Iceland Accommodation: Where to stay in Reykjavik and throughout Ring Road

Where to stay in Iceland

Iceland is a wonderland – the active volcanoes, fiery hot springs, martian landscapes, stunning waterfalls, amazing scenes along the ring road, lonely roadways, friendly horses and curious sheeps, ever changing weather – everything about Iceland is surreal. As I have been telling in all my articles, Iceland is a MUST VISIT in one’s lifetime. With so many places to see in Iceland, it’s bound to be confused on where all to go in the limited number of days we have in hand. So, I have curated a detailed list of 75+ places you can add in your Icelandic itinerary. Read that article here. Many people who read that article wrote back to me asking where we stayed in Iceland and in which towns/cities we halted for the day. Hence I’m penning this post to help you decide your Iceland accommodation while in Reykjavik and also while touring the Ring road.

Iceland 10 day itinerary


Where to stay in Iceland

Just a fair bit of warning – Iceland is EXPENSIVE! And so is the accommodation there. The population of entire Iceland is just 0.3 million people whereas the number of tourists who visit Iceland adds up to more than 2 million people a year! So, there is a clear imbalance in demand and supply statistics. This in a way, has pushed up accommodation prices in Iceland and it’s extremely risky to book your lodging at the last moment. Not that there won’t be any place to stay, it’s just that it’ll be too expensive. I had been researching about Iceland and making up my itinerary way before I booked my flights so I was aware of how expensive the stay can get. Hence, I started making my bookings as soon as I crafted my itinerary and booked my flights.

Which website to book hotels in Iceland

My favourite site to look for best places to stay in Europe is I have booked most of my accommodation on both my Europe trips through this site. Check prices in Iceland by typing in your intended stay of location in the search box below.

In this article, I shall mention the places where we stayed and will also give you other options to stay, just in case the one we stayed is already booked. Also note that places where we decided to stay was highly dependent on our itinerary and we booked homes that were en route to our next destination. So you can use this article as a reference and then go ahead to book the one that suits your plan the best. I shall also share the criteria based on which I chose to book the place.

Just in case you are not booking your accommodation now, you may want to bookmark this page or pin it for later use.

Where to stay in Iceland



How to choose the best places to stay in Iceland

While locking in a decision to book a place to stay for the day, there are many things to look out for. First let’s look at the different factors which we considered while finalizing a place. I’ve used this method in my previous holidays and never once had a stay booked which was bad or had a sour experience. You too could take these things into consideration while looking out for a place to halt for the day.

  • Ratings and pictures

User ratings and pictures uploaded by people who have stayed in place is a good measure to decide if the place really provides services what the owner claims.

  • User feedback

Sometimes, people would have uploaded images from their stay – these pictures help in decision making. User comments or the feedback hold a good weight age too. I usually sort the comments by date and read up the recent comments. If there is something that is bothersome then I’d move on to other properties. So reading comments gives a clear image and sets the expectations right!

Iceland 10 day itinerary

  • Number of people traveling

This is a very important criteria if you travelling as a big family or with a group of friends. When we travelled to Europe for the first time, we road tripped Italy and Croatia and we travelled as a family of 12 with the eldest being 75 and youngest being my sweet lil rowdy who was 3.

We rented 3 cars for the road trip and stayed in 6 rooms/apartments. Hence while booking the stay for the day, I used to filter out the results by number of people or if we liked a place, we would check if there are other apartments/hotel rooms available in the same property for that date. This is a very important thing to consider because while travelling together –  its not practical for each group to stay in different places, right?

Iceland 10 day itinerary

  • Proximity

Another important factor that makes or breaks a good holiday is how far is the place of stay either from our last destination/sightseeing place of the day or first destination the next day.

We would always arrange our itinerary in such a way that we either stay a little far away from the city, if our city sight seeing has finished and we have to get going on the road the next day. Or, sometimes, if it’s a long driving day and if doesn’t seem like we will reach the intended city by the night fall then, we plan to stop by any small town en route. This will easily save us a few bucks, as the cost of staying in a small town is considerably lesser than staying in the city.

Say for example, while road tripping Italy, a part of our itinerary had Sorrento, Amalfi Coast drive, Alberobello and Bari on the list. So we listed out sightseeing places in Sorrento and optimized time for each place of interest, time to get from one attraction to the other etc and came to a conclusion that we would be done for the day in Sorrento by 4-5 PM. Next in the itinerary was driving through Amalfi coast and reach Alberobello. And the Amalfi Coast drive is a slow drive and takes up 2 hours and the driving time between Sorrento and Alberobello through Amalfi is 5.30 hours.

So, we decided to leave Sorrento max by 5 pm and drive by the Amalfi coast while there is still ample sunlight to enjoy the stunning views. And instead of driving all the way to Alberobello, we decided to stay in Eboli, a small town just after we cross Amalfi coast. Thus cutting down the driving time to just 3 hours the next morning – also ensuring that we had a beautiful sunset drive in Amalfi.

Our tryst with Italian pizza in Eboli:

In another instance, when we didn’t yet have our rental car in Milan, we decided to do Milan city sightseeing for a whole day and decided to embark upon a new journey in our rental car the next day. So, what factors went into deciding the place we stayed were:

  • How near or far was the place from our rental car pickup office
  • Is there metro station nearby to get to other places of interest
  • Are 6 rooms/apartments available in the same property?

P.S: If you were wondering the website we generally use to book our rental car, then its this. The website compares different car suppliers and gives us a detailed list from which we can choose the best one for us.

If that was the case in Italy, Iceland was a different ball game altogether. For one, there are limited accommodation options and 75% of them are sold out, so the choices are very less. We booked 6 months prior and still found that majority of the good places are already booked. Such is the magnitude of demand for accommodation in Iceland.

Iceland 10 day itinerary

There are lots of options in Reykjavik and South Iceland in general, but as we move up north and farther, options thin down and we’ll have to compromise between price and distance. Unlike other countries, there isn’t a lot of buzz around major sightseeing places. In fact, there aren’t much hotels/resorts to cater to entire tourist crowd. But what gives us some respite from the high costs and a total scarcity of lodging is the fact that many locals have opened up their houses to guests or have built little, cute outhouses to earn some extra income.

Iceland 10 day itinerary

But again, I’d like to reiterate that the options are less. Say for instance, when we decided that we didn’t want to stay in Vik town and wanted to stay closer to Fjaðrárgljúfur, which was our next destination in our itinerary, we didn’t find any place close by. We decided against putting up in Vik as we had only few places available for our dates – and pricing started from 300 Euro per night for one room. But, during the entire trip, we tried our best to keep the per night stay cost around 100 – 150 USD. With no other option, we had to book a backup stay near Skaftafell but we were lucky when we found one near Fjaðrárgljúfur when we were just 2 weeks away from travel date. But according to our itinerary, we would cross Fjaðrárgljúfur when the night dawns, so we had to drive 20 mins past it, to halt for the day. And the next morning, we planned to drive back 20 mins to see Fjaðrárgljúfur and so we did!

Iceland 10 day itinerary


Huh! That was one real long explanation isn’t it? Let’s move on to the next factor.

  • Other requirements

Like extra room for children, extra bathroom, kitchen, washing machine, parking space and any extra parking fee etc. When we travel, we prefer to cook at least one Indian meal per day as we travel with the child and also for the elders in family whose comfort food is Indian. So I always tick the kitchen option while filtering out the results.

As for clothes, if we are travelling for more than 10 days, then, instead of packing one pair for each day, we prefer to carry light luggage (think flight baggage restrictions and snuggling your heavy luggage back and forth everyday!). We then laundry our essentials at some point in the middle of the trip.

Also read: How we pack for road trip with kids

So, during the planning phase, after certain days into the trip, we strategically try to book accommodations which have a washing machine. For instance, on our vacation to Iceland, we covered Sweden and Iceland over the span of 24 days. So, we arrived to Iceland after 12 days in Sweden, and had booked a place in Reykjavik which had a washing machine + dryer. Hence refreshing the basic essentials anew and back to a clean and supple wardrobe again!

  • Shared Bathroom?

While we didn’t come across this option much in other countries we booked, but found the concept of shared bathroom really common in Iceland. Maybe in case of an hostel, shared bathrooms are common but we are private people and prefer to stay in hotels or apartments. And in Iceland, many apartments too have shared bathroom where we share bathroom with other members in the property. As our itinerary was time bound, we tried to avoid shared bathrooms and preferred privacy over cost (as those are a little cheap).

Iceland 10 day itinerary

This time, my sister and brother-in-law accompanied us on our Icelandic holiday. So I used the filter as 4 adults, 2 rooms, 2 bathrooms, kitchen and parking space. Only at certain times when there were no/less options available, we went for a house with 2 rooms and one bathroom. Sometimes, we stayed in separate cabins with individual kitchens and bathrooms and sometimes in a single house with 2 rooms, one kitchen and one/multiple bathrooms.

  • Cost

Obviously, there are NO  cheap hotels in Iceland and all we have to do is find one that works out the best for us. The cost of lodging in Iceland varies depending on which part of Iceland you are looking to book in. Say, for example, South and East Iceland is expensive compared to the North Iceland and Westfjords.

For the sake of this post, I went back to my Iceland accommodation excel sheet and averaged out our cost of stay in Iceland over 11 days and it came up to 120 Euros per day per room(for a couple) on an average. This made me curious to check how much it costed for a couple in our Italy-Croatia trip the previous year. Astonishingly, the cost was 950 Euros for 15 days which makes it approx. 63 euros per day per room(for each couple). Also keep in mind that we had to let go of some cheaper and good accommodation options on our Italy trip as we were searching for 6 rooms at one property. If we didn’t have this condition, the average cost of 63 Euros would have come down considerably and would have costed us way lesser. So, now you can compare by yourselves how the costs doubled – 120 Euro per day in Iceland trip and 63 Euro per day in Italy & Croatia trip.

Driving in Iceland

On a side note, I’d like to stress upon the fact that Iceland is not exactly a backpacker’s destination and there aren’t hostels all over Iceland except a few major cities. We did see hitchhikers at a few places, but they weren’t a dominant number. You can even hang around in campsites in your campervan or choose to sleep in your car. Camping in random places and in private properties is banned in Iceland. Also note that all campsites aren’t equal – while some have facilities to shower and cook, some don’t. Campsites also have a per night fee to pay, which differs from one site to another. At one point we did think of a campervan, but we decided against it, as the cost of car + apartment came up to the same amount of hiring a campervan + per night fee.

Now let’s get to the point and know of places where we stayed and where you could!

Where to stay in Reykjavik

Reykjavik is the largest city and most densely populated city in Iceland. There are lots of accommodation options here. You can choose to stay near the airport if you are arriving late or departing early or stay somewhere in the city centre if you wish to explore Reykjavik city. When we landed in Iceland, we decided to stay near Keflavik airport, away from the city centre as we had planned to explore Reykjavik city at the end of our trip.

Going forward, I shall be splitting the accommodation day wise, so you can match our itinerary with our stay. Let’s get going!

Day 1: Casablanca Apartments, Keflavik

Worked well for us because:

  • Near to airport – to reach the place and to get away from the city easily the next day
  • 2 bedrooms with 2 bathrooms – which was what we were looking for.
  • Most important thing to choose this over the others was – Washing Machine 🙂  As I mentioned, we were arriving to Iceland after holidaying in Sweden. So, we chose a place where we could laundry our stuff.
  • A well equipped kitchen to cook our food.

The owners were really friendly, and we had a good chat for some time. Click here to check if Casablanca Apartments is available for your dates.

If this place isn’t available for your dates, then check these great options in Reykjavik too.

P.S: Just a reminder that you will frequently be seeing ‘2 rooms’ as our criteria. This is because, as I mentioned before, my sister and brother-in-law accompanied us in our Icelandic journey.

Hostels in Reykjavik Iceland

Hotels in Reykjavik Iceland

Apartments/Guesthouses/B & B in Reykjavik Iceland

P.S: If you are not looking to stay in the city and want recommendations to stay near the airport then scroll down to the end of this article by clicking here.

Day 2: Hotel Ranga, Hella

Worked well for us because:

  • It was on the ring road and very close to Seljalandsfoss waterfall which was our last destination of the day.
  • One of the best places to see Northern lights in Iceland – they have a call alert service when the Auroras occur, otherwise we would have missed our only chance to watch the Auroras dance during our Icelandic holiday.

Check our review of Hotel Ranga here. Click here to view the availability.

Where to stay in Iceland

Hotel Ranga

Check these other good places to stay near Hella:

Day 3: Hörgsland Cottages, Kirkjubæjarklaustur

Where to stay in Iceland

Hörgsland Cottages

Worked well for us because:

  • On the ring road, was costing us 1/3rd of what it costed if we stayed in Vik
  • 2 bedrooms – which was what we were looking for.
  • A well equipped kitchen to cook our food.

Beautiful locale, by the mountains. Check out our video below about our experience renting with Lagoon Car rentals and somewhere in the middle of the video, you will see our car outside Hörgsland Cottages from 0:25 to 0:48 seconds. Book your stay here.


Vik, Iceland accommodation options:

Day 4: Starmýri 2a, Djúpivogur

Starmýri 2a

Worked well for us because:

  • On the Ring Road
  • Our plan was to explore small towns in East fjords and then proceed to stay near Dettifoss which was our last destination for the day. So, staying near Jokulsarlon meant rushing this day – thus we chose to drive further and stay here so we can have a relaxed drive next day.
  • 2 bedrooms – which was what we were looking for.
  • A well-equipped kitchen to fill our rumbling stomachs.

Check pictures of Starmýri 2a here.

Other recommended places:

Iceland 10 day itinerary

Framtid Hostel in Djúpivogur

Day 5: Grímstunga Guesthouse, Grímsstaðir

Worked well for us because:

  • Was near Dettifoss, so we could reach the place easily after spending ample time in Dettifoss and Selfoss
  • We found 2 rooms available in the same property. Each couple stayed in 2 separate cabins.
  • Cabins didn’t have kitchen but we could use a shared kitchen at the breakfast room.

See if Grímstunga Guesthouse is available here.

Check other options near Dettifoss:

You may also choose to stay somewhere near Myvatn area. Here are some recommendations:

Day 6: Guesthouse Brunahlid, Aðaldalur

Worked well for us because:

  • Was near Husavik, so we could reach it easily after the Whale Watching tour.
  • We found 2 rooms available in the same property. Each couple stayed in 2 separate cabins.
  • Each room is equipped with kitchen. Owners left us some home made jam and chocolates. Very clean rooms set in middle of a farm.

See pictures of Guesthouse Brunahlid here.

Check other options near Husavik:

If you choose to drive back to Ring Road, you can stay closer to Akureyri, which is the second largest city in Iceland. Here are some of my recommendations for Akureyri:


Day 7: Siglo Hotel, Siglufjörður

Siglo Hotel

Worked well for us because:

  • Was a perfect stop for our long North Iceland driving itinerary.
  • We found 2 rooms available in the same property. Each couple stayed in 2 separate rooms.
  • Amazing views surrounding the hotel and a really beautiful town.

Read review of Siglo Hotel here. Check if rooms are available for your dates here.

Check other options in North Iceland:

Also Read: Whale watching in Husavik

Day 8: Apartments by the Fjord, Pingeyri

Worked well for us because:

  • Was a good place to halt to set on a easy hour ride to Dynjandi waterfalls the next day.
  • 2 bedrooms with 2 bathrooms – which was what we were looking for.
  • Apartment is equipped with kitchen.
Driving in Iceland


Unfortunately, Apartments by the Fjord is not on now. You can check other nearby properties below.

Check other options in West fjords:

Day 9 and 10: G4 Apartment, Grundarfjordur

Worked well for us because:

  • Was a good place to halt for a couple of days as we made this base to explore Snæfellsnes Peninsula.
  • Single apartment with 2 bedrooms with 2 bathrooms – which was what we were looking for.
  • Apartment is well equipped with kitchen and dishwasher.
  • Owner was friendly and we chatted with her for hours!
Where to stay in Iceland

View from our kitchen window in G4 Apartment

See more pictures of  G4 Apartment here.

Check other options in Snæfellsnes Peninsula :

Day 11: Guesthouse Gardur Apartments, Keflavik

Worked well for us because:

  • We chose to explore Reykjavik on this day and decided to drive down Keflavik area in the evening so we are closer to airport, which makes it easier to drop off our rental car the next morning and catch the flight back home on time.
  • Apartment is well equipped with kitchen and micro oven.

See if Guesthouse Gardur Apartments is available for your dates here.

Check other options in Keflavik:

Go back to Day 1…

Iceland 10 day itinerary

So, this was our scheduled stay while we were on our Iceland trip. With the recommendations given, you now have many places to choose from! If you’d like to add or ask anything, then feel free to share with us in the comments section below.

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