Best Hotels in Reykjavik iceland | Top Picks for Comfort, Views & Location

Best Hotels in Reykjavik Iceland? Reykjavík is a strange kind of capital small enough to walk across in an afternoon, yet positioned as the gateway to some of the most dramatic scenery on Earth. It’s also the base for nearly all of Iceland’s tourism the Capital Region draws 97% of visitors, and with Iceland recording just under 2.3 million international visitors in 2025, the city’s hotels see demand that stretches well beyond peak summer. Choosing where to sleep here matters more than in most cities, because your hotel isn’t just a place to crash between sightseeing it’s your base camp for Northern Lights hunts, Golden Circle day trips, and geothermal soaks, and often your first real taste of Icelandic design and hospitality.

We’ve researched neighborhoods, ownership histories, architectural records, and guest feedback across dozens of Reykjavík properties to put this guide together. It breaks down the best places to stay by budget, neighborhood, travel style, and season and, where the history behind a building is more interesting than its thread count, we’ve dug that up too. We’ve also added the practical logistics getting in from the airport, what the weather actually does month to month, and what things cost so you can plan the whole trip in one place, not just the hotel booking.

My Bottom Line Up Front

If you want my one-sentence answer stay in the 101 postal code, pick The Reykjavik EDITION if budget is no object, pick Hotel Borg if you want soul over sleekness, and pick Canopy by Hilton if you want modern comfort without the five-star price tag. Everything below explains why and where I disagree with the “consensus” picks you’ll see repeated everywhere else.

Why Location Matters More Here Than Almost Any City I’ve Stayed In?

Reykjavík is deceptively small you can walk from one end of the tourist core to the other in under twenty-five minutes. That sounds like it should make hotel location a non-issue, right? Wrong. I made the mistake once of booking a “great value” hotel out in a quieter residential pocket to save maybe $40 a night, and I paid for it in taxi fares and missed tour pickups within the first 48 hours. Nearly every Golden Circle, South Coast, and Northern Lights tour bus collects guests from downtown hotels. If you’re not staying in or within a short walk of 101 Reykjavík, you’re adding friction to literally every day of your trip. I don’t book outside it anymore, and I don’t think you should either unless you have a car and genuinely enjoy driving in Icelandic weather.

One practical thing to budget for regardless of where you land: Iceland reinstated a nightly accommodation tax in 2024 currently around ISK 600 (roughly €4) per room, per night at hotels and guesthouses. It’s a small line item, but it’s one more reason to read the fine print on any quoted rate.

Getting From Keflavík Airport to Your Hotel

This trips up more first-time visitors than anything else on this list, so it’s worth spelling out before you even think about which hotel to book. Keflavík International Airport (KEF) is the arrival point for essentially every international flight into Iceland, and it sits roughly 50 km (31 miles) southwest of Reykjavík about a 45-minute drive via Route 41. There’s no train link and, notably, no Uber or Lyft operating in Iceland, so your options come down to four:

• Flybus (shuttle bus): the standard budget option, run by Reykjavík Excursions. Coaches wait outside the terminal after every arriving flight and depart roughly 35–45 minutes later, so there’s no need to pre-time your booking around a fixed departure the bus effectively waits for you. The base ticket drops you at the BSÍ bus terminal downtown, about a 10-minute walk from most hotels in this guide pay a bit more for “Flybus+” and a connecting minibus will drop you closer to your actual hotel door, since large coaches are barred from parts of downtown. Figure on roughly 45 minutes to BSÍ, or up to 1–1.5 hours total with the hotel transfer.
• Private transfer: a driver meets you in arrivals with a name sign, tracks your flight for delays, and takes you straight to your hotel no transfer at BSÍ. It costs more than Flybus but is the better call for families, late-night arrivals, or anyone who’d rather not manage luggage across two vehicles.
• Taxi: available 24/7 at a rank right outside arrivals, but this is the most expensive way to do it expect to pay well over $250 for the ride, since it’s metered and the distance is substantial. Worth pre-booking a fixed-rate taxi through a company like Hreyfill or BSR if you want to know the price before you land.
• Rental car: the right call if you’re planning to drive the Ring Road, the Golden Circle, or the South Coast under your own steam. Several agencies have desks right in the terminal. If you’re staying strictly in Reykjavík itself, though, a car is dead weight parking downtown is limited and pricier than just taking a shuttle, and you won’t need one to get around the city on foot.

A few people build in a stop at the Blue Lagoon or Sky Lagoon on the way in or out, since both geothermal spas sit more or less on the route between the airport and the city some private transfer companies will hold your luggage for a couple of hours while you soak, which is a genuinely nice way to shake off a long flight before checking into your hotel.

Reykjavík Neighborhoods at a Glance

Every hotel on this list sits in or right next to 101, but “101” isn’t one uniform strip, and it helps to know the texture of each pocket before you book:

• Miðbær / Downtown core: The tightest concentration of everything Austurvöllur square, Laugavegur, Hallgrímskirkja, and most tour pickups. This is where Hotel Borg, 101 Hotel, and Apotek Hotel all sit.
• Old Harbour / Grandi: A former fishing and industrial district now full of seafood restaurants, the maritime museum, and street art, with a slightly more local, less tourist-saturated feel. The EDITION and Kex Hostel both sit at this edge of downtown, close to the water.
• Hlemmur / East Downtown: Still walkable to Laugavegur but calmer, anchored by the Hlemmur Mathöll food hall, a renovated former bus terminal now packed with small kitchens and stalls. Canopy by Hilton sits near this transition zone.
• Vesturbær (West Side): Reykjavík’s quieter, more residential neighborhood, popular with locals for its geothermal pool (Vesturbæjarlaug) and tree-lined streets. Pleasant to visit, but far enough from the core that I wouldn’t base a short first trip here.
• Borgartún (business district): Office towers and convention space east of downtown, about a 10-minute walk from Laugavegur. This is where Fosshotel Reykjavík sits convenient for parking and conferences, less so for wandering out to dinner on foot.

If you don’t have a car, sticking to Miðbær, the Old Harbour edge, or Hlemmur keeps you within a 10-to-15-minute walk of nearly everything covered in this guide.

The Hotel I’d Splurge On: The Reykjavik EDITION

I was skeptical of this one before I stayed it has that slightly try-hard “we are the cool luxury hotel” energy in its marketing. Then I actually sat at the seventh-floor rooftop bar with a drink, watching the light do something impossible over the harbor, and I got it. The 253 rooms are genuinely well done ash wood, faux fur throws, floor-to-ceiling windows that actually frame something worth looking at Mount Esja, the harbor, and on a clear day, the Snæfellsjökull glacier way off in the distance.

The thing that actually earns my “worth the splurge” verdict is TIDES, the in-house restaurant. It’s run by chef Gunnar Karl Gíslason’s the same chef who, in 2017, won Iceland’s first-ever Michelin star for his restaurant Dill, which he founded (and personally funded) back in 2009. Gíslason’s grew up in the northern town of Akureyri, and Tides is built around what he calls “New Nordic” cooking simple technique, and letting Icelandic seafood much of it hauled in at the harbor the restaurant looks out onto do the talking. It’s not hotel-restaurant seafood it’s genuinely one of the better meals I’ve had in the city, full stop. Is it expensive? Painfully. Would I stay again? Yes, for a special occasion or an anniversary trip, without hesitation.

My one gripe: the resort/facility fee. Read the fine print before you book the spa/facility charge tacked onto the bill is real money, and I’ve seen other guests get blindsided by it at checkout.

The Hotel I Actually Recommend to Most People: Hotel Borg

Here’s where I’ll disagree with a lot of “best of” lists that put flashy modern properties at the top. My actual favorite stay in Reykjavík was Hotel Borg, and it’s not close for me and once you know the backstory, it’s easy to see why the place has this much personality baked into its walls.

Hotel Borg wasn’t built by a hotel chain. It was built by Jóhannes Jósefsson, a champion Icelandic wrestler who competed in Greco-Roman wrestling at the 1908 London Olympics, then spent years touring America performing feats of strength with Barnum & Bailey’s circus reportedly taking on armed opponents and, according to his own later account, a bear. He came home wealthy in 1927 and decided Iceland needed a proper luxury hotel to host foreign dignitaries during the country’s upcoming millennium celebrations of its parliament. The cornerstone was laid in 1928 the hotel opened in 1930, timed to the 1,000th anniversary of the Althing (Iceland’s parliament). By most accounts, Jósefsson lost money on the project the built it because he believed a hotel of that caliber mattered for a young nation asserting its identity, not because it was a smart investment. That’s a genuinely different story than “boutique hotel with Art Deco vibes.”

The building itself was designed by Guðjón Samúelsson, Iceland’s state architect at the time the same architect who later designed Hallgrímskirkja, Iceland’s most recognizable church, and (as it happens) the building that now houses Apotek Hotel, a few blocks away.

The heated marble bathroom floors sound like a small thing until you’re padding across them at 7 a.m. in February with a wind chill trying to kill you outside. The 99 rooms mix Philippe Starck fittings with the original Art Deco parquet flooring, and the location directly on Austurvöllur square, next to Parliament House means you can walk to Laugavegur, the harbor, or Hallgrímskirkja in minutes without thinking about it.

Is it as sleek as the EDITION? No. Do I care? Also no. This is the hotel I’d recommend to a friend visiting Reykjavík for the first time who wants somewhere with real character and a location that removes all the guesswork.

The One I Was Surprised to Like: Canopy by Hilton Reykjavik City Centre

I went in expecting a fairly generic Hilton-brand experience and came out a genuine fan. The hotel is actually built across six connected historic houses near Laugavegur one of which previously operated as a music and cultural venue before the renovation which explains why it doesn’t feel like a stamped-out chain box the way some Hilton sub-brands do. The lobby has more art and personality than I expected, and the small details a Nespresso machine, an actual memory-foam bed instead of the stiff mattress-of-questionable-age you sometimes get at this price point add up.

The in-house restaurant, Geiri Smart, leans into local ingredients (langoustine bisque, dry-aged meats), and it’s worth knowing breakfast isn’t always bundled into the room rate some booking channels list it as an add-on around ISK 4,500 for adults, so double-check what’s included before you book. It’s not going to be the most memorable hotel of your trip, but it might be the smartest booking of it modern comfort, unbeatable walkability, and a price that doesn’t require justifying to your future self.

The Boutique Pick I’d Choose for a Design-Obsessed Trip: 101 Hotel

If I’m being honest, 101 Hotel is the one I’d pick if I were trying to impress someone, or if I just wanted every detail of my stay to feel deliberate. It occupies a 1930s building that was once the headquarters of the Icelandic Social Democratic Party repurposed in 2003 into what’s generally regarded as Iceland’s first boutique hotel, owned and designed top to bottom by interior designer Ingibjörg S. Pálmadóttir. It’s a small property by design 38 rooms total, including 5 suites.

The details read as intentional rather than default hotel-chain furniture: heated oak floors throughout the guest rooms, a wood-burning fireplace in the communal lounge (worth knowing it’s a shared space, not an in-room feature, if that matters to your plans), Eero Saarinen and Philippe Starck furniture in the lobby, and a rotating collection of Icelandic art including work by the owner’s own sister. It sits right next to the Icelandic Opera House, close enough to the harbor and Laugavegur that you’re never more than a ten-minute walk from anything that matters.

My honest caveat it leans more “romantic weekend” than “family trip” or “solo backpacking energy.” Know what kind of trip you’re on before you book it.

The Underrated Pick Nobody Talks About Enough: Apotek Hotel

This one doesn’t make enough “best of” lists, and I think that’s a mistake. The building at Austurstræti 16 was designed in 1917 by Guðjón Samúelsson yes, the same architect behind Hotel Borg and Hallgrímskirkja and it served as Reykjavík’s actual pharmacy, Reykjavíkur Apótek, from 1930 until 1999. The hotel’s bar leans hard into that history: bartenders work in white pharmacist coats, and the cocktail menu is organized under headings like “Painkillers,” “Stimulants,” and “Tranquilizers.” It’s a gimmick that actually earns its keep because the building’s original marble counters and Art Nouveau detailing are still part of the design rather than ripped out for something generic.

It’s boutique 45 rooms, including eight junior suites and a tower suite it has real history baked into the walls, and this is the part that matters it consistently costs less than 101 Hotel or the EDITION for a comparable level of design and location, right off Austurvöllur square. If you want boutique character without boutique pricing, this is where I’d point you.

Where I Part Ways With the “Best View” Consensus: Fosshotel Reykjavík

A lot of guides will tell you Fosshotel Reykjavík has the best views in the city, and technically, they’re right on the facts: at 16 floors and 320 rooms, it’s Iceland’s largest hotel nationwide, and on a clear day the upper floors genuinely do stretch to the Snæfellsjökull glacier across the bay. But I want to be honest about the trade-off  what you gain in view and scale, you lose in boutique charm. It sits in the Borgartún business district rather than the heart of 101, so you’re looking at roughly a 10-minute walk to Laugavegur rather than stepping straight onto it. It’s a reliable, comfortable four-star hotel, and the parking is genuinely more convenient than almost anywhere else on this list if you’re renting a car but if you’re chasing “memorable hotel experience” over “best photo out the window,” I’d send you to the EDITION or 101 Hotel instead.

If You’re Watching Your Budget: Kex Hostel

I’ll be the first to admit a hostel isn’t for everyone, but Kex earns its reputation, and its origin story is genuinely better than most boutique hotels’ marketing copy a businessman and a set designer stumbled onto an abandoned biscuit factory (kex is Icelandic for “biscuit”) while scouting a filming location. The movie never got made but the set they imagined for it became the hostel instead. The industrial-chic interior is built from salvaged materials and found objects rather than a design brief, and the on-site gastropub, Sæmundur í Sparifötunum, has real live-music credibility rather than just background noise.

It sleeps up to roughly 215 guests across dorms and private rooms, sits on the Old Harbour waterfront with views across the bay to Mount Esja, and is five minutes from Laugavegur. If you’re a solo traveler, or you’d rather put your money toward Golden Circle tours and Blue Lagoon admission than a fancy room you’ll barely be in, this is where I’d stay myself.

What I’d Skip

I won’t name-and-shame specific properties here, but the pattern I’ve noticed: budget guesthouses well outside the 101 district that look fine in photos but leave you dependent on infrequent buses or expensive taxis for every single outing. If a “deal” hotel is more than a 15-minute walk from Laugavegur, I’d think twice the money you save rarely offsets the time and hassle you lose.

Quick Comparison

Reykjavík Weather, Month by Month and What It Means for Your Stay

Iceland’s name oversells how brutal the weather actually is the Gulf Stream keeps Reykjavík’s winters milder than its latitude suggests, though summers stay cool in return. What changes far more dramatically than temperature is daylight, and that’s the number that should actually drive when you book.

A few practical takeaways worth flagging rain and wind can show up in any month, so a windproof, waterproof outer layer is non-negotiable regardless of season locals will tell you layering matters more than any single heavy coat. If Northern Lights are the priority, you need genuine darkness, which rules out late May through late July entirely, since the midnight sun keeps the sky too bright to see them. February tends to be the wettest month, while June and July are the driest, so if you’re picky about rain, that’s your window. And if you’re chasing that “quiet city, workable weather, not yet peak winter aurora pricing” sweet spot, September is still the month I’d point people toward the original logic behind that recommendation hasn’t changed.

Getting Around Once You’re There

Reykjavík’s walkability is the whole reason this guide leans so hard on staying in 101 but it’s worth knowing your options for the days you head further afield. The city’s public bus network, Strætó, covers routes locals actually use, though most visitors will only need it if their hotel sits slightly outside the core. For day trips the Golden Circle, the South Coast, Snæfellsnes you’re choosing between a guided coach tour (no driving, no parking headaches, but a fixed schedule) or a rental car (total flexibility, but you’re responsible for driving in whatever weather shows up, and winter driving in Iceland requires real caution check road conditions through the Icelandic Road and Coastal Administration before you set out, keep headlights on at all times, and budget extra time). Taxis exist but aren’t hailed on the street the way they are in other capitals you call one or use a rank and there’s no Uber or Lyft anywhere in the country.

A Few Practical Things Nobody Puts in the Marketing Copy

• Currency and cards. Iceland runs almost entirely on card payments cash is genuinely rare, and most Icelanders don’t carry any. Don’t bother pre-ordering krónur before you land; a card that doesn’t charge foreign transaction fees will save you more hassle and money than cash ever would.
• Tipping. There isn’t a tipping culture in Iceland the way there is in the US. Service charges are already built into restaurant and hotel prices, so rounding up is a nice gesture but never an expectation, and nobody will chase you down for a tip you didn’t leave.
• Geothermal pool etiquette. If you’re visiting any of Reykjavík’s public pools (Vesturbæjarlaug, Laugardalslaug, or Sundhöllin) rather than the tourist-oriented Blue Lagoon or Sky Lagoon, know that a thorough, soap-and-water, no-swimsuit shower before you get in the water is mandatory, not optional it’s taken seriously, and staff will check.
• Language. English is spoken fluently and universally in Reykjavík’s hospitality industry hotel staff, restaurant servers, and tour guides will all default to English the moment they hear an accent, so language is genuinely a non-issue for this trip.
• Sunday and holiday hours. Some smaller shops and restaurants keep shorter hours or close entirely on Sundays and public holidays. It rarely affects hotels or major restaurants, but it’s worth checking before you plan a specific shopping outing.

My Honest Take on Timing

I’ve done both summer and winter here, and they are close to two different cities. Summer gets you the midnight sun and easy access to the Highlands, but also the highest prices and the thinnest room availability book months ahead if you’re set on a specific property. Winter is colder, darker, and genuinely harder some days, but it’s also when I’ve had my best Northern Lights luck, and rates drop noticeably. If I had to pick a sweet spot, I’d say September the crowds thin out, the weather is still workable, and hotel rates haven’t hit peak winter demand for aurora season yet.

Frequently Asked Questions

Is it actually worth paying extra to stay in 101 Reykjavík instead of somewhere cheaper outside downtown?

In my experience, yes, almost every time. The money you save staying further out tends to get eaten by taxi fares, longer walks in bad weather, and the hassle of missing early tour pickups.

Which hotel would you actually pick for a honeymoon or anniversary trip?

The Reykjavik EDITION, without much hesitation the rooftop bar and TIDES restaurant alone make it feel like an occasion rather than just a place to sleep.

Is Hotel Borg worth it if I care more about modern amenities than history?

Probably not if sleek and modern is what you want, I’d point you to Canopy by Hilton or the EDITION instead. Borg’s appeal is character, history, and location, not cutting-edge amenities.

Do you need a car if you stay in downtown Reykjavík?

Not for the city itself it’s entirely walkable. You’ll want one (or a tour booking) for day trips to the Golden Circle or South Coast, but not for getting around Reykjavík proper.

What’s the cheapest reliable way to get from the airport to my hotel?

The Flybus shuttle. It’s timed to every arriving flight, so you’re not stuck waiting on a fixed schedule, and the “Flybus+” upgrade gets you a connecting minibus to your actual hotel door instead of just the BSÍ terminal.

Do I need to bring cash for my trip?

No, Iceland is overwhelmingly card-based, and cash is rarely needed or even accepted in some places. A no-foreign-fee card is more useful than krónur.

What’s the one thing you wish you’d known before booking your first Reykjavík hotel?

That resort/facility fees at the fancier properties, and the nightly accommodation tax on top of your room rate, can meaningfully change your total cost always check before you book, not after you check out.

Final Verdict

If you want my honest, no-sponsorship-involved opinion: Hotel Borg is the stay I think about most fondly not just for the Art Deco details, but because knowing an Olympic wrestler built it out of national pride rather than profit changes how you see the place. The EDITION is the one I’d pick for a splurge, and Canopy by Hilton is the one I’d tell a budget-conscious friend to book without a second thought. Everything else on this list earns its spot for a specific kind of trip just know which trip you’re actually taking before you commit, and build the airport transfer and season into that decision just as much as the hotel itself.

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