Where to Stay in Iceland: Hotels Around the Ring Road
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As with any destination, there is always a plethora of accommodation options. That’s always one of my biggest decisions when I’m planning a trip. I have certain required amenities and, like everyone, I want the most for my money. It’s a balancing act. When I went to Iceland, our hotels were pre-chosen for us by our tour company, but I really enjoyed them. Every accommodation has its pros and cons but I feel, in these cases, the pros outweighed any cons. To help with your planning, I compiled my list of where to stay in Iceland that features accommodations all around the famous Ring Road!Where to Stay in Iceland
I am organizing these hotels by general geographic location (counter-clockwise from Reykjavík) to make it somewhat easier to plan. In addition, I have included a map at the end of this post for easy reference including photos.
Also, I considered labeling each hotel with a budget indicator but decided against it in this case because Iceland is more expensive than most destinations. For this reason, I believe the indicator might be skewed. Everyone has their own thoughts about what’s most important to them when it comes to accommodations and how much they are willing to spend. Having said that, I would definitely categorize most of these as mid-range options to give you a ballpark idea.
Each property included wifi, breakfast, heat, assortments of toiletries, and safes. Unless there is an extra point to be made for these, I will skip mentioning them at each one.
Okay, on to the important stuff!
Reykjavík
CenterHotel Arnarhvoll
Most international flights from the United States land early morning in Iceland. Ours was supposed to be no exception. However, sometimes there is interference and to make a long story short, we got in after midnight, a delay of 18 hours. Our first night (ahem, few hours) was spent at the CenterHotel Arnarhvoll.
I liked the friendly staff, room decor, spacious bathroom, and buffet breakfast. The hotel has a decent location near the water and across the street from the Harpa Concert Hall. While this isn’t right in the heart of the city, Reykjavík isn’t large and you can still walk to most places from here. We didn’t get to test this out immediately (as we checked out early the next morning to start our tour) but upon our return to Reykjavík the following week, I did walk easily from Harpa all the way to the other side of the city center.
CenterHotel Arnarhvoll Closeup
Nearby: Harpa, Sun Voyager, Reykjavík City Center
Amenity Highlight: Outlets at the bedside
CenterHotel Midgardur
We stayed at CenterHotel Midgardur when we returned to Reykjavík after our tour ended. I chose to stay here because it has a fabulous location in the city center as well as a fantastic restaurant (featured in this post for its dinner) and buffet breakfast.
Other pros are that Bus Stop 10 was maybe a two-minute walk away and Bus Stop 13 is right at the hotel. I also liked that the vanity and sink were located outside the bathroom which made it easy for two girls getting ready.
CenterHotel Midgardur Closeup
Nearby: Reykjavík City Center, main shopping street
Amenity Highlight: Close to everything
South Iceland
Hótel Dyrhólaey
Hótel Dyrhólaey is a no-frills property and probably on the lower end of what most people think of as mid-range. However, once you leave Reykjavík, there aren’t many properties with frills. They have private rooms with ensuite bathrooms, comfortable beds, and a gigantic restaurant great for dinner and a buffet breakfast.
Hótel Dyrhólaey Closeup
Nearby: Reynisfjara, Seljalandsfoss, Jökulsárlón
871 Vík, Iceland
Amenity Highlight: Great food
You might also like: ICELAND RESTAURANTS: WHERE TO FIND THE BEST EATS & TREATS
East Iceland
Höfn Inn Guesthouse
Höfn Inn Guesthouse is the only guesthouse on this list. We arrived later at night and the lighting wasn’t the best so I was unable to get decent photos of it. A true guesthouse, it isn’t staffed 24/7. The rooms have tiled floors and therefore are a bit cold. However, I was impressed with how large the room and bathroom both were. Breakfast was across the street in a separate building and was a cozy experience almost like staying with a local.
One thing that will always stick out in my mind, though, was the unique decor. Each room (that I saw) had two chairs shaped like open hands. So where you would sit would be the palm of the hand and the fingers would be the chair back. The thumb was sort of like an armrest although really a bit too low for that. It brought new meaning to “on my hands” or “in his/her hands”.
Höfn Inn Guesthouse Closeup
Nearby: Vatnajökull Glacier, Lónsöræfi, Jökulsárlón
780 Höfn í Hornafirði, Iceland
Amenity Highlight: Spacious
Hótel Valaskjálf Egilsstaðir
I absolutely loved the lobby of Hótel Valaskjálf, isn’t it cute? Okay, really I loved my entire stay here. There are several things I loved about this hotel and it seems to be a fairly popular place to stay.


The room was spacious for Iceland (and Europe in general), there were outlets, light switches, and little shelves located conveniently at the bedside, the water pressure was great and they had some of the best food I had in all of Iceland!
Hótel Valaskjálf Closeup
Nearby: Myvatn Nature Baths, Dettifoss (both are relatively close)
700 Egilsstöðum, Iceland
Amenity Highlight: Everything!
North Iceland
Hótel Dalvík
Hótel Dalvík has many things going for it including its location in the cozy little fishing town of Dalvík in Northern Iceland. A 3-minute walk to the seaside of Eyjafjörður Fjord, the property features views of the mountains and the village.
As with most hotels and guesthouses around Iceland, Hótel Dalvík offers an array of room types with basic, modest furnishings. The rooms were neither large nor small, just an average Iceland size.
However, the bathroom had a large shelf storage area which is perfect when sharing a room. It’s great if you have your own room too. I thoroughly enjoyed having room for all of my toiletries and pajamas and being able to leave them in there (it’s the little things, right?). The water pressure in the shower was also pretty strong.
Speaking of landscapes, this is also a great place to watch the Northern Lights in the wintertime from the comfort of the property’s hot tub!
Humpback Whale in Iceland
The next morning, breakfast was served in a large, open room with huge windows perfect for gazing at the landscapes. And, remember that 3-minute walk to the water? The hotel is the perfect location for the most amazing whale watching trips!
Hótel Dalvík Closeup
Nearby: Akureyri, whale watching
Amenity Highlight: Close to the water
Hótel Laugarbakki
All things considered, Hótel Laugarbakki was probably my favorite hotel on the tour. The combination of an upscale dinner, large rooms and my first spotting of the Northern Lights probably had a bit to do with it, wouldn’t you say?
A new hotel, the rooms were very modern and mine was quite large by most standards and not just European ones. It had a large sitting area complete with a separate table/chairs. The hardwood floors, robes, and kettles were also nice touches.
The shower had a cavelike feel with charcoal gray features and a rainfall shower with a floor that sloped ever-so-slightly towards the drain. This made it sort of like a zero-entry (or walk-in) shower. No need for a door but don’t worry, there was a curtain!
Watching the Aurora Borealis outside of Hótel Laugarbakki
Located in Laugarbakki Village, the hotel is located near a large field that ends with a salmon river, Miðfjarðará, just on the other side. It is a fabulous place to set up chairs from the deck for a front-row seat to a Northern Lights show. This was my first of two Northern Lights sightings in Iceland!
If you are looking for an organized adventure out of Reykjavik, this Northern Lights tour is similar to the one I took on my second sighting.
Hótel Laugarbakki Closeup
Nearby: Midway between Akureyri and Reykjavík
Amenity Highlight: Spacious, upscale rooms and Northern Lights viewing area
West Iceland
Hótel Borgarnes


Left: Clear horizon | Right: Hello, mountains!
Hótel Borgarnes was the last hotel we stayed in on the tour. Located in the town of Borgarnes, it has comfortable rooms and I was impressed with the size of the bathroom. I enjoyed the rooftop deck we could walk out onto for gorgeous mountain and waters.
The rooms were average size and the bed was comfortable. I was most impressed with the size of the bathroom as mine was on the larger side. Not sure if they were all like that, but I’ll take it!
This was another hotel with fabulous, traditional Icelandic food. We had dinner at Perspectives Restaurant in addition to the buffet breakfast the next morning. After breakfast and checkout, it was on to explore the Snæfellsnes Peninsula!
If you aren’t renting a car or your multi-day tour doesn’t have this option, check out this Snæfellsnes Peninsula day trip from Reykjavík.
Hótel Borgarnes Closeup
Nearby: Hafnarfjall Mountain, Snæfellsnes Peninsula
Amenity Highlight: Great food, spacious bathroom
More Options
If you aren’t a hotel person, then you might want to look into an Airbnb. Get $40 off your first booking here.
If you are a hotel person but the ones above are booked for the dates of your stay, explore these options:
A campervan is also a popular choice in Iceland and might be a good choice for those who are into camping and backpacking.
Tours
Our “tour” I refer to in this post is the 7 Days Around Iceland Adventure with Extreme Iceland. I highly recommend them! With pick-up and drop-off in Reykjavík, you will see everything around the famous Ring Road. Add a few days in Reykjavík onto the front or back end and you have the perfect Iceland vacation!
In addition to the Northern Lights, I also Snorkeled Silfra, rode Icelandic horses, and visited the Blue Lagoon all as day trips from my add-on time in Reykjavík.
Luggage
Looking for a new carry-on or do you like to pack carry-on only? Be sure to check out why I like the Chester Minima and use code TRIMM10 for a discount on your purchase!
Packing
Look for a packing guide for Iceland coming soon. The main things I’m so glad I had were these hiking boots, these pants and this raincoat.
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As you can tell, none of these are five-star hotels but they are all nice, affordable and perfect for sharing or solo travel. Choosing where to stay in Iceland doesn’t have to be stressful or difficult. But definitely book in advance especially in the summer months of the peak season!
Have you been to Iceland? Where did you stay? Is there an accommodation I should know about? Tell me below including what aspect of your stay you enjoyed most!
‘Til next time…
Trimm Travels,
What a great list of hotels to stay in while visiting Iceland. When I went to Iceland I stayed in an apartment – sort of like an Airbnb but not branded 🙂 Its great to see these other options as well!
Hi Sam-I totally agree! Iceland is awesome isn’t it? Thanks for reading! 🙂
Thank you for the great hotel options. I think my favorites would be based on the views. Hótel Dalvík looks like it had great views but it seems maybe you had to share the bathroom. That is not my favorite situation but I have done it before. I love Hótel Laugarbakki no wonder it is your favorite. I even like the dark cave like bathroom. Seeing the Northern Lights here is a huge advantage.
Hi Wendy-Oh no, all were private bathrooms and my room was private except for the days in Reykjavík. There I shared the room (and therefore bathroom) with my friend! Seeing the Northern Lights is a huge advantage! Thanks for reading! 🙂
I went to Iceland many years ago and mainly stayed in hostels but now that I am a wee bit older and travelling with Darcee I think we may upgrade a bit to some of these awesome finds you list in where to stay in Iceland. So Jealous that you caught the Northern Lights when you stayed at Hótel Laugarbakki . That place looked great too. I chased the Aurora several times and never caught it, so when I return and we stay at Hótel Laugarbakki hopefully we will have better luck in that field near the hotel.
Hi Eric-Yes, Hótel Laugarbakki was amazing for so many reasons, but the Northern Lights was the highlight for sure! I hope you get to go back soon to stay there and get to see the Aurora! They are awesome and I’ve been lucky to see them a total of 3 times (twice in Iceland, once in Alaska). Thanks for reading! 🙂
This is perfect for planning a trip around Iceland, we have always wanted to go but never really known where we would stay to plan and trip around the island. This will be so helpful when we come to planning out the trip in a couple of years!
Hi Nicola-Glad you found it helpful and I hope you get to go soon. Thanks for reading! 🙂
Until your article, I hadn’t heard that the cost of accommodations was high, I had heard food costs were. That is good to know for when planning and budgeting a trip there. It looks like there are affordable options.
Hi Renee-There are, but yes most everything is expensive in Iceland. Accommodations, food, clothing, you name it. All worth it though. Thanks for reading! 🙂
We followed a very similar itinerary during our trip to Iceland. While we normally don’t have any trouble finding accommodations, it was really a challenge in Iceland – even 4-5 months in advance. We stayed in apartments, Airbnbs and even two guesthouses in South Iceland because that was all that was available. Looks like you scored big time with great pre-chosen hotels. Now, I want to go back….
Hi Catherine-Yes the key to Iceland is booking early because the hotels go quickly. Thanks for reading! 🙂
Compared to other hotels seen on your blog it makes me think that accommodation in Iceland is more simple, with less useless decorations. It’s not a bad thing, especially if you’re on a road trip, spending one night here and one night there. Personally, I liked the Hótel Laugarbakki best from your description.
Hi Mirela-You’d be correct. Iceland is much more simple compared to most other destinations and to my normal luxury accommodations. But I agree that isn’t a bad thing for a road trip in a beautiful nature-focused country! Thanks for reading! 🙂
This is a great comprehensive list of accommodation to help plan a trip to Iceland. I liked how you you found these places based on their locations to make your trip run smoothly.
Hi Laura-They were actually pre-chosen for us by our tour company, I just organized them by location. Thanks for reading! 🙂
Great list of hotels for anyone driving the ring road around Iceland Heather. Love the way you organize and presented the material … easy to read and understand. And you are correct, Iceland is DAMN expensive. $5 Cokes come to mind that I had to have at a gas station years ago on a looooong bike ride simply because we ran out of water and I was knackered. 😉
Hi Michael-Yep! There is no getting around that fact that Iceland is expensive no matter what how you spin it-food, accommodation, etc. I saw a few $5 diet cokes myself! I’m glad you liked the organization and thanks for reading! 🙂
I have always wanted to do a guided tour but have wondered what accomodations would be like on tours( I’m pretty picky). It sounds like all of them on this tour were pretty good. The Hotel Dalvik sounds perfect to me. What could be better than sitting in a hot tub watching the northern lights. Being close to whalè watching is an added bonus! Are guided tours worth the money?
Hi Kelly-I understand as I have that apprehension sometimes too. I like the control of knowing where I’m staying. We knew the hotel names ahead of time and that the accommodations were going to be fairly nice so that helps. Guided tours are worth the money sometimes. You have to weigh out the pros and cons. We didn’t want to rent a car and worry about driving, finding everything and being our own tour guide. This tour was well-priced and included so much. We had a lot of time for photography which was important to me so this was one was totally worth it! Thanks for reading! 🙂
The Hotels enlisted are amazing and looks very cool. These seem to be some of the best hotels to stay in Iceland. I have never been to Iceland, it’s my dream destination. I have just seen them in pictures and on the internet. I really wish that someday in the future I will visit Iceland. Thank you for this blog and keep sharing.
Hi Vijay-Iceland is amazing. I hope you get to visit soon and thanks for reading! 🙂