While Iceland is becoming notorious for being a pricey destination, there are some accommodation options that are well worth the price. Here is our list of Iceland’s most budget friendly hotels, with locations ranging from the city center of Reykjavik to remote countryside locations in the Highlands and other distant places.
Hotel Berg is conveniently located close to Keflavik International Airport and therefore makes a great place for either a layover or as a place to explore the Reykjanes peninsula. Tastefully designed with the best of key Nordic style ideas, many of which were inspired by the small marina in front of the hotel and the surrounding ocean. With a peaceful atmosphere of traditional boathouses and seagulls, it is a great place to gather your senses before or after your travels.
The Highland Hotel is situated in the Highland Center, a privately owned hotel and restaurant in the midst of Iceland’s Highland desert. The Highland Hotel is a great meeting place from which to organize tours and treks of the surrounding landscape. With black sand deserts with the occasional oases, freshly sprung lava fields, and distant glaciers, there is plenty to see in the center of Iceland’s highlands.
Hotel Borealis is located close to Thingvellir National Park and is about an hour’s drive from Reykjavik. Set in an oddly shaped building with large glass windows with wonderful views, it offers a great location from which to explore the surrounding location. Open all year round, the welcoming hotel offers an onsite restaurant and many activities in the area to choose from.
Located just a 20-minute walk from downtown Reykjavik, Hotel Island is next to the capital’s financial district as well as Laugardalur, a green area including a pool and park. Most rooms offer views of Mount Esja to the west. The hotel is also Iceland’s first hotel dedicated to wellness, with a center located in the hotel where guests can access healthcare specialists promoting health and relaxation during their stay.
Hotel Cabin is a relaxed, modern hotel just two kilometers from Harpa concert hall at the Reykjavik harbor. The rooms are simply furnished with discounts for student groups and conference attendees. There are large banqueting rooms available as well as a bar, tourism desk, and onsite restaurant.
Hotel Bifrost is located on the campus of Bifrost University, directly on the national road, Route 1. About an hour’s drive from Reykjavik, the hotel’s facilities include a golf course, gym, sauna and hot tubs. The rooms are spacious and simple with views of surrounding mountains and lava fields. There is a supermarket located close by as well as an onsite restaurant. Enjoy the surrounding hiking and biking trails, as well as options to go fishing.
Hótel Smári is a three-star hotel in Kopavogur, a neighboring town of Reykjavik. The hotel offers rooms with basic amenities suitable for business trips. The surrounding area is full of shops, restaurants, and other businesses. The hotel is easily reachable from Keflavik International Airport and the Reykjavik Bus Terminal. The largest shopping mall in Iceland is also located less than a kilometer away.
Fosshotel Reykjavík is one of Iceland’s largest hotels and stands prominently against the cityscape in the city’s business district. The hotel is a great place from which to explore all of the things that Reykjavik has to offer such as restaurants, shops, and museums. Each of the rooms offer views of either the harbor or sweeping city views. Enjoy the hotel’s onsite restaurant, Haust.
The Hotel Geysir is located on the Golden Circle route in the Geysir geothermal area about an hour’s drive from Reykjavik. The hotel’s room each have views overlooking this lunar landscape. Within walking distance is the main Geysir, as well as restaurants and shops. Activities such as golfing, hiking and horseback riding can also be arranged from the hotel. The majestic Faxi waterfall is about 10 kilometers away.
4th Floor Hotel is set in a prime location in downtown Reykjavik for exploring the city. Located in a corner building off the main shopping street, the hotel is just meters from the bus station Hlemmur, the oceanside walking path, and easy walking distance from Hallgrimskirkja and the Reykjavik Art Museum – Kjarvalstadir. The hotel has a cozy cafe and bar in the lobby, with wide windows facing a busy street corner – a great place to observe.
Hotel Hafnarfjall is a small hotel in the countryside close to Reykjavik. Built in 1996 in Akranes, the hotel is located in a small forest situated between the ocean and steep mountains. Guests can choose from rooms with private facilities or shared. The location is a great place to explore this charming part of Iceland.
Hotel Laxnes is set in a simple building in a suburban town outside of Reykjavik. The town, Mosfellsbaer, is known for being the home of Iceland’s only Nobel Prize winner, the author Halldor Laxness. His former home and museum can be found in the town, as well. Overlooking the beautiful Mount Esja, the cozy hotel is only a short walk from Álafoss waterfall. Reykjavik is only 15 kilometers away, although you feel like you are in the remote countryside. Enjoy the outdoor hot tub with a mountain view.
Located halfway between Reykjavik and Akureyri, Hotel Laugarbakki’s surroundings are full of local history. For example, The battle of Flói took place in its bay during the year 1244. There are other stories about the landscape’s history of hosting outlaws. The hotel includes a restaurant, gym, and hot tubs. Hvitserkur, a troll-shaped rock formation is located only 15 kilometers away. This, as well as activities such as fishing, seal watching, horseback riding, and hiking, are among some of the fun things to do in the area.