Iceland sits on the edge of the Arctic Circle, wedged between two tectonic plates, and it shows. Volcanic landscapes, spouting geysers, and the Northern Lights rippling overhead — it’s the kind of place that stops people mid-sentence. That reputation has drawn everyone from Game of Thrones location scouts to travel photographers, and the hotel scene has grown to match. Accommodation has spread well beyond Reykjavik now, ranging from simple guesthouses to genuinely impressive hotel stays. Whatever your budget or travel style, there’s a base here that works.
Which part of Iceland is the best to stay in?
It depends on what you’re after, but Reykjavik is where most people start — and with good reason. You can treat it as a city break in its own right, barely leaving your neighbourhood, or you can hire a car and use it as a jumping-off point for the Golden Circle, the Blue Lagoon, and beyond. The capital gives you flexibility. If food matters to you, it’s worth checking out the best restaurants in Reykjavik before you go — the dining scene is better than most visitors expect.
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🏘️ The best areas to stay in Reykjavik
Who makes the cut? While we can’t personally review every hotel mentioned, our selections are crafted from a wealth of expert knowledge, editorial insights, user experiences, and meticulous research to guide you toward the best accommodations. This article features affiliate links, which do not affect our editorial integrity. For further details, please see our affiliate guidelines.
