellness over sightseeing, The Retreat is unmatched in Iceland.
Hours
Check-in from 15:00
Price
From ~$1,200/night
Getting there
At the Blue Lagoon, 45 minutes from Reykjavik and 20 minutes from KEF airport
Insider tip: Private lagoon access away from the day-trip crowds, plus the Michelin-recommended Moss restaurant.
3.ION Adventure Hotel
ION Adventure Hotel is one of Iceland's most photographed hotels, a bold, cantilevered design statement set out in the volcanic wilderness of Þingvellir National Park, about 45 minutes' drive from Reykjavik. Its 46 rooms are minimalist and contemporary, with floor-to-ceiling windows framing views over the Hengill volcano and the lava fields of Þingvellir, and the whole building is engineered to sit lightly on the fragile landscape. The star features are the outdoor geothermal pool, steaming under the open sky, and the Northern Lights Bar, a glass-walled lounge purpose-built for watching the aurora dance overhead on clear winter nights. Rates run from around $500 a night. Because it's out in the countryside rather than in the city, it works best as a one- or two-night escape, ideally combined with a Golden Circle drive — Þingvellir, Geysir and Gullfoss are all within easy reach. For the aurora season, roughly September to April, it's worth booking a month or more ahead, as the Northern Lights rooms and dates fill fast. For travellers who want cutting-edge design, geothermal bathing and a real chance of the aurora far from the city's light pollution, ION delivers a memorable Icelandic stay.
Hours
Check-in from 15:00
Price
From ~$500/night
Getting there
In Þingvellir National Park, 45 minutes' drive from Reykjavik
Insider tip: A striking design hotel in Þingvellir National Park with a Northern Lights bar — book a month ahead for winter aurora season.
4.Hotel Holt
Hotel Holt is a Reykjavik institution, a classic art hotel run by the same family since 1965 and home to the largest private collection of Icelandic art anywhere — more than 650 paintings and sculptures from the 19th and 20th centuries that hang throughout the public rooms, corridors and bedrooms. Staying here feels a little like sleeping in a gallery, with works by Iceland's most important artists at every turn, and it draws a cultured, discerning clientele who value that heritage over the latest design trends. The 40 or so rooms are traditional and comfortable rather than cutting-edge, in keeping with the hotel's old-world character, and there's a well-regarded restaurant and a cosy gallery bar. Rates run from around $300 a night. The setting, on quiet Bergstaðastræti in the heart of the city, keeps you within easy walking distance of Laugavegur, Hallgrímskirkja and the main sights while feeling tucked away from the bustle. It's more of a cultural experience than a slick modern luxury stay, best suited to art lovers and travellers who appreciate a hotel with genuine history and soul. For a characterful, art-filled base in central Reykjavik, Hotel Holt is one of a kind.
Hours
Check-in from 15:00
Price
From ~$300/night
Getting there
On Bergstaðastræti in the city centre, a short walk from Laugavegur
Insider tip: Home to the largest private collection of Icelandic art anywhere — over 650 works throughout the hotel.
5.Kvosin Downtown Hotel
Kvosin Downtown is a stylish boutique hotel set in a restored early-20th-century building right by Austurvöllur, the square in front of Iceland's parliament, about as central as Reykjavik gets. Its 24 suites are done in a warm, contemporary Scandinavian style, and crucially every one comes with a small kitchen — a real advantage in a city where eating out is expensive and where many visitors stay four to seven nights while using Reykjavik as a base for day trips. That apartment-like flexibility, combined with generous suite sizes, makes it feel more like a smart pied-à-terre than a conventional hotel, and it's a favourite with couples and small groups who want space and self-catering options. Rates run from around $300 a night. The location is superb, with cafés, restaurants, bars and the main sights all on the doorstep, and there's a good restaurant and bar in the building itself. For travellers who value independence, room to spread out and a genuinely central address — and who like the idea of being able to cook the odd meal to keep costs down — Kvosin Downtown is one of the most practical and appealing boutique choices in the city.
Hours
Check-in from 15:00
Price
From ~$300/night
Getting there
On Kirkjutorg by Austurvöllur square, in the heart of the centre
Insider tip: All 24 suites have small kitchens — great for stays of several days. Right on the parliament square.
6.Canopy by Hilton Reykjavik City Centre
The Canopy by Hilton Reykjavik City Centre brings Hilton's hip, lifestyle-focused boutique brand to a central spot just off Laugavegur, and it's a reliable, comfortable choice for travellers who want modern amenities and a recognised name in the heart of the city. Its 112 rooms are done in clean, modern Scandinavian design, and a generous breakfast is included, setting you up for a day of sightseeing or a Golden Circle drive. The location is excellent for exploring on foot, with the shops and restaurants of Laugavegur, the harbour and the main attractions all within easy reach. Rates run from around $230 a night, which by Reykjavik standards is fair value for a smart, centrally located hotel with full facilities. It leans more towards contemporary comfort and dependable service than the character of the heritage hotels or the drama of the countryside resorts, which makes it a solid pick for business travellers, couples and anyone who values consistency and a good night's sleep in a great location. There's a relaxed lobby bar and the usual Hilton polish throughout. For a modern, well-run and centrally placed base in Reykjavik, the Canopy is a dependable and comfortable option.
Hours
Check-in from 15:00
Price
From ~$230/night
Getting there
On Smiðjustígur in the city centre, just off Laugavegur
Insider tip: Hilton's hip boutique brand, right in the centre — 112 rooms with breakfast included.
7.Fosshotel Reykjavik
Fosshotel Reykjavik is the city's largest hotel, a modern four-star tower with 320 rooms decked out in clean Scandinavian style, and it's a practical, well-priced choice for travellers who want plenty of facilities under one roof. Unusually for central Reykjavik, it has an indoor pool, a gym and a business centre, plus a buffet breakfast, making it a comfortable option for families who need broader amenities and for business visitors who value convenience. It's more functional than atmospheric — this is a big, efficient modern hotel rather than a characterful boutique — but that's exactly its appeal for those who prioritise a reliable, spacious room and good facilities over heritage charm. Rates run from around $190 a night, which is decent value given the size, the pool and the central-ish location; the old-town core and Laugavegur are a short walk or quick bus ride away. The upper floors offer views over the city and out to Mount Esja. For visitors who want a dependable, full-service base with room to spread out, a pool for the kids and prices that undercut the smaller heritage hotels, Fosshotel Reykjavik is a sensible and comfortable choice, and its scale means availability even when smaller places are full.
Hours
Check-in from 15:00
Price
From ~$190/night
Getting there
On Þórunnartún, a short walk or bus from the old town centre
Insider tip: Iceland's largest hotel, with an indoor pool and gym — good value and broad facilities for families.
8.KEX Hostel
KEX Hostel is Reykjavik's most characterful budget stay, set in a restored 1930s biscuit factory (kex means 'biscuit') on the waterfront just off Laugavegur. It mixes dorm beds, from around $40 a night, with private rooms with shared bathrooms from about $110, all in a wonderfully atmospheric space of reclaimed timber, vintage furniture and industrial detailing. The real heart of the place is its bar and restaurant, a destination in its own right that draws locals as well as guests, with regular live music, a buzzy social vibe and views out over the sea to Mount Esja. That creative, sociable energy makes it a magnet for younger, international travellers in their twenties and thirties who want atmosphere and company rather than just a cheap bed. The location is excellent — steps from the shore promenade, Laugavegur's shops and bars, and the main sights, all walkable. It's more boutique-hostel-meets-social-hub than a traditional backpacker dorm, which is exactly its charm. For budget-conscious visitors who want somewhere with genuine personality, a great bar on site and a central, walkable base in Reykjavik, KEX is one of the most enjoyable and well-known choices in the city.
Hours
24h reception
Price
Dorm from ~$40; private double from ~$110
Getting there
On Skúlagata by the waterfront, a short walk from Laugavegur
Insider tip: A hip hostel in a former biscuit factory, with a live-music bar — dorms from about $40, doubles from $110.