a waterfall in the middle of a river

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If you want to know the best areas to lodge in Iceland to experience its Northern Lights, its striking waterfalls, and some of its glaciers, in this article you will find the keys to staying in some of the top hotels in Iceland.

We are fond of the landscapes within this country. That is why, annually, we conduct photographic excursions in Iceland, where we assist other photographers to explore this incredible island that appears straight from a fairy tale.

This has enabled us to drive around the whole Ring Road around Iceland multiple times and visit the Highlands, Iceland`s different peninsulas and fjords, its cities and towns, and so on. Therefore, I am confident I can assist you in finding the lodging in Iceland that best fits your travel aims.

a river filled with lots of water surrounded by mountains

My initial recommendation is to not spend more than one night, possibly two at most, in the same hotel. Though you can take tours from Reykjavik,the capital of Iceland, to nearly anywhere on the island, it’s best to self-drive in Iceland to explore the island independently. That way, you can observe all its wonders at your own rhythm on the Ring Road, the 800-mile road that circles the island. This is the best approach to experience most of the activities to engage in in Iceland.

To aid you in reserving the best accommodations in Iceland for your needs, in our guide on lodging in Iceland, you can find:

Best areas to stay in Iceland

In the next section, I will provide you with information on some of the optimal towns and cities in Iceland for lodging. In addition, I will briefly characterize each area, note points of interest present, and discuss lodging options available.

For our photo tours, we usually reserve hotels in Iceland 6 months ahead because if we don’t, it’s virtually impossible to find well-situated hotels at an affordable cost. However, we reserve for 8-12 people. In your situation, if you are between 2 and 4 travelers, you will have no issue finding well-located, low-cost lodging in Iceland if you book 2 months in advance. In cities, you can always find an accessible room. But keep in mind that, in other areas for example Southern Iceland, hotels are very sparse and pricey, so I recommend not booking at the last minute.

Reykjavík, the best place to stay in Iceland

Clarke Quay also serves as an access point for cruises and river taxis. For anyone seeking Singapore sightseeing excursions, I recommend this boat tour, taking travelers along the river to see the city skyline and some nearby iconic sites, like the Merlion.

If you choose to stay in this city, I recommend exploring the Hallgrímskirkja Church, the Sun Voyager sculpture, and the Perlan revolving glass restaurant, which are some of the top-rated tourist attractions in Reykjavik.

Many explorers opt to locate their lodging in Iceland here and tour the remainder of the country through excursions and day trips from Reykjavik. If self-driving is not preferred, it’s the best choice (review our recommended tours to view the Northern Lights from Reykjavik).

But, even if you plan to lease a vehicle in Iceland,I recommend spending 1 or 2 days in Reykjavik, since it’s one of the best locations tostay in Iceland if you want to experience Icelandic cuisine and soak up the culture in intriguing museums.

a man standing next to a statue of a man on a bicycle

These are the lodging options in Iceland`s capital that I propose examining:

Golden Circle, accommodation in the most popular area in Iceland

The famous route known as the Golden Circle is one of Iceland`s most visited areas. However, it represents more than just a location; it encompasses a scenic 200 mile route beginning and ending in Reykjavik.

This route passes through several of the most significant tourist destinations in the country, which makes the Golden Circle one of the optimal places to remain in Iceland.

While I advise exploring at your own pace and visiting any places that capture your interest, some spots you cannot miss are Thingvellir, Gullfoss, and the Haukadalur Valley, which hosts Iceland’s famed geysers. I also recommend stopping at the Kerid volcanic crater, the greenhouse village of Hveragerdi, Skálholt church, and the geothermal power station at Nesjavellir. You can check here for the best stops along Iceland’s Golden Circle route.

a black and white photo of a sunset on a beach

These are the hotels in the Golden Circle that I would advise considering if you’re looking for the perfect accommodation in Iceland:

Selfoss, the best place to find cheap accommodation in Iceland

Selfossis also a good place to search for accommodations in Iceland, as it lies on the Ring Road, the route encircling the island, and equidistant among Reykjavik, the primary attractions of the Golden Circle, and the initial few waterfalls in southern Iceland.

In addition to all this, in Selfoss, there exists a wide assortment of lodging. If you have left your hotel reservation until the final moments, you’ll still be able to locate one here. This is, without question, one of the finest locations you can opt to stay in Iceland.

If you decide to stay here, you will be very near to the Kerid crater and the Reykjadalur thermal river. Also, it is one of the best places to find inexpensive accommodations in Iceland.

a view from the top of a hill of a lake

Below are some Iceland hotels I recommend in and around Selfoss:

Hella, a village where you can find the best hotels in Iceland

Hellais the final town you will pass through before reaching the southern region of Iceland, where it`s more difficult to find large towns and, accordingly, fewer affordable hotel options in Iceland.

This town is situated on the banks of the Ytri-Rangá River, in very close proximity to the primary two waterfalls in southern Iceland, Seljalandsfoss and Skógafoss. If during your search for accommodation in Iceland you choose this location, you will also be near to the most visited and popular area of the Highlands, Landmannalaugar, and can hike a portion of the trail running from Skógar to Thórmsmörk known as Fimmvörðuháls. Completing the initial section is definitely worthwhile, although hiking the full trail would require around couple of days.

a scenic view of a scenic view of a river

Here are our preferred hotels in Hella:

Vík í Mýrdal, the best place to stay in Iceland South coast

The small town of Vík í Mýrdal is situated at the southernmost region of Iceland, in an exceptionally scenic landscape where visitors can observe, during the summer season, one of the primary puffin colonies in the nation.

If you opt to stay one night in Vík í Mýrdal when searching for lodgings in Iceland, you will be quite near to the black sand beach, Reynisfjara. I also advise you visit its church, which is easily recognizable for its red roof; you’ll also get magnificent views from there. Vik is undoubtedly an essential stop on the Ring Road, rendering it one of the most well-known towns to remain in Iceland.

a sunset over a beach with a lighthouse

Here are the hotels in Vík í Mýrdal that I recommend:

  • Premium alternative: Kría Hotel (we stayed here with the group and the breakfast is excellent)
  • Standard choice: Carina Guesthouse
  • Inexpensive option: Puffin Hotel Vík

Höfn, a beautiful and quiet place to sleep in Iceland

Höfn is found in southern Iceland near Stokksnes beach, known for its black sand dunes and Vestrahorn Mountain providing an impressive backdrop. This idyllic area is very popular for sleeping in Iceland, so advance booking of lodging is recommended.

If passing through Hofn, I suggest you stop at my favored eatery, Hafnarbuðin, to sample their lobster baguette. Without fail, each time we visit Iceland, we dine there.

Though it`s not that nearby, Höfn is the largest town near such amazing places as the Jökulsárlón glacial lake or the Svartifoss waterfall, in Skaftafell, within the Vatnajökull National Park. So if you opt to search for hotels in Iceland in the Höfn area, you can tour these incredible places.

a mountain range with mountains in the distance

These are the best accommodations in Iceland that I recommend exploring in this area:

Snæfellsnes, one of the most beautiful places to stay in Iceland

Snæfellsnes is a peninsula that is a couple of hours from Reykjavik, and I consider it one of the most scenic regions in the country. Also, it’s one of the best spots to view the northern lights in Iceland.

On this peninsula, impressive natural landmarks like the hat-shaped Kirkjufell mountain, lava fields containing caves, black sand beaches inhabited by seals, glaciers, and cliffs can be seen.

It certainly holds the entire essence of Iceland within a small peninsula. That is why I view it as one of the most spectacular locations to stay in Iceland for a couple days. Often, numerous travelers who opt for the southern region or the Ring Road overlook this part of the island. However, I suggest taking a few days to make a small detour. It is well worth it.

a grassy field with a mountain range

Below are the hotels that I suggest in Snæfellsnes:

Akureyri, best hotels in north Iceland

Akureyri is deemed the most significant city in northern Iceland, which explains why it’s frequently termed “the northern capital.” Additionally, this is where the primary fishing port is situated, so in this town, you can find a wide assortment of accommodation in Iceland, along with restaurants, leisure activities, and tours.

Within this region, you are advised to take in the sights of Goðafoss waterfall and Aldeyjarfoss waterfall (considered one of the finest waterfalls in Iceland).

a body of water with a waterfall behind it

If you are searching for a good place to lodge in Iceland in the northern region, I propose the following accommodations in Akureyri:

Mývatn, staying near this volcanic lake in Iceland

Very close to Akureyri is the volcanic Mývatn Lake, surrounded by some amazing hiking trails and landscapes.

Mývatn offers a good place to lodge in Iceland, as there are some fascinating thermal springs there whose waters contain many minerals and are said to have beneficial health qualities. After lengthy days of hiking and sightseeing, relaxing in these baths can be a excellent idea.

From this geographic area, in addition to enjoying the thermal baths, I recommend exploring Dimmuborgir, some amazing lava fields that are truly remarkable; and Hverir, a solfatara with boiling mud pits and fumaroles located next to the Námafjall mountain.

a large body of water on a cloudy day

Depending on your Iceland travel plans, Mývatn is a good location in Iceland to visit other places like Dettifoss and Selfoss. These are the prime hotels in Iceland situated in this region:

Húsavik, the best place to stay in Iceland for a whale watching tour

Húsavikis a lovely town due to its picturesque appearance and remote setting, in northern Iceland. If I suggest staying here, it is because it’s the place to join the best whale watching excursions in Iceland. Furthermore, it’s a stunning and charming village.

With a small amount of fortune, you may see humpback whales that visit the bay to feed in the summer and even puffins that form sizable clusters on one of the islands in the bay. The excursions begin very early, so if you want to book one, I suggest spending the night there, as we did the year we observed whales in Iceland.

a large body of water with a mountain range

The hotels in Iceland that I recommend in this area are:

Egilsstaðir, where to stay in the east of Iceland

Egilsstaðir is the largest eastern Icelandic city along the Lagarfljót river. It presents a great option for a hostel in Iceland near wonderful sites like Hengifoss waterfall, one of my favorites, as well as Stuðlagil canyon and the Gufufoss and Klifbrekkufoss waterfalls.

Egilsstaðir is considered the access point for exploring the fjords located on Iceland`s east coast, as three significant fjords – Vopnafjörður, Reyðarfjörður, and Seyðisfjörður – can all be seen from this area. Due to its location amid wild natural landscapes, the region also serves as an excellent starting point for hiking trails and trekking routes.

These are the best places to reside in Iceland in Egilsstaðir:

Keflavík, hotels near the Blue Lagoon and the airport in Iceland

Keflavík is situated on the Reykjanes peninsula, just 25 miles from Reykjavik. This area is perfect if you are seeking lodging in Iceland near the airport, either because you must catch a plane very early or you land very late.

I also suggest spending time in the Reykjanes peninsula during your stay here to experience some remarkable natural scenery like the geothermal area of Krisuvik/Seltún and the Valahnúkamöl cliffs. In addition, you will be close to the famous Blue Lagoon, a must-visit destination in Iceland, which later I will specify an Iceland hotel near.

a man and a woman laying in the water

Here are the best hotels you can discover in Keflavík:

Westfjords, the quietest place to stay in west Iceland

Westfjords is a tranquil area to lodge in Iceland, and it’s also the most untamed and sparsely populated region in the country. If you decide to tour this part of Iceland, I advise you to visit some of its most popular places, such as the Dynjandi waterfall, the Latrabjard cliffs, and the Hornstrandir nature reserve.

a waterfall in the middle of a mountain range

The best towns to inhabit in this region of Iceland are Ísafjörður, Holmavik, and Patreksfjörður. Here are my preferred hotels in the area:

Best hotels along the Ring Road by location

Most attractions in Iceland are surrounded by nature far from populated regions. Therefore, if you want to stay at the best places, below are select hotels near can`t-miss spots.

a waterfall that is in the middle of some rocks

These are the best located hotels in Iceland: best-located Iceland hotels

  • The Retreat near the iconic Blue Lagoon, the top-rated lodging in Iceland near the Blue Lagoon
  • Héradsskólinn Historic Guesthouse, an ideal place to lodge near Thingvellir
  • Premium choice: Fairfield Inn & Suites by Marriott Washington Downtown
  • The Gullfoss Hotel, a suitable lodging in Iceland near the magnificent Gullfoss waterfall
  • Brú Guesthouse, convenient lodging near the Seljalandsfoss waterfall
  • Skogar Hotel, the hotel situated nearest to Skogafoss waterfall in Iceland which is regarded as the best option.
  • Black Beach Suites, good lodging on Reynisfjara beach, Iceland
  • Skaftafell Hotel, a location to stay in Iceland near Skaftafell (Svartifoss waterfall)
  • Fosshotel Glacier Lagoon, staying near Jokulsarlon and Diamond Beach, Iceland
  • Vikingcafe, a hotel in Iceland near the town of Stokksnes
  • Fosshótel Mývatn, the best hotel near Lake Myvatn, Iceland

It is needless to say that these lodging options book up rapidly, so if you want to reside in any of them, you must plan quite a few months in advance. It’s unquestionably worthwhile to reside in one of the top hotels in Iceland and witness some of the marvels of this country practically from the window of your room .

Best luxury hotels in Iceland

If you’re indifferent about where to stay in Iceland but want to ensure you stay in one of its finest hotels, here is a selection of the country`s best luxury accommodations.

These are some of the top-rated hotels in Iceland:

  • The Retreat at Blue Lagoon Iceland, a luxury hotel in Iceland near the Blue Lagoon
  • Grimsborgir – Your Golden Circle Retreat Hotel, accommodation in Iceland’s Golden Circle
  • Tower Suites Reykjavík, a hotel with the best panoramic views of Iceland
  • Rangá Hotel, a luxury hotel in Iceland where you can view the Northern Lights
  • 360 Hotel & Thermal Baths, a luxurious place to stay in Iceland

Where to stay in Iceland to see northern lights

Iceland is one of the top selections as a locale for observing northern lights due to its latitude of around 65 degrees, making the chances of seeing them quite high if travel occurs at an advantageous time. If your journey to the island stems from a desire to witness the Northern Lights, I recommend exploring one of the premier lodging options for observing northern lights in Iceland.

a blurry picture of a body of water

Here are some highly recommended hotels in Iceland for viewing the Northern Lights:

  • Grimsborgir – Your Golden Circle Retreat Hotel, hotel in Iceland’s Golden Circle
  • Husafell Hotel: Hotel away from light pollution that is perfect for viewing the Northern Lights
  • Reykjavik Domes: Unique igloo style accommodation located in Iceland that allows guests to view the Northern Lights.
  • Grand Hotel Reykjavik: The finest choice if you want to watch the Aurora Borealis in Reykjavik
  • Aurora Cabins: Premier Lodge to see the Aurora Borealis in east Iceland
  • Kjarnalundur Hotel: Enjoy the Northern Lights from a Jacuzzi
  • Villa Lola: The best hotel to see Northern Lights in northern Iceland

Cheap hotels in Iceland

If affordability is important for your trip to Iceland, don’t worry. It’s possible to find inexpensive lodging in Iceland. I have gathered the best low-cost accommodation options in Iceland. Of course, keep in mind that they fill up quickly, so advance booking is recommended.

These are the most affordable hotels in Iceland:

  • The Barn, inexpensive lodging in Iceland near Vík í Mýrdal
  • Standard option: Midgardur by Center Hotels
  • Vibrant Iceland Hostel, inexpensive lodging near Reykjavik, Iceland

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  • , a suitable location to remain in Iceland for an affordable price

Campsites in Iceland, the best places to camp in Iceland

Reykjavik represents a good location to rest in Iceland, as it’s the capital city. Unlike other European capitals, Reykjavik has small, brightly colored houses. It’s a very lively and welcoming city.

Until the year 2015, unauthorized outdoor living was permitted in Iceland without limitations, but presently it is not lawful, particularly in inhabited or protected zones. This does not signify that you can no longer pursue tenting in Iceland. It denotes that your shelter must be distant from public roads, that you are only able to camp in a place where people do not permanently reside, that you cannot camp if there is some type of construction in the location, and that you cannot camp in national parks. I recommend you examine our guide on tenting in Iceland to identify the places where unpermitted outdoor living is acceptable in Iceland, so you can save yourself some trouble.

a waterfall that is in the middle of a mountain

The Inn at Death Valley has an ambience of luxury and comfort, making it the best hotel option in Death Valley. The rooms offer various amenities, such as complimentary Wi-Fi, air conditioning, and room service available at all hours.

If you travel during summer, from May 15 to September 15, it may be worth purchasing the CampingCard, which is a pass permitting camping free of charge for 28 nights (non-consecutive) in 40 of the associated campsites for € 150 per tent or RV.

These are the top campsites in Iceland where we have camped:

  • Hellissandur Camping: on the Snaefellsnes Peninsula
  • Camping Geysir: in the Golden Circle
  • Brennisteinsalda Camping: in Landmannalaugar
  • Skógar Campsite: located near the Skógafoss waterfall
  • Skaftafell Camping: within Skaftafell National Park
  • Camping Höfn: in Höfn, near Stokksnes

Map of the best places to stay in Iceland

Now that you are aware of the prime regions and lodgings to remain in Iceland, you can check the map of Icelandbelow to locate all these accommodations. I hope it assists you in locating the hotel in Iceland that most suits your needs.

And if you still have no decision on where to reside in Iceland, feel free to leave a comment and I will be pleased to offer assistance. Now, enjoy this beautiful country!