Where to Stay in Iceland: Best Areas and Tips for Every Traveler
- Aliki
- Jul 21
- 4 min read
Updated: Oct 10
Iceland is a land of breathtaking contrasts: glaciers and volcanoes, black sand beaches and emerald valleys, bustling cities and untouched wilderness. Choosing where to stay in Iceland depends largely on how you plan to explore the country, and whether or not you’ll rent a car (you should!). This guide will help you figure out the best areas to stay based on region and travel style.
Should You Stay in One Place or Move Around?
If you’re flying into Reykjavik and don’t plan to leave the city, staying in one spot makes sense. But here’s the thing, most of Iceland’s magic lives outside the capital: waterfalls tucked behind mossy cliffs, geothermal pools with zero crowds, beaches with blue icebergs. These aren’t on the city tour.
That’s why many travelers choose to do a road trip, moving between accommodations along the way. This gives you the freedom to chase good weather, detour to hidden gems, and truly experience Iceland beyond the Golden Circle.
Best Places to Stay in Iceland by Region
Best for: First-timers, nightlife, museums, restaurants.
Why stay here: It’s the capital, has the most hotels and tours, and is the hub for public transport.
Good to know: Easy day trips to Blue Lagoon and Golden Circle.
Best for: Nature lovers, families, short stays.
Top spots: Thingvellir, Gullfoss, Geysir.
Why stay here: It’s where you’ll find geysers erupting beside quiet meadows and waterfalls only minutes from cozy cabins—wild, yet reachable.
Good to know: Great base for seeing top sights in 1–2 days.
Best for: Landscapes, photographers, road trippers.
Top spots: Vik, Skógafoss, Jökulsárlón Glacier Lagoon.
Why stay here: Waterfalls, beaches, and glaciers.
Good to know: Book early, accommodation fills up fast in summer.
Best for: Fewer tourists, wildlife, geothermal areas.
Top spots: Akureyri, Mývatn, Húsavík (whale watching).
Why stay here: In Akureyri, locals take coffee breaks at geothermal pools and whale sightings are just a short drive away. This northern gem offers serenity without skipping the essentials.
Good to know: Great in summer; roads less accessible in winter.
Best for: Peace, hiking, coastal towns.
Top spots: Seyðisfjörður, Borgarfjörður Eystri.
Why stay here: Beautiful, quiet, artsy.
Good to know: Less visited, perfect for slow travel.
Best for: Adventure seekers, solitude.
Top spots: Ísafjörður, Dynjandi waterfall, Látrabjarg cliffs.
Why stay here: If you’re craving total silence, dramatic fjords, and off-the-grid adventure, this is your wildest Icelandic dream come true.
Good to know: Only accessible in summer months.
Best for: "Mini Iceland" experience.
Top spots: Arnarstapi, Búðir, Kirkjufell.
Why stay here: Glaciers, cliffs, beaches, volcanoes,all in one area.
Good to know: Great alternative if you don’t want to do a full Ring Road.
Where to Stay Based on Type of Traveler
Budget Travelers
Hostels in Reykjavik or along the Ring Road.
Affordable campgrounds are plentiful in summer, especially near natural sights.
Guesthouses and farm stays are affordable.
Couples
Romantic stays in Snæfellsnes or near Vik.
Boutique hotels with hot tubs.
Families
Cabins in the Golden Circle.
Farm stays in the East or South.
Reykjavik for easy logistics.
Adventurers
Base yourself near hiking trails: Landmannalaugar, Westfjords, or North.
4x4 access opens up wild terrain.
Photographers
Vik (beaches, ice caves), Mývatn (northern lights), Snæfellsnes (diverse landscapes).
Aim for at least 1–2 nights in each key region.
For your peace of mind, consider getting travel insurance!
How to Get Around Iceland (options)
Tours: Good for short stays.
Bus: Limited routes, not ideal for rural stops.
Car rental: By far the best way to explore.
You’ll see more, spend less time waiting, and discover hidden spots when driving yourself.
If you’re planning on renting a car in Iceland, check out Cars Iceland for affordable, reliable options to explore the country at your own pace.
Best Region to Stay in Iceland: At-a-Glance Guide
Region | Best For | Highlights | Season |
Reykjavik | Urban comforts | Culture, dining | All year |
Golden Circle | Families, quick trip | Waterfalls, geysers | All year |
South Coast | Landscapes | Vik, glaciers, waterfalls | Spring–Fall |
North Iceland | Wildlife, quiet | Akureyri, Mývatn | Summer |
East Fjords | Peaceful escapes | Fjords, small towns | Summer |
Westfjords | Wild adventures | Cliffs, hikes, waterfalls | Late summer |
Snæfellsnes | First-time explorers | Diverse scenery | All year |
Where is the best place to stay in Iceland for first-time visitors?
It depends on what you want! Reykjavik is great for culture, Vik for scenery, Akureyri for fewer crowds.
Where to stay in Iceland in July or August?
These are peak months, book early! South Coast, North, and Westfjords are great in summer.
Where to stay in Iceland for a week?
Split your time: 2 nights in Reykjavik, 2–3 nights along the South Coast, and 1–2 nights in Snæfellsnes or Golden Circle.
No matter where you choose to sleep, Iceland will surprise you, perhaps with a rainbow over Skógafoss or the sudden stillness of a fjord village at midnight. Bring a sense of wonder, a map, and a reliable car, and let the road tell the rest of the story.
