What Are the Best Hostels in Iceland?

Iceland has some beautiful places to explore on foot, including the area above Seyðisfjörður
Iceland has some beautiful places to explore on foot, including the area above Seyðisfjörður | © Andy Sutton / Alamy Stock Photo
Nammie Matthews

Writer

From lava fields and bubbling volcanoes to geothermal spas and staggering waterfalls, Iceland offers endless one-of-a-kind adventures. Its hostels share the same audacious spirit, whether it’s a vintage biscuit factory in Reykjavík or a family-run bolthole in Akureyri. Book one of these top budget beds with Culture Trip.

1. Kex Hostel

Hostel

Small room interior at Kex Hostel Reykjavík
Courtesy of Kex Hostel / Expedia

Furnished with salvaged materials, Kex – named for the building’s biscuit factory heritage – is a unique hostel, mere steps from the sea in downtown Reykjavík. Everything from the Hallgrimskirkja to the Sun Voyager sculpture is within walking distance; you’ll also find many cafes, museums, shops and bars along the way. The hostel’s restaurant, lounge area and heated patio are great spaces for socialising after exploring.

2. Galaxy Pod Hostel

Hostel

Six futuristic sleeping pods at Galaxy Pod Hostel, Reykjavik
Courtesy of Galaxy Pod Hostel / Expedia

The future has arrived in Reykjavík’s most sci-fi hostel, where you’ll be sleeping in a Star Trek-esque space pod, complete with a locker and door shutters or curtains for added privacy. The hostel also has a virtual-reality and gaming room – not that you’ll need to escape from its mountain views. There’s also a grocery store across the street, where locals shop for kitchen staples and specialities.

3. Bus Hostel

Hostel

Exterior of Bus Hostel Reykjavik viewed from the street
Courtesy of Bus Hostel / Expedia

A warm welcome awaits you at Reykjavík’s Bus Hostel, where modern simplicity exudes from every room – including private twin rooms and four- to 20-bed dorms. It’s a 20-minute walk to the city centre; however, it’s adjacent to the capital’s primary bus terminal, putting it in a prime location for nature, adventure or Northern Lights tours in Reykjavík and the surrounding area. Perks include bed linen and budget-friendly airport transfers.

4. Lækur Hostel

Hostel

Twin room interior at Lækur Hostel, bright, with simple but modern decor
Courtesy of Lækur Hostel / Expedia

Owned by sibling duo Björn and Alfreð, Lækur Hostel is a spacious home from home in Reykjavík’s green valley of Laugardalur. The hostel is within walking distance of local bus stops that will take you downtown, or there are ocean views and Iceland’s most popular public geothermal pool, Laugardalslaug, within a three-minute walk. You can sample excellent coffee, pizza or vegetarian meals at the adjoining bistro, Kaffi Laugalækur.

5. The Freezer Hostel and Culture Centre

Hostel

Spacious common room interior at The Freezer Hostel & Culture Center, with a large screen on the wall, loads of seating and a bar in the corner
Courtesy of The Freezer Hostel and Culture Centre / Expedia

A former fish factory, the Freezer may be the most ambitious hostel in Iceland, combining award-winning accommodation with a culture centre, a theatre and an artist residency. In western Iceland, the hostel sits near Snæfellsjökull Glacier National Park; it’s the perfect spot for viewing the incredible Northern Lights. At the end of a long day of exploring lava fields and volcano craters, relax with sociable game nights, music, cinema and more at the hostel.

6. Akureyri Backpackers

Hostel

Tradiitonal, wood-clad exterior of Akureyri Backpackers hostel, Iceland, viewed from the street
Courtesy of Akureyri Backpackers / Expedia

If you’re looking for affordable accommodation, food and drink in Iceland’s “Capital of the North”, look no further than Akureyri Backpackers, a family-run hostel where your comfort and budget are the top priorities. There’s a range of four- to eight-person dorms, along with family bunk rooms and private doubles. Share travel tips in the hostel bar or on-site sauna. Lake Mývatn and the whale-watching town of Húsavík are just an hour’s drive away.

7. Laugarvatn HI Hostel

Hostel

Games room at Laugarvatn Hostel, with a larger snooker table in the middle
Courtesy of Laugarvatn HI Hostel / Expedia

Relax in a bubbling hot tub at Laugarvatn HI Hostel, sitting in one of South Iceland’s most popular summer resort towns. Single, double and family rooms are available here, most with shared bathrooms. The grocery store next door makes it easy to pack for your adventures, whether it’s exploring Litli Björn cave or hiking and fishing expeditions. Laugarvatn Fontana is also nearby – a stunning lakefront spa where you can bathe under the Northern Lights.

8. The Barn Hostel

Hostel

Dining area at The Barn, Iceland, with a full kitchen and three visible dining tables; a large window looks out onto nature
Courtesy of The Barn Hostel / Expedia

The Barn Hostel’s stylish design is a sight to behold, complete with dark wood and expansive views of Reynisfjall, a tuff mountain. Luxury amenities (hairdryer, late-night reception and well-stocked hotel bar) mean you’ll almost forget you’re staying in shared accommodation. The hostel is conveniently close to Iceland’s prominent south coast attractions; the black-sand beach of Reynisfjara is just a four-minute drive away – keep your eyes peeled for the puffins.

9. Selfoss HI Hostel

Hostel

Room interior at Selfoss HI Hostel with five single beds
Courtesy of Selfoss HI Hostel / Expedia

Laid-back and cosy, Selfoss HI Hostel provides an excellent base to travel around southern Iceland. Head out to the Golden Circle and explore Thingvellir National Park before returning to the hostel, where you can tuck into provided meals (at an extra cost) or luxuriate in the hostel’s hot tub. Choose between a mixed dorm or a range of private rooms, depending on your group size.

10. Reykjavík Loft HI Hostel

Hostel, Budget Hotel

Two bunk beds at Loft HI Hostel, Iceland
Courtesy of Reykjavík Loft HI Hostel / Expedia

Set in a fully accessible building in the heart of Reykjavík, this HI hostel has rooms to suit all travellers – from six-person dorms (both mixed and female-only) to private rooms sleeping up to six. While it has all of the city’s main sights on its doorstep, it’s also home to a jam-packed event calendar, offering live music, markets, karaoke nights, pub quizzes and more. It also prioritises sustainability, offsetting the carbon footprint of every guest. Visit the rooftop terrace for a beer.

Looking for more? Book into one of the best hostels in Reykjavik, or discover the best cheap hotels in Iceland.

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